Title
American Rescue Plan Act November 2023 Reallocation
Description
This report provides an update on American Rescue Plan Act (ARPA) spending to date and the reallocation of current unspent ARPA funds. The City is on track to meet all ARPA spending deadlines.
Report
Summary
The federal government allocated $396 million to the City of Phoenix as part of the American Rescue Plan Act (ARPA). On June 8, 2021, and June 7, 2022, City Council approved the ARPA Strategic Plan and at several subsequent Council meetings, approved additional programs which included new programs in affordable housing and homelessness funded through the first large reallocation in December 2022.
There are currently 69 programs across 19 City departments and as of Sept. 30, 2023, nearly $215 million has been spent. As stated in the previous report in June, 12 programs are at or near total expenditures spent. These programs include the Arts Career Advancement Grants, Better Health and Community Outcomes, Bus Card Subsidy Program, Family Assistance Resource Program, Food Banks and Pantries Support, Meals That Work, Micro and Small Business Assistance Programs, Nonprofit Arts and Culture Stabilization Grants, Premium Pay, Summer Heat Respite, After-School Grant for Phoenix Schools, and Transit Heat Relief Program. Twenty-five percent of programs have more than 75 percent or more expended to date, and about 65 percent of programs are more than 25 percent expended to date. There are less than a dozen programs currently with zero expenditures, and staff anticipates spending in these programs to begin this fiscal year. Staff will continue to monitor these programs over the next several months and anticipates completing a third reallocation exercise to begin in December 2023.
Staff completed the July 2023 Recovery Plan Performance Report, which was due to the United States Treasury by July 31. The final report can be found on the City’s ARPA website, located at www.phoenixopendata.com.
Reallocation of Unused, Underspent, or Reprioritized ARPA Funds
During the June 7, 2022, City Council Formal meeting, staff indicated reallocation exercises would be performed throughout the remaining duration of the grant to analyze all programs with unused, underspent, or reprioritized funding that may be used for other ARPA eligible uses. The intent of the reallocation exercises is to ensure full utilization of all awarded ARPA funds. The ARPA covered period will end Dec. 31, 2024, and after this date, staff will be unable to reallocate funding to other programs and any unspent funds must be returned to the United States Treasury. To avoid this, staff plans to complete additional reallocation exercises before June 2024 to ensure all funds are obligated and will be spent by the expenditure deadline of Dec. 31, 2026.
The first reallocation exercise resulted in the approval of $21.2 million, for three affordable housing and homelessness projects. For this second reallocation exercise, approximately $19.6 million has been identified for possible reallocation. The potential range of funding has been identified due to savings in contracts and program spending and include the following programs: Digital Divide, Home Weatherization Assistance, Better Health Outcomes, HACSED contract, Summer Heat Respite, Justa Center contract, Bus Stop Shelters, and savings from several administrative areas.
Reallocation Programs
As the City continues to work towards providing solutions for homelessness and increasing the supply of affordable housing units, staff, with the assistance of City Council and community feedback, has identified 11 programs for feedback which target these high-need areas.
Safe Outdoor Space - $3,000,000
This is an existing program under Homelessness Projects and the current allocation is funding the operations of the Safe Outdoor Space in partnership with Community Bridges, Inc., and the Human Services Campus. The reallocated funding will continue the contracts for two years.
Temporary Lodging - $3,000,000
This project will increase the current Community Bridges, Inc. contract under the Homelessness Projects Program to provide temporary lodging to individuals experiencing homelessness. Funds will cover hotel stays as individuals are receiving housing services. Total program funding need is $5,000,000 and an additional $2,000,000 in funding will be prioritized in future reallocations.
Heat Response/Temporary Shelter - Washington St. Shelter SVdP Contract - $2,500,000
This is an existing program and provides temporary shelter and wraparound services for people experiencing homelessness. Funding will continue shelter operations in partnership with St. Vincent de Paul for an additional year. Total program funding need is $4,000,000 and an additional $1,500,000 in funding will be prioritized in future reallocations.
Homelessness Hotel Acquisition and Renovation Project - Super 8 - $2,500,000
This is an existing project and includes converting a Super 8 hotel into affordable rental housing units with on-site supportive services. Additional funding will support ongoing rehabilitation at this site.
Landlord Incentive Program - $2,300,000
This is an existing program and provides housing incentives to landlords to accept Section 8 Vouchers from residents and aims to increase housing stability by providing affordable units to residents. The additional funding will continue the program until Dec. 31, 2024.
Overnight Summer Heat Respite - $1,800,000
This is a new program and will provide additional summer heat resources in 2024 to include overnight heat respite services.
Homelessness Support Services - $1,100,000
This is a new program and will fund six temporary positions in the Office of Homeless Solutions to assist with homelessness services until June 2026. Total program funding need is approximately $2,000,000 and an additional $900,0000 in funding will be prioritized in future reallocations.
Community Legal Services - $1,000,000
This is a new program. The City’s current contract with Community Legal Services ends June 30, 2024 and provides housing services to individuals experiencing unfair practices by landlords and evictions. The additional funding will be used to fund services until the end of 2024.
Parsons Center for Health and Wellness - $1,000,000
This is a new program. Funding will provide operational and facility support to the center, located at 1101 N. Central Ave., Phoenix, Ariz., 85004. Operational services include primary care and mental health services.
Utility & Rental Assistance Program - $1,000,000
This is an existing program and provides households between 80 percent to 120 percent of the Area Median Income with emergency utility and rental assistance. The additional funding will increase the number of households served in this program.
CASS Haven Project - $400,000
This is a new program. Funding will provide temporary housing to individuals experiencing homelessness as construction continues at the new Haven site, operated by Central Arizona Shelter Services (CASS). Total program funding need is $740,000 and an additional $340,000 in funding will be added in future reallocations.
Attachment A summarizes each proposed program and funding amounts.
Recommendation
Staff requests approval to reallocate $19.6 million for the programs listed on Attachment A to support the City’s efforts to assist residents experiencing homelessness and provide solutions to current affordable housing challenges. Approval will also provide departments adequate time to complete procurement processes and contract authorizations.
Department
Responsible Department
This item is submitted by City Manager Jeffrey Barton and the City Manager's Office.