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Tuesday, May 30, 2023

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Sentinel staff report–
Under new federal guidelines, up to $10 million from federal American Rescue Plan Act dollars can now be spent on building roads or nearly any government service in Citrus Heights — rather than only going towards restricted uses for COVID-19 recovery efforts.

On the Citrus Heights City Council, however, not everyone was happy with the news of more flexibility in allocating the $15.6 million the city is receiving in funding from the $1.9 billion federal rescue legislation passed last year.

“You know, this is not the American government rescue plan,” said Councilman Bret Daniels during a Jan. 13 council meeting when a summary of the new guidelines was announced. The councilman said he wasn’t surprised to see the change in guidelines coming from a presidential administration he’s been critical of, but said “this is supposed to be something for people and businesses.”

“I don’t support and won’t support any other funds being moved towards the city, if you will, the city government of these dollars,” he said. “It would be such an incredible disservice, I think, to the community to take these dollars and do that.”

Original interim guidelines released by the U.S. Treasury last year had provided much more restriction on how funding could be spent. Those guidelines allowed only for a portion of the funds to go towards providing government services “up to the amount of revenue lost due to the covid-19 pandemic,” according to Bill Zenoni, the city’s top finance guru.

Zenoni said the final rules were released Jan. 6 and allowed for a key change. “All public agencies have the ability to use up to $10 million of their American Rescue Plan Act allocation for the lost revenue category,” he said.

Funds in the “lost revenue” category can be used for any government service, including staffing, administration and facilities, road building, maintenance and other infrastructure, and purchasing police vehicles, Zenoni said. Additionally, there are some expanded eligible uses for capital expenditures, affordable housing, and “hiring above pre-pandemic baseline.”

Vice Mayor Tim Schaefer said he shared concerns raised by Daniels, but also said the greater flexibility was “great news.”

“The concern that I have is these are one-time funds, and if we build into staff those one-time funds we’re obligating our long-term to those same funds and we may not have those funds to replenish them with,” said Schaefer. “So I would take a very cautious approach to how this money gets allocated.”

Councilwoman Jeannie Bruins, who sits on the city’s finance committee, said she agreed with Schaefer and advocated for the funds going toward a “comprehensive or holistic program.”  She affirmed a staff recommendation to use $300,000 immediately for supporting local businesses, followed by more than $1 million in further business support.

“It’s not interpreted as Mr. Daniels has said that we want to take money away from the business community,” said Bruins. “We just want to step back and put together a program that’s going to be sustainable for this $10 million.”

Following discussion and support from Mayor Porsche Middleton and Councilman Steve Miller, a majority of council members directed staff to immediately move forward with directing approximately $300,000 for a Small Business Recovery Grant Program, followed by a future study session to further assess use of funds.

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