Flint, MI– After multiple discussions and postponements, the Flint City Council has approved a contract with a compliance firm to assist the city in spending American Rescue Plan Act funds.
The council initially considered a five-year contract, but during their Jan. 10 meeting, the council voted to amend it to a one-year contract with options for renewal.
“I agree with us having a company for compliance,” said Councilwoman Tonya Burns. “This way we get a chance to get to know what this company is for, and then we may need them for the entire five years.”
In March, the city learned that it would be receiving $94.7 million dollars in COVID-19 relief 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 it is spent incorrectly, the city will have to pay it back. To prevent that, the administration has been adamant about hiring an outside compliance firm to ensure the money is spent properly.
The administration’s original proposal was a five-year contract with Ernst & Young not to exceed $3,994,074, which is about 4.2% of the total ARPA funds the city is receiving.
During their regular council meeting on Jan. 10, those discussions continued resulting in the approval of a one-year contract for $1,150,650, with 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.
The city’s Chief Financial Officer Robert Widigan said he would have preferred for the council to go for a two-year contract at least, but that he and the firm were willing to do a one-year contract so they can “get to work.”
The first two years will be the most work, he said.
“Our heaviest lift, the community meetings, getting the plan in place, getting the dollars out of the community quickly, is going to be in year one and two,” Widigan said.
But he said that he was “very confident” that the city staff could start taking on more of the “bulk of the work” in years three, four, and five, once they “get past that first hurdle.”
The firm will be responsible for compliance, as well as evaluating the economic impacts of proposed programs, “leveraging” the dollars by finding other available resources, and documenting the spending of funds in an online visualization dashboard for the public, Widigan said.
The council voted 7-0 to approve the one-year contract. Councilman Dennis Pfeiffer and Councilwoman Eva Worthing left the meeting early and were absent from the final vote.