Lexington’s ARPA
Funding
What is ARPA Funding?
In March of 2021, the Federal Government passed the American Rescue Plan (ARPA) Act, funding a variety of COVID relief plans. This included giving one-time grants to cities, towns, and agencies all around the US. This money is ARPA funding.
Lexington’s local government received $121 million in ARPA funding. Since the funding was announced, CivicLex has tracked what LFUCG’s Urban County Council funded and how they made those decisions.
Council decided how to allocate ARPA Funding with input from the Mayor’s Administration and residents. The funding had to be allocated by December 31, 2024, and spent by December 31, 2026. ARPA funds had to be allocated for specific uses as laid out in what is called a “Interim Final Rule” by the Department of Treasury. You can read that here.
Lexington’s ARPA funding went to a wide variety of projects, but mostly focused on housing, social services, and parks. CivicLex developed a comprehensive, searchable database of all of LFUCG’s ARPA allocations. You can can access that here.
📮 ARPA Updates:
How is the city using ARPA funds?
While there federal rules that guide how ARPA funds can be used, the City of Lexington used ARPA funding to address some long-neglected issues, fund some back-burnered projects, and as an opportunity to let residents guide city investments. CivicLex developed a comprehensive, searchable database of all of LFUCG’s ARPA allocations. You can can access that here.
Lexington’s ARPA allocations break down into the following categories:
Public Health - Projects help with the spread of COVID-19 spread and to address health outcomes caused by the pandemic.
Negative Community Economic Impacts from COVID-19 - Projects to address how COVID-19 impacted Lexington’s workers, businesses, and communities.
Negative Economic Impacts for Public Sector - Projects to address how COVID-19 impacted Lexington’s public sector health, safety or human services workers.
LFUCG Essential Worker Pay - Funding for essential workers who were on the front lines of the response to the COVID-19 pandemic.
Infrastructure Projects - Project to make improvements in sewer, broadband, and water infrastructure.
Revenue Replacement for LFUCG - Funding to replace LFUCG revenue lost by the COVID-19 pandemic.
Administration - Funding for management and oversight of the city’s ARPA funding and the programs it created.
The city has allocated all $121.2 Million of its ARPA funding. Below, you can see a chart that provides an overview of these allocations.
How were decisions about ARPA funding made?
$121.2 Million is a lot of money - the equivalent of about a third of LFUCG’s General Services Fun budget per year. With ARPA, Lexington took a historic step to engage the public in its municipal financial decision making.
Public Engagement
Initial funding decisions from the city’s allotment of ARPA revenue were made by Mayor Linda Gorton in her FY21 budget, mostly directed towards Parks and Recreation projects and emergency issues related to COVID. Following her budget’s passage, and a public announcement about her administration’s ARPA funding priorities, the Urban County Council launched a process to gather public input on how the funds should be spent.
Council first launched a survey that received 3,287 responses from the general public. District 5 CM Liz Sheehan and her staff created this breakdown of that survey response data. They also released a second survey that allowed residents to submit projects directly. That survey received 1,084 specific project proposals, which you can view here.
Once the public provided input, the Urban County Council broke into small ARPA subgroups to sort through the proposals and create a slate of projects to be adopted. CivicLex attended every single one of the ARPA subgroup meetings and you can find a public database of those ARPA subgroup meeting notes here. Council also created a database of public documents related to ARPA meetings here, including meeting agendas, tables of proposals, and more.
Many of the resident-recommended projects actually make up the majority of ARPA projects that are being funded. Additionally, specific ARPA projects, like improvements to a certain park or nonprofit capital grant programs, have their own public input opportunities, including surveys, polls, and workshops.
Who else got ARPA funding?
The City of Lexington isn’t the only entity in Lexington to receive ARPA funding. Check back here in Fall 2024 for more information on how Fayette County Public Schools, LexTran, and other agencies used their federal ARPA funding.
Other CivicLex ARPA Resources
More of CivicLex’s ARPA coverage
February 21, 2022, February 14, 2022, January 24, 2022, January 17, 2022, December 6, 2021, November 29, 2021, November 8, 2021, November 1, 2021, October 25, 2021, October 18, 2021, October 11, 2021, October 4, 2021, September 12, 2021, September 19, 2021, September 6, 2021, August 30, 2021, August 23, 2021, August 16, 2021, July 25, 2021, July 19, 2021, July 12, 2021, July 5, 2021, June 7, 2021
LFUCG’s ARPA Governing rules
All projects must be implemented and reported on according to the Department of Treasury’s Interim Final Rule and the Compliance and Reporting Guidance State and Local Fiscal Recovery Funds documents.
Council will evaluate projects based on the priorities in the Treasury’s Final Rule, LFUCG’s priorities, and some basic risk/reward weighing.
Once a project has been selected by the council, a budget cap will be set and a budget amendment will be filed to create the project.
As a reminder, Budget Amendments require both first and second readings - plus a ⅗ majority vote.
After the project has been funded by council, the administration will set up an “internal project form”, containing the essential details of the project, including budget, population served, and more.
The process gets more complicated with project administration. Many departments, divisions, and public entities will have to work together to monitor the project’s progress and costs, but this is typical of many city projects that already exist.
Once the project is in process, quarterly and Annual reports will need to be submitted. Quarterly reports will track elements like finances and contracts, annual reports will also track more qualitative data like community engagement, equity, and labor practices.
All projects must be selected by 12/31/2024 and have to be completed by 12/31/2026. Project reports and financial records will be preserved until 12/31/2031. All forms are open to inspection by Treasury at any time.
What’s the deal with Revenue Replacement?
The $120 million that LFUCG is receiving from the federal government has rules attached. Because it is designed for COVID recovery, most of it can only be spent on certain areas, like public health, aid for communities most impacted by COVID, or certain types of infrastructure.
However, there is an additional piece of the ARPA puzzle that is referred to as “Revenue Replacement”, and is used to replenish revenue that governments lost during the pandemic. Under Revenue Replacement, most government functions are allowed, which removes many of the restrictions of typical ARPA funds.
But, there is only so much of it. A complicated formula determines how much of its ARPA disbursement a city can use for Revenue Replacement.