Flint, MI– During a Flint City Council meeting on April 25, the executive director of the city’s compliance firm answered questions about the status of a plan to spend federal COVID-19 relief.
In 2021, the city learned that it would be receiving $94.7 million dollars in American Rescue Plan Act (ARPA) funds as part of a $1.9 trillion economic stimulus package intended to aid the country in recovering from the pandemic.
The money has specific eligible uses, which are outlined in a 437-page document, and if spent incorrectly, the city will have to pay it back. To prevent that, the council voted to enter into a one-year contract with Ernst & Young, a compliance firm tasked with ensuring the money is spent properly.
Now that the mayor and the city council have hosted multiple community input sessions to hear from the public about their priorities for the funds, a spending plan is starting to take shape.
“We are gathering the input that was taken from those sessions as part of working with the administration and putting together an overall plan to be presented and discussed with council at a future time,” said Brian Jarzynski, the executive director of Ernst & Young, during the council meeting
Jarzynski answered the council’s questions about the plan, the application process for organizations that want funds, and the timeline for the whole process. Here’s a breakdown of the questions he answered for the council:
What is the draft plan going to look like?
Jarzynski told the council that the draft plan will be a proposed allocation of funds to specific projects and programs based on the input from the community meetings. He said the draft will also include a notice of funding opportunities and grant applications.
Currently, Jarzysnki said, the draft plan totals more than the $94.7 million the city was given.
“In which case, there will have to be some discussion and decisions,” Jarzynski said. “But we’re not making those decisions. … We’re gathering the information, prioritizing it, and then it’ll be presented back.”
How can people start applying to receive ARPA funds?
Jarzynski said it won’t be until after the administration and the council agree to priorities for the funds that people can begin applying for them.
First, he said, the overall plan of how to spend and prioritize the funds needs to be drafted and taken to council. Once an overall plan is in place, Jarzynski said the firm will be working with council and the administration to put together a budget strategy.
With the budget strategy, the council will be able to identify what he called “primary expenditure categories,” with allocated dollar amounts under each category.
“So for example, public safety, or housing assistance, those types of programs, each one will have an application process,” Jarzynski said. “And so those will be available at that time.”
He said that those applications are being drafted now with the draft plan. The draft will be reviewed by the council and the administration, and he estimated that it may take a few weeks before that happens.
What will the application process be like?
Jarzynski said that the intent of the application process is to make it equitable and accessible.
“I expect that there will be different levels of capability in terms of filling out an application and our objective is to make sure that people have a chance and opportunity to put together a complete application,” he said.
One example he gave was ensuring the application process, and the notice of funding opportunities aren’t only online because that may “disqualify” people right away if it’s not accessible. Another example was that some of the applications might require “financial forecasts” from the organizations about their proposed project.
“We will be working with whoever wants to apply to make sure that that information is gathered,” Jarzynski said. “Honestly, if some people don’t come up with that information, that could be a challenge for them, and it will be reflected in the overall evaluation.”
He said he planned to have access at City Hall for organizations to come in and get help with their applications.
What will the evaluation process of the applications be like?
Jarzynski said the compliance firm is planning to make recommendations to the council about how to qualify the various applications that come in, with the intent of giving “equitable treatment,” to the applicants.
“There will be various measurement points in terms of how much work the plan, their capability to deal with federal funds, perhaps the ultimate outcome anticipated with projects and programs, so that you can effectively score them and go through that process,” he said.
Is there anything that would disqualify applicants right off the bat?
Jarzynski said the only disqualification he could think of was if the organization was debarred, or forbidden, by the federal government, but he didn’t expect that to be a common issue.
“However, we are going to screen them to make sure that they’re not debarred. That would be a disqualifier,” he said.
Can organizations apply for funding next year?
The ARPA funds have to be obligated by the end of 2024. Given that time frame, Jarzynski said the council may choose to set aside some funds for projects that come up next year.
“I’d say, probably there should be some consideration for … leaving some of those funds available for ideas that may come in in a year or two that are in fact intriguing to council or others,” Jarznski said. “Other municipalities are doing the same thing. So you know, maybe you have $94.7 million, you don’t have to spend all $94.7 in the first flash.”
He said he thought it may be “wise” for the council to choose to set aside $10 to $15 million for future ideas.
Will the compliance firm be monitoring the organizations that receive funds?
Jarzynski said the firm will be monitoring the organizations that receive funding depending on the nature of the program or project.
“If it’s given to a not-for-profit, for example, to spend the funds, we will monitor their spending at various points across the process,” Jarzynski said. “We will also educate and train them in terms of how to use federal funds.”
For projects undertaken by the city directly, Jarzynski said the firm will be part of the procurement process, and maintain all of the documentation that goes along with that.
For entities that have dealt with federal funding before, like the Genesee County Land Bank for example, Jarzysnki said the firm will complete a risk assessment and monitor their activities throughout the “length of the funding” allocated by the city of Flint.
How much money has been spent so far? How much do we have left?
So far, Jarzynski said the only funds that have actually been spent already was for premium pay.
In February, the council passed two resolutions to spend about $2.7 million of the funds giving premium pay to certain essential workers.
There are also “obligations,” Jarzysnki said the council has now after approving resolutions to allocate money to a few different projects. Those include:
- The Miller Road water main project. On April 12, the council voted to enter into a contract with Zito Construction Company for $1,873,634.27 to replace the water main during the repaving of Miller Road.
- The Genesee County Land Bank demolition project. The council voted to spend $16 million in ARPA funds on a program aimed at fighting blight by demolishing more than 2,000 structures in Flint.
- Financial incentives for new police hires. In March, the council voted to allocate $500,000 in ARPA funds to provide “incentives” to qualifying newly hired officers.
There is also the contract with Ernst & Young. For one year, the contract was $1,150,650, but it includes options to renew it one year at a time. The additional cost for each year will follow the same costs provided in the original contract: $884,380 for Year Two, $738,025 for Year Three, $627,494 for year four, and $593,525 for year five.
Jarzynski said that the contract is part of “administrative expenses” and not an expenditure.
Not including the compliance firm contract, this leaves roughly $74 million.