Title
Adoption of Resolution Amending the Capital Budget by Increasing Appropriations in the 2021 American Rescue Plan Project (C99300) by $1,911,000 for Replacement of Three Portables and Decking at the Midway Shelter, Food Bank Facility Repairs, and Purchase of Wireless Hotspots for Lending. (City Manager 10021030/Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
EXECUTIVE SUMMARY
The City of Alameda (City) will receive a total of approximately $28.68 million in American Rescue Plan Act of 2021 (ARPA) funding. On June 17, 2021 the City received the first $14.34 million tranche of funding. The second tranche of $14.34 million is expected in 2022.
This report presents the recommended spending plan for the City’s first ARPA funding allocation, based on the direction provided by the City Council at the May 20, 2021, July 20, 2021, and September 7, 2021 City Council meetings.
The ARPA spending plan is now focused primarily on housing with some support for technology services and for local businesses to assist with the City’s COVID-19 recovery efforts. These priorities are consistent with the spending principles discussed at the prior City Council meetings, including an emphasis on support for those in our community who were (and continue to be) disproportionately impacted by the pandemic.
BACKGROUND
According to the allocations published by United States Department of the Treasury (Treasury) in May 2021, the City is eligible to receive $28,679,908 in ARPA funding over two years. The City received the first tranche of $14.34 million on June 17, 2021, and the second tranche is expected in 2022. Eligible costs must be incurred or obligated to infrastructure projects by December 31, 2024, and the period of performance for obligated funds will run until December 31, 2026. A summary of the Treasury guidance on eligible uses of ARPA funding is provided in Exhibit 1.
Staff initially sought direction from City Council on May 20, 2021 (File 2021-0824) on a framework for considering the allocation of the funding. The proposed guiding principles included:
1. Prioritize “one-time” expenditures over ongoing activities
2. Invest in critical infrastructure
3. Seek and explore state and regional partnerships
4. Focus on City Council Priority Areas
5. Apply an equity lens
6. Identify projects that support/unburden the General Fund
7. Take the necessary time to invest strategically
8. Carefully track and report regularly to the City Council and Community
Using these principles, staff recommended the following categories for focusing the ARPA spending plan.
1. Supplementing revenue loss
2. Addressing housing, homelessness, and behavioral/mental health
3. Investing and building broadband infrastructure
4. Providing household and local small business assistance
At the City Council meeting on July 20, 2021, the City Council made a motion directing staff to return to City Council with a revised spending plan that has a housing focus, with flexibility to use the ARPA revenue loss funding for housing purposes, and includes funding for the Wi-Fi hotspots.
On September 7, 2021, the City Council reiterated support for the housing options, particularly a buildout of the Bottle Parcel.
DISCUSSION
Staff recommends appropriating $1,911,000 from the first tranche of ARPA funds for the following projects (see Exhibit 2).
1. Midway Shelter
Community Development
Proposed one-time expenditure of $1,800,000 in 2022
The Midway Shelter of Alameda (Midway Shelter) is a shelter for women and children suffering from homelessness and domestic violence. The shelter is operated by Building Futures for Women and Children, a non-profit organization. Staff recommends allocating $1,800,000 of the City’s ARPA allocation for replacement of the deck and three portables that house the kitchen/community room, staff/children’s room, and a 25-bed dormitory at the Midway Shelter. The deck and the three portables are beyond their useful life. The dormitory and staff/children’s room was installed in 1993, and the kitchen was installed in 2000.
2. Alameda Food Bank
Community Development
Proposed one-time expenditure of $42,000 in 2022
The Alameda Food Bank has requested repairs to their food disbursement facility located at 650 W. Ranger at Alameda Point. These repairs are requested to keep volunteers dry, warm and out of the elements. The repairs are to the parking lot to relieve severe drainage issues that leave large pools of water around the building and into the street. The cost to repair the high foot traffic, main distribution area is $37,000. Additionally, upgrades have been requested to the shed adjacent to the facility used for staging and ancillary functions. The Food Bank has requested that this shed be made more air tight by installing plexiglass and plywood over current openings. The shed is constructed of a roof and perimeter of chainlink fence. Previously used by the Navy for open air secure storage, the Alameda Point Collaborative in the past installed plywood to cover the majority of the chainlink area. The plexiglass and additional plywood installation requested at this time would be used to close up the remaining holes in the exterior cover. The cost of these installations would be $5,000.
