The Clovis City Council discussed guidelines for the American Rescue Plan Act (ARP) funds during its Monday, May 17 meeting.
Clovis is receiving $17.3 million from the $1.9 trillion COVID-19 relief package approved by President Joe Biden in March.
The City will receive its funds in two separate payments of $8.65 million. They will receive the first half in 2021 and the second half in 2022.
On Monday, May 10, the Department of the Treasury released the guidelines for which the agencies receiving funds can spend them.
Clovis City Manager Luke Serpa presented the City Council with the guidelines and recommendations on how the City should spend the funds.
Allowable expenditures include response to public health emergencies or negative economic impacts, premium pay for essential workers, replace revenue losses due to the pandemic and infrastructure projects.
For public health emergencies, the City of Clovis is only allowed to pay for costs incurred after March 3, which Serpa said that the City has relatively low costs in this category.
The City could potentially offset lost revenue during the pandemic with ARP funds.
Serpa said as of December 31, 2020, Clovis lost $2.9 million in revenue.
Projections for lost revenue through 2024 could rise depending on economic growth, with the total potentially reaching a $12.6 million loss with 6% growth and a $27.4 million loss with 3% growth.
The City will be required to recalculate lost revenue each December 31 until 2023.
Serpa recommends that the City utilize the ARP funds to replace lost revenue at this time and evaluate further revenue losses with updated annual projections.
If the annual evaluations show that the projected revenue losses are less than the ARP allocations, the City will commit that money to other programs or projects.
Clovis doesn’t want to commit to an expenditure that the guideline allows for, only to have a refinement down the road and the money coming out of the City’s pocket.
“We also suspect that there’s going to be some refinements…we go through this over the next four years,” said Luke Serpa. “And keeping in mind that we don’t ever want to get caught doing something very creative that doesn’t stand up to the audit.”
The Council agreed with the recommendation of allocating the ARP funds into lost revenue, with many feeling that this allows for the best flexibility going forward.