Common Council Approves Allocations For $6,891,841 In ARPA Funding

During the 11/03/2021 Appleton Common Council meeting, the Council members discussed and eventually approved the recommended 2021 allocations for the American Recovery Plan Act (ARPA) funds and approved the related 2021 budget amendment.

Alderperson Chad Doran (District 15) asked for the item to be separated out for an individual vote and was alderperson to open up the discussion. He made an amendment that they remove from the allocation the $2 million for broadband for the library project, the $250,000 in Short Term Community Support, and the $150,000 for Consulting And Administration Support.

He thought that he the $2 million for the library project could be a beneficial use of the money but at this point they had not idea what that broadband access and infrastructure was going to cost. It could come in well under $2 million or well over $2 million. He thought it would be smart to hang onto the item and set the money aside until they had a better idea of how much that piece of the project would actually end up costing. Allocating that money without really knowing what the cost of broadband would be, he thought would send a bad message to the community. He was willing to discuss it in the future when they knew more.

Regarding the other items, he thought there were better ways to use that money and there was an opportunity to have more discussion about it in the 2022 allocations. He thought they should be careful about where they were going with that.

He was happy to support the other items in the allocation recommendation, but he was making a motion to set aside the last three recommended allocations.

Alderperson Michael Smith (District 10) seconded the motion.

Alderperson Matt Reed (District 8) said he had also had some thoughts about other ways the funding could be used. He wanted to clarify if removing the Consulting and Administration Support would affect the distribution of the other allocated funds such as the Lost Revenue reimbursements or the Lead Service Line Abatement & Sewer/Water Infrastructure.

Mayor Woodford responded that the $150,000 Consulting and Administrative Support recommendation was to support the community input gathering process and the process development for the recommendations that were included in the 2022 executive budget and service plan. Removing that item from the 2021 allocations would not affect the other items in the recommendation, but it would affect the process development for those category 2 recommendations in the 2022 budget.

Alderperson Vered Meltzer (District 2) encouraged the other alderpersons to defeat the amendment. “I think that the public has spoken strongly in their input in support of the $2 million broadband allocation and the direct community support and the consulting. I think that these are items that—these are issues that we can address now. These are items where haste is more important than long and drawn-out discussions. I believe that we have had ample opportunity for public input that the message has been loud and clear, so I would encourage us to defeat this amendment and stay with the allocations as they are proposed.”

Alderperson Sheri Hartzheim (District 13) said that based on the discussion at the previous Finance Committee meeting, the $2 million for the library broadband sort of felt like a marker. If it wasn’t enough that it wasn’t enough and if there was more left over than those funds would come back to the Council to do something with. She was satisfied leaving the $2 million in the allocation. “I disagree with the amendment that’s on the table. But I would be interested in discussing further the other two items on the amendment.”

Alderperson Denise Fenton (District 6) wanted to clarify what the amendment would do. Would it move the funds they were discussing into the 2022 budget rather than using them as a part of the 2021 budget amendment?

Alderperson Doran responded that his amendment was intended to hold that money for future use.

Alderperson Fenton still wasn’t clear on what would happen with the funds or where they would go if they were not allocated in this budget amendment.

Finance Director Saucerman explained that the Council could remove that funding from the allocation. Money wasn’t allocation would become what is called “Deferred Revenue”. It would sit and wait until it was allocated someplace. They didn’t necessarily have to allocate the fully amount of what they were talking about tonight. The city had until December 31 of 2024 to spend the money. They could let it sit and then allocate it at a future date.

Alderperson Alex Schultz (District 9) shared Alderperson Doran’s concerns about that $2 million number and also felt that it was a figure that was somewhat grabbed out of the air. “But I would be really concerned about not supporting the Short-Term Community support, particularly for not profits who have suffered pretty dramatically through this Covid crisis for funding and support for the things that they do for our community. So, if the amendment had just been to address the $2 million for the broadband I might vote differently, but because we’re looking at those three items, I would encourage my colleagues not to vote for the amendment.”

