What is ARPA funding and how is it being used?

If you follow news coverage of the comings and goings and doings of the City of Boulder City —and especially the comings and goings of money from city coffers —you will have, no doubt, noticed a new term that is thrown around with some frequency over the past few years.

ARPA. It is referred to on subjects that are seemingly unrelated ranging from the recently opened dog park, to the purchase of tasers for the police department to the lunch program at the Senior Center to the redesign of the irrigation system at the municipal golf course.

So, what is ARPA money and how is it being spent?

What It Is

ARPA is the abbreviation for American Recovery Plan Act. Enacted in March of 2021, it will be remembered by most as the third round of economic stimulus passed by the federal government in the wake of the Covid-19 pandemic, which officially began one year earlier.

Stimulus packages were passed under Republican and Democratic control of the national government. The CARES Act, or Coronavirus Aid, Relief, and Economic Security Act was the first and was passed and signed into law within a week of the World Health Organization declaring the beginning of the pandemic. That $2.2 trillion in stimulus money was followed in December of 2020 with an additional $900 billion as part of the general appropriations for the 2021 fiscal year. Both of those were passed under the Trump administration.

President Joe Biden promised additional spending in January of 2021, before he was actually inaugurated. That promise eventually became the $1.9 trillion ARPA.

But ARPA had a key component that made it different from the previous two stimulus packages. Where the bulk of spending in 2020 went to individuals and businesses in the form of direct payments, refundable tax credits for families with children, expanded unemployment benefits and forgivable loans, ARPA included $362 billion on a ledger line called “community development.” This was funding intended to support state and local governments.

In hindsight, the need for ARPA is a matter of some disagreement. First, most economists now agree that the spending had at least some impact on the historic levels of consumer price inflation that peaked in 2022 and remains stubbornly high. (Ironically, as the Federal Reserve has raised interest rates to deal with inflation, that has increased what many government entities have to pay to service their debt, which has led to some revenue shortfalls.)

Additionally, according to the Government Accountability Office, while state and local government revenues dropped by more than $60 billion in the period between April and June of 2020 (compared to the same period on 2019), revenues rebounded through the remainder of 2020. That was quite definitely the experience for Boulder City.

In a meeting to discuss enterprise funds and how they fit into the overall city budget, City Manager Taylour Tedder said, “The city did not experience a revenue loss due to Covid.”

As noted in previous coverage, about 75% of the Boulder City budget is funded by the consolidated tax which is a combination of sales, tobacco and alcohol taxes in Clark County and is often referred to in government shorthand as the “C-Tax.”

“If you look at C-Tax, of course it dropped off big time in the March, April and May of 2020 time frame, then it bounced back. People were spending stimulus money, things of that nature. So our revenue, between fiscal years 2020 and 2021, we did not lose revenue year-over-year,” he said.

In total, Boulder City has received or been promised more than $21 million in ARPA funds. Of that, $10 million was restricted to uses that were directly tied to the pandemic and just north of $11 million was unrestricted.

How ARPA Funds Are Being Used

When the pandemic first hit, Boulder City was in the final phases of setting the fiscal year 2021 budget. With uncertainty about future revenue and with the city being unable to issue debt above $1 million without getting the approval of voters, the only option was to cut. And the city cut what had earlier been proposed by about 40%.

Some of the restricted funds directly addressed Covid, including a raffle to incentivize people getting vaccinated, test kits and vaccines and personal protective equipment. Organizations that were directly impacted by shutdowns, including the Boulder City Museum and See Spot Run dog park received funding. The Senior Center got $100,000 for facility upgrades and another $100,000 went to provide broadband connectivity for city-owned buildings.

But the big money for the city came from the $11 million in unrestricted funding.

A pilot program to replace some city vehicles with EVs got $350,000. City Hall was brought into Americans With Disabilities Act compliance at a price tag of $250,000. A half-million dollars were spent to update the municipal code and an additional $300,000 went to cover unfunded state mandates affecting the municipal court.

Pickleball courts got $160,000 and $95,000 went to fund the new dog park. But the two biggest line items were large capital projects that Tedder characterized as “once-in-a-lifetime” opportunities —$1.6 million for the construction of a fire substation and $4.5 million for the municipal golf irrigation project.

“ARPA funds allowed us to do projects sooner or faster for things that we never would have contemplated doing,” Tedder said. “We’re still trying to spend that money because we have until the end of 2026. But we are moving quickly forward on that. Getting the projects off the ground is what took so long and now they are in the works. A lot of the projects, like the municipal golf course irrigation project, we never could have paid for those without ARPA funds.”