U.S. Department of Treasury rules require cities and counties to encumber the more than $100 billion they received from the American Rescue Plan Act by next year. Money not spent by 2026 will be returned to the federal treasury.
The Hot Springs Board of Directors will consider a resolution Tuesday that meets both deadlines for the unrestricted balance of the $11.37 million the city received from the $1.9 trillion legislation. The action would authorize the city to transfer $6.74 million to the general fund as a reimbursement for salaries and benefits. It doesn't specify the time period the reimbursement covers.
The final rule the Treasury Department issued last year allows local governments to claim a standard allowance of up to $10 million in lost revenue that can be spent on government services, including road building and maintenance, health services, government administration, police, fire and other public safety services. The city opted for the full allowance.
"These funds would be restricted and would only be used after specific city board approval and budget amendment," the city said in its request for board action.
A report included with the request showed the city has spent $3.26 million from its unrestricted ARPA account. Most of it went to the police department, with the board approving a budget adjustment in March that replaced $1.84 million in the police fund's operating budget with ARPA funds.
The same amount earmarked for operations was moved to the capital budget, funding the $1.29 million upgrade of the department's body-worn cameras and in-car video systems, five new vehicles, three drones and the build out of the emergency operations center. The city said federal procurement rules would have to have been followed if ARPA funds were used for capital purchases. Using city funds allowed it to follow less stringent city and state requirements.
An additional $442,045 from the city's unrestricted ARPA account was used to fund the city's share of salaries and benefits for five new police officers. The Department of Justice Community Oriented Policing Services grant the city won in 2021 will fund 75% of the new officers' salaries and benefits for three years.
Other money spent from the unrestricted account included $113,268 for $300 bonuses the city paid its employees to get vaccinated for COVID-19 and $853,066 for $1,200 end-of-year bonuses the city paid full-time workers in 2021.
The $1.17 million remaining in the city's restricted ARPA account is still subject to the 2024 and 2026 spending deadlines and federal procurement rules.