Alderperson Kristin Alfheim (District 11) said she understood the question from Alderperson Doran regarding the $2 million earmark. She disagreed with taking out the short-term support for non-profits. She thought they were hit harder than the businesses and the city needed to continue to help with what they could. However, she would support potentially allocating less for the library broadband and suggested bringing it down to $1 million while setting aside the other half. If they needed the dollars they would still be there or they could be used on another project.

Alderperson Nate Wolff (District 12) asked a clarifying question. His understanding was that the $2 million figure was chose to make sure they had enough, but if they had any left over, they could allocate it for something else.

Mayor Woodford answered that the funds, if they were designated in the way that was before the Council, would need to be used for that specific purpose and if there were excess funds, those excess funds would need to go through an allocation process to be managed. If the $2 million ended up being too much, the remainder would have to be sorted out by the Council with future discussion and approval.

Alderperson Wolff said, “Basically, what you’re saying is that if these numbers are too high, we will still have that money to work with later and we’re not necessarily losing it. More like put it in another budget.” He understood some of his colleagues’ concerns, but the money would still be able to be allocated toward other projects if they weren’t used up.

Alderperson Brad Firkus (District 3) acknowledged that, regarding the broadband and information infrastructure planning, “$2 million does feel like a lot and because of where we are in the library planning, we don’t have a firm idea of what we need,” but setting up this infrastructure at the library was going to be a lot more expensive than setting up a computer and network at home. They would be looking at enterprise quality equipment which was going to be much more expensive than what they were used to thinking about regarding computers and networks. He thought having $2 million as a placeholder was a good idea because it was better to have that money declared and not need it all than to be working from the other way around.

Alderperson Alfheim wanted to know if the $2 million that was listed for the library broadband was in addition to the amount that was already listed in the city’s capital expenditures for the project or if it would be in place of money that was designated for the project.

Mayor Woodford answered that at this phase of cost estimation they had not determined the total project cost. Regarding the $2 million, it was “not yet determined in terms of whether it would reduce the $26.4 million that was allocated for the project or that is recommended for allocation for the project. It’s not yet been determined whether that would reduce that borrowing or if…it would be applied on top to make sure that the project can be executed to the level that we expect.”

Alderperson Alfheim asked when that would be decided. She thought it was a valid question to ask who would be determining and when it would be decided whether the $2 million would be in addition to the $26.4 or reduction from the $26.4.

Mayor Woodford replied, “At this point that process has not yet been determined.”

[Who wants to place bets that the $2 million will be on top of the $26.4 and won’t reduce the overall cost of the library to taxpayers?]

Alderperson Katie Van Zeeland (District 5) wanted to address the Short-Term Direct Community Partner Support. She thought it was important that they talk about what that was. It was not just handing off money to community partners. The community partners were handling things that would otherwise fall on the city—typically the police and fire departments—to respond to. She thought the allocation was a very small investment to take care of issues that the city would be paying for anyway.

Regarding the Consulting and Administration Support, she thought that was really important because the emphasis was on community participation and transparency in the distribution of the funding. Accuracy that was necessary for the city to report on the use of ARPA funding, quantify what they were doing with it, and make sure that those uses fit within the guidelines.

There was no further discussion on the motion to amend, and the Council voted. The amendment failed 13-2 with Alderpersons Doran and Joe Martin (District 4) being the two voting in favor of it.

The Council then returned to discussing the original, unamended item.

Alderperson Schultz asked if they could get a sense from staff on how the $250,000 number for the Short-Term Direct Community Support was arrived at? What were the metrics used to determine that number vs the Consulting and Administrative Support number?

Mayor Woodford answered that the numbers recommended in the in the allocation were their best estimate in terms of the needs in the community. If they tallied up all the immediate needs of all the organizations in the community, they would easily exceed even the $14.9 million that the city is receiving. The $250,000 was not a particularly magic number and was put in to have a conversation with the Council and the community.

