Moline city council members and officials learned more Tuesday night about how they are allowed to spend $20.2 million the city will receive in funds from the American Rescue Plan Act.
Corporation Counsel Adam Simon of Ancel Glink led aldermen and Mayor Sangeetha Rayapati through a nearly hour-long presentation outlining allowances and spending restrictions for the relief funds.
President Joe Biden signed the $1.9 trillion American Rescue Plan into law in March. Included in the package is $350 billion in funding to restore the economies of counties and cities hard hit by the coronavirus pandemic.
"It's money designed to help our economy and our local communities recover more quickly from the negative economic impacts that were suffered and the negative health impacts that were suffered because of the pandemic," Simon said.
Because Moline is an entitlement community, it is able to get the money directly from the government, he said. The city received the first allotment several weeks ago and will receive the second half next year.
"Obviously there is a decent amount of money available for us to spend to assist the city and its residents in recovering from the pandemic," Simon said.
There are some criteria for what the funds can be used for, including assistance to households, small businesses and nonprofits; financial aid for tourism, travel and hospitality businesses; overtime pay to eligible workers of the municipality that performed essential work; grants for eligible employers that have employees who perform essential work; or investment in water, sewer and broadband infrastructure.
"And finally, the federal government prohibits the city, and all recipients, from using ARP money to replenish or start reserves or rainy day funds," Simon said. "The purpose of the money is to put it back into the local economy, either through direct assistance to businesses, direct assistance to residents, to pay for government services that help restore the economy to a healthy position."
Municipalities are not allowed to use the money to pay down debt, supplement pension funds or offset a tax cut directly or indirectly. This includes using the money to lower property taxes.
Funds must be allocated by the end of 2024, and all money must be spent; municipalities cannot hold onto the funds for an unlimited amount of time.
Simon said the funds also could be used to support public health efforts like vaccination clinics, COVID-19 testing and infrastructure that helps prevent exposure to the virus; and water, sewer and broadband infrastructure improvements.
Rayapati said Wednesday the next step is for council members to hold a special meeting to work through the draft strategic plan.
"We need to move our strategic plan from a draft to adopting it and combine it with information from staff and the public," Rayapati said. "We need that strategic plan to make the best decisions possible. It's all related to the budgeting. We are putting together a three-year budget, that's why the ARPA disbursement choices are closely tied to passing the budget this fall."