Independence to plug budget holes with federal aid
Independence city officials hope to use funds from the federal government’s latest stimulus bill to plug budget holes and cover many one-time initiatives that otherwise might have been cut or shelved.
Unlike CARES Act funds from last spring and summer, funds from the American Rescue Plan Act will flow directly to municipalities and can be used for revenue replacement and for infrastructure. In general they’re more flexible and can be used over a longer period of time.
Independence will receive about $20.3 million in Rescue Plan funds, and the early outline City Manager Zach Walker showed to the City Council on Monday has $12.9 million slated for fiscal year 2021-22, which starts July 1. Walker said that without the Rescue Plan money, Independence would be dealing with a budget shortfall of nearly $4 million in the general fund, which covers most city services outside of the utilities.
The general fund ia covered by the city sales tax and fees for various city services. The tourism fund comes from the transient guest tax. Those two have taken the hardest hits in the pandemic.
“This makes our budget picture far less draconian,” Walker told the council.
“We are recommending using a portion of our allocation for that purpose in response to some of our hardest-hit funds,” he said Tuesday. “This helps us avoid severe cuts that would obviously have a devastating impact on the community.”
Walker proposes more than $3.1 million to cover lost revenue in the general fund and $150,000 in the tourism fund. Among those plans:
• $2.35 million over four years to reduce blight, including illegal dumping mitigation, trash removal, tearing down dangerous buildings and restoring the abandoned vehicle enforcement program.
• $2.4 million toward the U.S. 24 enhancements, covering where federal funds wouldn’t cover the planned work.
• More than $2.1 million to pay off the parks department’s loan from the water department reserves that paid for most of the Uptown Farmers Market building.
• $120,000 for a housing study and nearly $250,000 for sidewalk installation and replacement.
• $1.46 million over four years for police hiring incentives, ballistic helmets and shot spotter technology.
• $385,000 toward start-up costs with the reinstated Health Department.
• $750,000 toward bus services.
• $310,000 toward partnered job training programs.
• $6.25 million toward health insurance coverage and employee health subsidies.
The health insurance infusion, Walker said, should at least “significantly deter” a future premium increase.
“We’ve really tried to be responsive to the council priorities,” Walker said.
Mayor Eileen Weir said there could still be CARES Act funds available regionally to help with bus service, and she particularly wanted to examine the job training program funds.
“It would be beneficial to know what our major employers in our city are lacking, and making sure we’re fitting that need,” Weir said.
Blue Springs looks to receive about $6.7 million from the Rescue Plan, Lee’s Summit $9.2 million, Grain Valley $2.6 million, Oak Grove $1.5 million and Sugar Creek about $600,000. Jackson County will receive more than $136.3 million.
Local governments will get two equal payments – one in May and the second half a year later. Funding must be spent by the end of 2024.
Across the country, the local portion of stimulus funds is about $130 billion, equally divided among cities and counties. For the cities more than $45 billion of the $65 billion will be allocated to cities with a population over 50,000 (in Eastern Jackson County, that’s Independence, Blue Springs and Lee’s Summit), using a formula similar to how annual Community Development Block Grant funds are allocated. The remaining city funds will be allocated based on population, but they won’t exceed 75 percent of the city’s most recent budget as of late January 2020. For counties, the $65 billion will generally be allocated based on population.
With the CARES Act, cities had to use funds for expenses incurred because of the pandemic and not budgeted prior to that. They had to spend the money or have it under contract by the end of 2020. Independence received about $6 million under the CARES Act.