City Hears Plan for $46 Million in Federal Funds

At the City of Tallahassee budget workshop, elected officials discussed a distribution plan for federal monies allocated through the American Rescue Plan (ARP) Act. The $1.9 trillion package, which was signed into law on March 11, 2021, directs aid to individuals and state, local and tribal governments to speed up the United States’ recovery from the economic and public health impacts of the COVID-19 pandemic.

Florida will receive approximately $17.6 billion from the recovery plan in total. As an eligible municipality, the City of Tallahassee is projected to receive $46.2 million from ARP.  The U.S. Department of the Treasury recently provided detailed guidance on the implementation and rules for ARP distribution.

The City’s proposed plan addresses costs associated with the public health response to COVID, replacement of lost public sector revenue, and the negative economic impact caused by the pandemic.

Listed below are the details for each category.

Support of Public Health Response – COVID-19 Costs – $1.6 million

In the course of responding to the pandemic, the City incurred direct costs for providing a variety of COVID-19 specific services related to testing, vaccination, and community outreach, as well as enhanced services, including to make changes to City facilities and spaces to continue to provide our core services to the public safely. While some of these costs have been reimbursed through Leon CARES and FEMA, the City currently has unreimbursed eligible costs of $583,629.

The City also made temporary changes to public facilities to ensure the safety of employees and the public, with plexiglass barriers, spacing changes and other measures for safety. It is recommended that $1 million in facilities improvements for this purpose be included in the City’s plan for ARP, for a total recommendation for ARP funding to support the public heath response of $1.6 million.

Replacement of Lost Public Sector Revenue – $28.2 million

One of the goals of the ARP is to address the pandemic impact on state and local governments. Based on revenue loss estimation methodology provided in the ARP guidance, the City’s losses in general revenues (excluding utilities) totals $28.2 million. This includes lost revenues in the General Fund, capital funding from state and gas taxes and other service charges and fees that declined during the pandemic. 

As allowed under ARP, it also includes projected future losses over FY21-FY23 as recovering revenues will remain below what would have been collected if the pandemic had not happened. The loss of these resources, if not recovered, would make a significant negative impact on the City’s ability to fund operating and capital needs over time.

Address Negative Economic Impacts – $16.4 million

Over the next several years, ARP provides the opportunity for the City to address negative economic impacts from the pandemic on the homeless, those who need affordable housing, our human services organizations, and other housing and human services needs that multiplied as the economic impacts of the pandemic touched every part of the community.

ARP Next Steps

The City must apply to the U.S. Treasury to receive the allocated funding. Once certified, the funds allocated to the City will be disbursed in two equal tranches, roughly 12 months apart. The first 50% of funds will follow the final enactment by Congress and the President, and certification by the U.S. Treasury, approximately 60 to 90 days from March 11, 2021. The remaining 50% will be remitted no sooner than one year after the first allocation, which could occur around May or June of 2022.

Once the City’s application for ARP funds is certified, the U.S. Treasury will have up to 60 days to provide payment. The legislation gives local governments until December 31, 2024 to use all the funds received.