3 & 4. Wireless Hotspot Lending Program
Library
Proposed one-time expenditure of $50,000 and a total of $19,000 for service charges between 2022 to 2026
To help bridge the digital divide for families, the Library proposes purchasing approximately 30 wireless hotspots for lending at no cost to borrowers. The hotspot provides internet access to families and library patrons who do not have a connection at home. The lending program will allow students, parents, teachers and families working and studying remotely to access a free and reliable internet connection. The portable hotspots connect Wi-Fi enabled devices such as laptops, tablets or smartphones to the internet. The hotspots can connect up to 10 devices at one time and work almost anywhere in the continental U.S.
Patrons must have a library card in good standing to check out a hotspot. The lending period is 21 days, and are available for renewal if there is no waitlist. The hotspot kits would come with a case, instructions and charging cord. This funding request would launch this project and fund it for about three years, during which a permanent funding source will be sought.
Previously Approved Projects
5. Transitional Housing - Ground-Up Build on Bottle Parcel
Community Development
Local match of $4,640,000 for annual operating costs ranging from $741,000 to $1,556,000 from 2022 to 2026
At the November 16, 2021 City Council meeting, City Council approved (File 2021-1466; Resolution No. 15835) submission to the State of a Homekey grant fund application in connection with a ground-up build of a 46 unit modular housing project at the Bottle Parcel on 5th Street, including additional community spaces. The application was submitted and if the grant is awarded, the City is required to contribute a local match ranging from $741,000 to $1,556,000 annually through 2027. ARPA funds for this purpose totaling $4,640,000 were previously appropriated by City Council.
6. Emergency Housing at Alameda Point
Community Development
Proposed expenditure of $2,837,000 from 2021 to 2023
At the November 16, 2021 City Council meeting, City Council appropriated $2,837,000 in ARPA funds (File 2021-1450; Resolution No. 15838) for (i) contractual services from Bay Area Community Services to operate an emergency housing program in three vacant homes at Alameda Point for approximately 30 unsheltered Alameda residents; and (ii) paying for remodeling and repairs, fixtures, furniture, equipment, and startup supplies need for the emergency homeless housing program. This program will provide emergency housing for up to approximately six months with wrap-around services to assist each person with individual challenges, with an emphasis on locating permanent housing.
7. Feed Alameda
Community Development
Proposed one-time expenditure of $26,250 in 2021
The Feed Alameda program provided funding to local restaurants, who in turn provided hot meals to unhoused individuals and others who are food insecure. On September 7, 2021, City Council appropriated $26,250 in ARPA funds for this program (File 2021-1234; Resolution No. 15805).
8. Commercial Streets
Planning, Building & Transportation
Proposed one-time expenditure of $630,350 in 2022
In May 2020, in response to the COVID-19 pandemic and the recommendations of the West Alameda Business Association (WABA) and the Downtown Alameda Business Association (DABA), the City Council authorized staff to proceed with a full slate of efforts, called the Commercial Streets program, to support the survival of Alameda’s businesses through the pandemic and to minimize the health risks to public safety and the safety of the business employees, owners and customers. The Commercial Streets capital improvement program involves improvements to the Park Street and Webster Street striping plans, improvements to the on-street parklet program, maintaining the Alameda Avenue street closure, and implementing parking improvements on the commercial streets. On November 2, 2021, City Council appropriated $630,000 in ARPA funds for the Commercial Streets program (File 2021-1354; Resolution No. 15833).
Subject to Future Appropriations
9. Revenue Loss
Non-Departmental
Proposed to offset revenue loss for $8,478,916
According to the revenue loss formula provided by U.S. Treasury, the City is eligible for $8,478,916 in funding for revenue loss due to the economic impacts of the COVID-19 pandemic. Entities are granted flexibility in their use of revenue loss funding. Therefore, this funding could be used for City Council priorities that are not otherwise eligible for ARPA funding, such as infrastructure improvements at Alameda Point. In addition, the revenue loss can be also used to support businesses if needs occur in our business districts or the Chamber if we see a need.
