3.5 ARPA Funding Standard Allowance
Request for
City Council Action
DEPARTMENT INFORMATION
ORIGINATING DEPARTMENT REQUESTOR: MEETING DATE:
Administration City Administrator/Finance Director Flaherty April 25, 2022
PRESENTER(s) REVIEWED BY: ITEM #:
Consent 3.5 – ARPA Funding
Standard Allowance
STRATEGIC VISION
MEETS: THE CITY OF OTSEGO:
X Is a strong organization that is committed to leading the community through innovative
communication.
Has proactively expanded infrastructure to responsibly provide core services.
Is committed to delivery of quality emergency service responsive to community needs and
expectations in a cost-effective manner.
Is a social community with diverse housing, service options, and employment opportunities.
Is a distinctive, connected community known for its beauty and natural surroundings.
AGENDA ITEM DETAILS
RECOMMENDATION:
City staff recommends City Council adopt a resolution electing the Standard Allowance for ARPA funding.
ARE YOU SEEKING APPROVAL OF A CONTRACT? IS A PUBLIC HEARING REQUIRED?
No No
BACKGROUND/JUSTIFICATION:
In March 2021, Congress adopted the American Rescue Plan Act (ARPA), which included $350 billion in
recovery funds intended to provide support to state, local and tribal governments in responding to the
impact of COVID-19 and in their efforts to COVID-19 in their communities, residents, and businesses.
The City of Otsego has been allocated ARPA funds from the State of Minnesota, with half of the allocation
being distributed in 2021, with the remaining half planned to be distributed in 2022. To date, the City of
Otsego has received distributions totaling $989,714.59.
The United States Department of Treasury issued the Final Rule on January 6, 2022 outlining guidance
regarding the use of ARPA funding. The Final Rule included guidance that recipients may elect a standard
allowance to replace lost public sector revenue up to a maximum amount of $10 million and used those
funds for services traditionally provided by the recipient government.
City staff recommends the City Council elect the Standard Allowance which will allow the most flexibility in
use of the ARPA funding at the discretion of the City Council and simplify the reporting requirements for
City staff.
The coverage period for using the funds began on March 3, 2021, with the deadline for obligating the funds
by December 31, 2024 and expended to cover such obligations by December 31, 2026. City staff will
continue to monitor guidance from the Treasury throughout this period to ensure the City is in compliance.
The City Council was presented information during a Special City Council meeting on March 14, 2022.
Additional information on the Standard Allowance was presented to the Administrative Subcommittee at
their April 13, 2022 meeting, with recommendation to proceed to full City Council for consideration.
SUPPORTING DOCUMENTS ATTACHED:
• Resolution 2022-40
POSSIBLE MOTION
PLEASE WORD MOTION AS YOU WOULD LIKE IT TO APPEAR IN THE MINUTES:
Motion to adopt Resolution 2022-40 Utilizing the Coronavirus Local Recovery Funding Established Under
the American Rescue Plan Act for the Replacement of Lost Revenues.
BUDGET INFORMATION
FUNDING: BUDGETED:
N/A
N/A
CITY OF OTSEGO
COUNTY OF WRIGHT
STATE OF MINNESOTA
RESOLUTION NO: 2022-40
UTILIZING THE CORONAVIRUS LOCAL RECOVERY FUNDING
ESTABLISHED UNDER THE AMERICAN RESCUE PLAN ACT
FOR THE REPLACEMENT OF LOST REVENUES
WHEREAS, Congress adopted the American Rescue Plan Act in March 2021 (“ARPA”) which included
$350 billion in recovery funds to provide support to state, local, and tribal governments in responding to
the impact of COVID-19 and in their efforts to contain COVID-19 in their communities, residents, and
businesses; and
WHEREAS, the City of Otsego has been allocated ARPA funds from the State of Minnesota pursuant to
the ARPA allocation; and
WHEREAS, the State of Minnesota distributed the first half, $958,331.86 of ARPA funds on July 27, 2021
and the City expects to receive the remaining second half of the funding in 2022; and
WHEREAS, nearly $12 million of ARPA funds remained unclaimed after the October 11, 2021 deadline
and the state of Minnesota distributed additional ARPA funds to eligible governments; and
WHEREAS, the City received $31,382.73 on November 23, 2021, the first half of the additional American
Rescue Plan Supplemental Distribution; and
WHEREAS, the United States Department of Treasury released the Final Rule on January 6, 2022 outlining
guidance regarding the use of ARPA funds; and
WHEREAS, the Final Rule notes that recipients may elect a standard allowance to replace lost public sector
revenue up to a maximum amount of $10 million and use those funds for services traditionally provided
by the recipient government; and
WHEREAS, the City Council has met to discuss and review the use of the ARPA funding.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OTSEGO, MINNESOTA:
1. The City Council has met to discuss and review the City’s share of ARPA funding and hereby
elects the Standard Allowance for the City’s full allocation of funding consistent with guidance
from the United States Department of Treasury.
2. City staff is hereby authorized to complete the necessary APRA Project and Expenditure Report
electing the Standard Allowance.
ADOPTED by the Otsego City Council this 25th day of April, 2022.
MOTION BY:
SECONDED BY:
IN FAVOR:
OPPOSED:
CITY OF OTSEGO
__________________________________
Jessica L. Stockamp, Mayor
ATTEST:
__________________________________
Audra Etzel, City Clerk