Almost four months after receiving $ 386 million in federal funds from the American Rescue Plan Act, the City and County of Honolulu are still tweaking their plans for distributing the money.
Honolulu received $ 193 million from Covid-19 relief funds in June and will get the other half next year. The city has until 2024 to commit the funds and until 2026 to spend them to allow authorities to try and meet longer-term needs, unlike the CARES law money that was intended for use. more immediate and had to be spent in nine months.
City Council and Mayor Rick Blangiardi’s administration largely agree on priorities when it comes to the need for spending on public health, economic recovery, infrastructure and income replacement. But the nine-member council is pushing to allocate more funds to affordable housing on the island, which saw the median house price exceed $ 1 million last month.
Anton Krucky, director of the Office of Housing, said he was unsure whether the city would use ARPA money to build affordable housing, but they are working on other strategies to come up with a plan.
âWe are looking at many different strategies for affordable housing,â Krucky said. âFrom the use of our land, our city’s land, acquisitions, motivated development, even programs that take people who are in affordable housing and move them through their lives to create other affordable housing. But we will continue to expand this plan.
So far, the city administration plans to allocate $ 110 million to provide support and address economic impacts, $ 156 million for economic recovery, $ 70 million for city operations and $ 50 million dollars to invest in infrastructure.
Of the $ 193 million, $ 10 million from ARPA has already been spent on Covid-19 testing, according to city spokesman Tim Sakahara, who said “the testing supplies were needed. when the delta variant soared “.
âThe city is working with city departments, the community and the council regarding the allocation of ARPA funding,â Sakarahara said in an email. âFederal ARPA guidelines are more detailed and prescriptive than the funding of the CARES Act. We want the public to know that the city’s priority will be to allocate funds to the highest and most important needs.
The main difference between CARES and ARPA is the time frame for spending the money and what it would be spent on. CARES was strictly emergency money to help businesses stay afloat and provide a safety net for people who have lost their jobs.
President Joe Biden signed the ARPA into law in March to fight the public health crisis and revive the economy devastated by the pandemic last year.
ARPA dollars can be used to support public health, cope with economic impacts, provide services to disproportionately affected communities, replace lost income, provide a bonus to essential workers, cover administrative costs, and invest in water. , sewers and broadband infrastructure.
They cannot be used for deposits in a pension fund, financing of debt service, payment of settlements or court judgments, and deposits in rainy day funds or financial services.
City Council Chairman Tommy Waters asked about the use of the funds to support affordable housing during a joint committee meeting on Tuesday.
The city budgeted $ 170 million for affordable housing, including the restoration of $ 100 million that was on the chopping block, in its capital improvement budget that went into effect on July 1.
But Waters noted that the city would have to pay the debt service out of the capital improvement budget.
âWhen it comes to ARPA, it’s money. We don’t have to pay the debt service, âhe said at Tuesday’s meeting. “This would save money in the long run, especially if we are building rental housing for people where you don’t have to build debt service into the amount we spend if we use ARPA.
âI’m just throwing that over there,â he continued. “I think this is a good idea and I hope you are considering using the ARPA money to deal with our housing crisis.”
The council’s budget committee compiled a list of 13 areas where ARPA funds could be used for affordable housing, such as funding for the Homeless Outreach and Navigation For Unsheltered Persons program, housing infrastructure development affordable housing and expansion of existing affordable housing programs.
With more time to spend the funds, Blangiardi’s administration and city council are working together to use federal dollars to most needy areas. While the mayor can spend the first half of ARPA funds without council approval, the next ARPA payment will be approved in the council budgeting process.
“We remain hopeful that the administration tries to get these funds out in an efficient and fair manner and will have the maximum flexibility to do so,” city director general Michael Formby said at the meeting.
Waters also asked if the city administration could provide an online database for the public to see how the money is being spent – similar to the current one. dashboard which breaks down the financing of the CARES law since last year.
City budget manager Andrew Kawano said the website should be available by the end of next week.
The city administration is also in the process of creating a group of staff who would be in charge of ARPA procurement, dubbed Team Tiger.
âThe Tiger team will work closely with city departments and offices to execute the city’s stimulus plan projects to ensure prompt and compliant purchases that will secure federal reimbursement,â Sakahara said. âThe team will be made up of dedicated participants from procurement, departments and the CEO’s office. “
Honolulu is not the only city that takes its time to spend money.
A September 7 report from the Brookings Institution, a Washington, DC-based think tank, found that eight of the 20 major mainland cities surveyed had yet to spend their ARPA dollars.
“This is not necessarily surprising or worrying,” the report said, noting that cities had received only half of the tax relief funds, with the second half due to arrive in May.
âIn addition, the Treasury has advised cities not to commit all their money immediately, so that they can respond to the changing health and economic situation over the coming months. “