ARPA Funding
The current status of ARPA in Lexington
As of August 21, 2023 LFUCG has allocated $119 million of the $121 million worth of ARPA funds they received, in 7 different funding categories: Public Health, Negative Economic Impacts of COVID, Premium Pay, Infrastructure, Revenue Replacement, and Administration. These are the categories that ARPA money is eligible to be spent on, as laid out in a document from the federal government called the interim final rule.
$24.6 million of this has actually been spent
These allocations have gone towards 78 different projects
15 of these projects are more or less complete, including Premium Pay for LFUCG workers, Grants to agencies like the Lyric Theater, NAMI, and the Explorium, and several parks projects including park shelter roof repairs, playground improvements, and new diving boards
The rest of the projects are still going. LFUCG has until the end of 2024 to allocate the money, and the end of 2026 to actually spend it.
You can view a living database of the projects here
There is a team of 8 people working on administering ARPA within LFUCG. You can contact them at arpa@lexingtonky.gov
More ARPA Details
Counties, states, and other institutions all across America are receiving financial relief from the American Rescue Plan Act.
LFUCG will receive its’ $120M in Federal COVID Relief money in two “tranches.” 50% will come in May of 2021, and 50% will come in May of 2022.
Council will decide how to allocate the money, with input from the Administration and residents.
The funding must be allocated by December 31, 2024, and spent by December 31, 2026.
The funds must be allocated for specific uses as laid out in what is ominously called an “Interim Final Rule” by the Department of Treasury. You can read that here.
Here is a very broad interpretation of those uses:
Support public health expenditures
Address negative economic impacts from COVID
Replace lost public sector revenue
Provide premium pay for essential workers
Invest in water, sewer, and broadband infrastructure
Past ARPA Updates in the CivicLex Weekly:
Public Input and ARPA
LFUCG has made several efforts to receive public input about ARPA Funding and what to spend it on.
They initially conducted a survey that receive 3,287 responses
District 5 CM Liz Sheehan and her staff created this breakdown of that survey response data.
Council 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.
These 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
Revenue Replacement for ARPA Funds: Money with no strings attached!
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. Right now, the finance department has estimated that LFUCG qualifies for about $30 million of Revenue Replacement funds. There will be another infusion at the end of the year, but the majority of the ARPA money still has to be spent on qualified projects.
Here’s what you need to know:
Keep in mind, the ARPA subgroups haven’t been in regular communication with each other and some ARPA funding has already been allocated.
In total, ARPA Subgroups are proposing $97M worth of projects that only qualify through Revenue Replacement.
LFUCG is only expecting to receive about $30 million in funds for Revenue Replacement this year.
So far, the ARPA Subgroups are proposing ~$34 million worth of projects that are guaranteed to qualify for ARPA restrictions.
If the projects listed as such require Revenue Replacement, the subgroups may not have enough ARPA-qualifying projects to expend all their ARPA funding.
How did LFUCG determine which projects get funded?
In the summer of 2021, Council released a public survey and an opportunity to submit projects for ARPA consideration.
Council received 3,287 responses to the public input survey. District 5 CM Liz Sheehan and her staff created this breakdown of the survey response data.
Council also received 1,084 specific project proposals, which you can view here - it is one of Lexington’s most up-to-date resources on what our residents care about right now and is worth a read.
These priorities will guide what projects are selected by Council for funding.
LFUCG has set its own priorities for ARPA funding consideration that fit within federal guidelines. Those are:
Community Health, Wellness, & Quality of Life (ex: physical and mental health, social services, food insecurity, community centers, green infrastructure)
Critical City Services, Employee Retention, & Facilities (ex: waste collection, streets and roads, paving, cybersecurity, bonuses for LFUCG frontline workers)
Economic Recovery & Growth (ex: small business loans, supporting entrepreneurs, financial empowerment, broadband investments, agricultural initiatives)
Equity-Focused Services and Partnerships (ex: supporting vulnerable populations impacted by COVID-19)
Growing Successful Neighborhoods (ex: affordable housing, housing rehab programs, trails, parks, aging in place services)
Harm Prevention and Public Safety (ex: violence prevention, pay and equipment for police, fire, code enforcement)
How specifically will Lexington implement ARPA-funded projects?
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.