Additional Projects for Future Consideration
Staff are evaluating the following projects for consideration in the second tranche of ARPA funds in 2022. Note that these projects combined with the recommended projects above exceed the City’s full allocation of $28.68 million. Staff intends to return to City Council in mid-2022 for further direction on the use of the second tranche of ARPA funding.
a & b. Hotel Acquisition and Operation
Community Development
Proposed one-time expenditure of $4,000,000 and $1,500,000 annually from 2023 to 2026
The City’s possible contribution towards acquisition and renovation of a hotel for permanent supportive housing is currently a very rough estimate, since a property has not been identified, an appraisal has not been done and a price has not been negotiated. It is also not yet known if other funds would be available for any part of the acquisition, rehabilitation, and operations. Significant additional funding would be needed for this project, and staff would apply to Homekey 3 for supplemental funding for capital and operations if City Council directs staff to proceed with this project.
c. Smart Cities Broadband
Information Technology
Proposed one-time expenditure of up to $6,000,000 from 2022 to 2023
The Smart Cities project would build out an administrative fiber network and offer public Wi-Fi to business districts and vulnerable neighborhoods. Initial fiber runs in core areas of the city would include Webster Street to City Hall West, Santa Clara Avenue, Park Street, and Broadway to the Golf Course (with a potential link to San Leandro’s fiber network for a smart traffic corridor).
d. Alameda Point Water, Wastewater, and Stormwater Infrastructure
Public Works/Community Development
Proposed one-time expenditure of $8,000,000
Staff are evaluating the benefit of using ARPA funds to pay for construction of a portion of the water and sewer infrastructure at Alameda Point. Use of funds in this way would allow the City to advance projects that are experiencing delays and challenges. This money could be used to fund water and sewer infrastructure in the adaptive reuse portion of Alameda Point to allow that work to proceed more expeditiously.
ALTERNATIVES
• Appropriate funds for one or all of the proposed projects as recommended by staff to initiate work on the projects.
• Direct staff to return with a spending plan for a different set of projects or for use of the revenue loss funding.
FINANCIAL IMPACT
Staff recommends appropriating a total of $1,911,000 of the City’s first allocation of $14.34 million for the following uses.
|
Sub-Project |
FY 2021-22 Appropriation |
|
Midway Shelter |
$1,800,000 |
|
Alameda Food Bank |
$42,000 |
|
Wireless Hotspot Lending |
$69,000 |
|
Total |
$1,911,000 |
The funds would be appropriated within the 2021 American Rescue Plan project (C99300).
If the recommended projects are approved, appropriations of ARPA funding to-date will total $10,044,600, with $4,295,354 from the first ARPA allocation of $14,339,954 remaining to be appropriated. The City expects to receive a second allocation of $14,339,954 in 2022, which will be subject to future City Council appropriations approval.
Use of the $8,478,916 in revenue loss funding will be subject to future appropriations. Staff recommends allocating the revenue loss funding to projects or programs that would assist the community with recovering from the impacts of the COVID-19 pandemic or meet related policy objectives.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents.
ENVIRONMENTAL REVIEW
This action is not subject to environmental review as the activity is not a "project" for purposes of the California Environmental Quality Act (CEQA) because it is an organizational or administrative activity of the City that will not result in direct or indirect physical changes in the environment, in accordance with CEQA guidelines, section 15378(b)(5).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution amending the Capital Budget by increasing appropriations in the 2021 American Rescue Plan Project (C99300) by $1,868,000 for replacement of three portables and decking at the Midway Shelter, and purchase of wireless hotspots for lending. (City Manager 10021030/Finance 10024051)
CITY MANAGER RECOMMENDATION
The City Manager concurs with the initial recommended spending. We have put additional options for the Council to consider as we move forward in allocating the ARPA funds.
Respectfully submitted,
Eric Levitt, City Manager
Financial Impact section reviewed,
Annie To, Finance Director
Exhibits:
1. Eligible Uses
2. Proposed Spending Plan