Los Banos City Council getting millions in federal stimulus funds. How are they spending it?

The Los Banos City Council voted 4-1 on Wednesday night to reallocate the city’s remaining American Rescue Plan Act (ARPA) money to “revenue reimbursement,” or to backfill a reduction in revenues.

The city has already received $4.9 million of ARPA funding, some of which will go toward backfilling revenue reductions. It expects to receive another allocation for the same amount of money in July for a total of $9.8 million.

Under a newly issued “final rule” from the U.S. Department of the Treasury, up to $10 million — in the cases of many cities, the total amount of ARPA dollars a city receives — can be allotted to backfill city revenues lost because of the COVID-19 pandemic. No more than $10 million can be allocated from a city’s ARPA money allocation to pay for “general government services.”

“It is more flexible, and the reason for that is that the allowable spending is on government services — things like building infrastructure, whether its parks or roads or maintenance, police and fire, the general things that we do every day,” said Sonya Williams, the city’s finance director.

After much debate, the city council decided to use the remaining ARPA money to help offset city costs sustained during the COVID-19 pandemic as opposed to using some of the money for a small business grant program. District 2 Council member Refugio Llamas was the sole vote against the proposal to allocate ARPA money toward revenue reimbursement.

“There’s been a lot of assistance and a lot of help,” Mayor Tom Faria said about various state and federal programs to aid struggling businesses. “If we can start getting infrastructure in place to make this place more inviting for commercial-industrial development, that’s a good way to spend our ARPA money.”

City council members already voted in a previous meeting to spend some of the ARPA money on a gift card program to help downtown businesses, as well as on establishing a homeless assistance program, making improvements to Colorado Park and establishing premium pay and benefits for city employees for the 2021 fiscal year, among other priorities.

Premium pay is also allocated for city employees for the 2022 and 2023 fiscal years in the amount of $900,641.

Previously, the city council voted to establish a gift card program, known as the RAD Card program, along with a homeless assistance program and other priorities. The $1 million RAD Card program is not just funded by ARPA dollars, but matching funds from the city. Each card can be used at participating downtown businesses in Los Banos and has a $100 limit.