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Citrus Heights Messenger

Police Department and Small Businesses Eligible for Relief Funding

Jun 17, 2021 12:00AM ● By Story by Shaunna Boyd

CITRUS HEIGHTS, CA (MPG) - At the June 10 Citrus Heights City Council meeting, Interim Administrative Services Director Bill Zenoni provided an update about eligible spending of federal relief funding from the American Rescue Plan Act (ARPA), which was signed into law in March 2021 to aid in the nation’s recovery from the COVID-19 pandemic.

In April, when the City adopted the two-year budget for fiscal years 2021/22 and 2022/23, much was still unknown about the funding—including the exact amount the City would receive, the timing of when the funds would be dispersed, and guidelines for how the money could be spent.  

On May 10, the U.S. Treasury opened the ARPA application process, and the City’s request was submitted that same afternoon. “Because of that, we were one of the first agencies to receive funds,” said Zenoni. Citrus Heights will receive a total of $15.6 million. The first payment of $7.8 million was received on May 19, and the remainder will be received in May 2022. All the funds must be obligated by December 31, 2024, and expended by December 31, 2026. Any funds not assigned or spent in that timeframe must be returned to the federal government.

May 10 was also the date when the Treasury released the 151-page First Interim Final Rule, the document that outlines the expenditure guidelines. There are four categories for eligible expenditures, but Zenoni said the first two categories— premium pay for essential workers and investment in water, sewer, or broadband infrastructure—are the least applicable for Citrus Heights and are not recommended for further consideration.

Category 3 allows for expending funds in response to the COVID-19 public health emergency or its negative economic impacts. Zenoni explained that the negative economic impact costs would be the most applicable to Citrus Heights. This category allows funding to be spent on assisting small business and nonprofits affected by the pandemic. The assistance could take the form of loans or grants to help with reopening or recovering from financial loss. Under this category, the City could also invest funding into addressing socioeconomic disparities, such as services for homeless persons as well as low-income housing and neighborhood services.

Another eligible expense in this category is rebuilding public sector capacity to pre-pandemic level, which would allow the City to restore police department staffing to pre-pandemic (January 2020) levels. Zenoni said this expenditure has been identified as a priority by Interim City Manager Chris Boyd as well as the Council’s Finance Committee (Mayor Steve Miller and Councilmember Jeannie Bruins). Over the course of the current two-year budget cycle, it would cost an estimated $5.3 million to fill 22 vacant police department positions—out of a total of 28 vacant positions that have remained unfilled due to lack of funding.

The City can also expend funds under Category 4, which Zenoni said is the most flexible but also the most difficult to calculate. This category allows for funding government services, capital projects, cyber security, and public safety—but only to the extent of the City’s reduction in revenue due to COVID-19. Calculations will be done each year through 2023 to determine both expected revenue and actual revenue, which will in turn determine the amount that can be spent in this category.

In addition to categories of eligible expenditures, the guidelines also specified ineligible costs, including depositing the money into pension funds, using the money to rebuild depleted reserve funds, or paying down outstanding debts.

Staff recommended two phases of expenditures. Phase 1 would be implemented immediately, with Council considering an amended budget proposal for the June 24 meeting. The amended budget would restore public safety staffing by approving funds for police department positions.

Phase 2 would be ongoing. “It’s important that we move forward in a very deliberate manner, making sure we follow all of the expenditure guidelines,” said Zenoni, because any funds spent outside of approved guidelines would have to be repaid to the federal government.

Councilmember Tim Schaefer and Mayor Miller both spoke optimistically about using the funding to assist local business recovery. Councilmember Bret Daniels agreed: “Hopefully we see our dollars go directly toward Citrus Heights businesses and then funneled into the Citrus Heights community and economy.”

Vice Mayor Porsche Middleton commended staff for their quick work in determining eligible uses, and Councilmember Bruins thanked Zenoni for his efforts. “We were one of the first cities in the nation to be funded because of your diligence,” said Bruins.

The Treasury is expected to release refined guidelines later this summer and public input will reveal key community priorities for how the money should be spent. Mayor Miller said, “Everything’s on the table. Let’s hear from our residents.”