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BUDGET MESSAGE SECTION 2 <br /> <br />AMERICAN RESCUE PLAN ACT <br /> <br />On March 11, 2021, the American Rescue Plan Act was signed into law. The Rescue <br />Plan expands existing COVID-19 relief programs and provides additional funding to states <br />and local governments that had not been included in prior relief packages. <br /> <br />Counties and cities with population over 50,000 will receive funding directly from the <br />Federal government. A total of $350 billion has been directly allocated to states, counties, <br />tribes, and territories, with a broad definition of allowable uses, and added purposes like <br />recoupment of lost revenue and investments in water, sewer, and broadband <br />infrastructure. While governments have flexibility in using these funds, they cannot use <br />them to pay for pension costs or replenish reserves. <br /> <br />The City is expected to receive $18,600,000 with the first funding allocation in 2020-21. <br />The U.S. Treasury released interim guidelines on the use of funds in May 2021. Staff has <br />reviewed the guidelines and will continue to monitor updates to ensure successful <br />implementation of city programs. Staff is in the process of developing an expenditure <br />plan for City Council consideration. As discussed above, the budget proposes to use <br />$6,735,000 from recovered revenues to support services and programs. This strategy <br />will ensure restricted resources are used first and General Fund resources are saved for <br />priorities not eligible for other federal and state assistance programs. <br /> ECONOMIC DEVELOPMENT EFFORTS <br /> <br />Economic development is a key element of a sustainable fiscal structure for the <br />community. Continuing to support businesses and developing relationships will grow our <br />local economy and increase the City’s fiscal health. It is also what helps create a vibrant <br />business community. Between 2018 and 2020, the city experienced activity resulting in <br />annual construction permit valuations of over $130 million. Growth is expected to <br />continue, although at a lower rate. <br /> <br />Several significant projects are planned in the next year. Bayfair TOD Plan has prepared <br />Zoning Code amendments for review by the City Council and the 687-unit downtown <br />housing project has submitted a building application that is currently being reviewed. <br /> <br />As with all cities in the region, we see individuals, families, and small businesses in <br />need—services that were initiated in recent years will continue. As a City, there is a <br />commitment to include the entirety of the community in our successes and remaining <br />mindful of our obligation to support those in need. <br /> CONCLUSION <br /> <br />This budget represents a step toward achieving long-term fiscal sustainability, while <br />addressing service enhancements reflecting City Council goals. Nevertheless, our <br />forecasts indicate that we will face budget challenges in future years. The City has begun <br />planning now so that the City Council may make informed choices as we strive toward a <br />sustainable City budget. <br /> <br />18 <br />51