Regarding the $150,000 for Consulting and Administration Support, the reason for the recommendations to be separated in this way is that they need significant additional community input and process development related to the allocation of the remaining $8 million that is in the 2022 executive budget and service plan. He said that the city didn’t have the staff resources to manage that process. The $150,000 might not be sufficient for the consulting resources required. On the other hand, it maybe be more than is needed, in which case any excess would be brought back to the Council for further discussion.

Alderperson Doran thought that a lot of the points the mayor made were reasons that he had some concerns with some of these items. The $250,000 was not a concrete number for anything in particular. Yes, the community groups have needs, and yes, they do great things in our community, but it concerned him to be putting money out there without a concrete, crystal clear plan for how it would be spent. He thought they really owed it to the community members to be intentional about how they spent tax dollars.

Regarding the Consulting and Administration fee, he said “we’re looking at spending money to help us spend money, and I think we really need to be careful about that.” He was concerned that some of the programs they were looking at in the future would require them to hire more consultants. “So, we could end up spending several hundred thousand dollars of this money on consulting just to help us dole out this money, and I think there are better ways for us to spend this money in more concrete ways.”

He thought one program that would be a worthwhile use of the funds was the computer replacement program for the IT Department that they discussed during Budget Saturday. The city was trying to get on a 3-year cycle to replace all of the computers for city staff, but they were looking at 5 or 6 years right now. He suggested that was a more concrete thing on which they could spend the ARPA money.

He finished up by saying, “I think we really need to be very careful about where we’re putting these resources to best utilize the money that we have in this opportunity.”

Alderperson Wolff said he liked that the proposal before them had constituent input and non-profit input. “I have ideas for this ARPA money as well that aren’t in here, but I know that the community input is more important than my personal opinion.” He did pitch his idea to his constituents and they did not reach out about it, so he was supporting the allocations as presented mainly because his idea wasn’t popular enough to have made it into the allocation through community feedback.

Alderperson Meltzer believed that there was a plan for how the direct community partner support allocation would be spent. “Our community partners have needs as we’ve already talked about. They have a lot of needs. We can’t meet all of their needs, but we have a plan which is to let this small amount of money be available right now for them to be able to use right away because these organizations are hurting and they can use help as soon as they can get it. And what we do with phase 2 is going to require a lot more talking and planning and deliberation, but this is money that we can make available right away. And the plan is for these organizations to apply based on their own needs, which they are very crystal clear about. So, I don’t think this is just a vague nebulous pot of ‘we don’t know what’s gonna happen with it.’ We know that our community partners are going to apply to use it and they will use it for their missions and they will use it to mitigate some of the burdens that they are facing right now in addressing the immediate crisis in our community.”

Mayor Woodford noted as a point of clarification that, regarding the Short-Term Direct community Partner Support, the memo stated, “This support will focus on not-for-profit organizations that bolster the local economy, community wellness, and pandemic recovery. Development of a simple grant application and compliance criteria will be necessary for this allocation”

Alderperson Hartzheim said her greatest concern was with the $150,000 consulting fees. “It’s been the experience of human nature that if we set a limit of $150,000 we’re gonna spend $150,000.” She thought they needed to be cognizant of whether that number might be pushing the boundaries a little too hard. She was interested in hearing the thoughts of other alderpersons regarding the Consulting Services dollar figure.

Alderperson Joe Prohaska (District 14) asked to call the question. It was not a debatable motion and required a 2/3 vote to pass. It failed. So, the Council resumed discussing the proposed 2021 ARPA Allocations.

Alderperson Firkus said that, regarding the $150,000 Consulting and Administration allocation, he didn’t think that they were spending money to figure out how to spend money. Rather, they would be paying for services. Whoever the city hired would be making sure that when the city does spend that other money that it was done in a responsible way. People don’t think about hiring a general contractor to remodel their kitchen as spending money to spend money on a kitchen project. Rather, they think of it as buying a service and bringing in someone who can help them do the project the right way instead of buying a bunch of cabinets and appliances on their own and then not installing and assembling them correctly. He thought the Consulting and Administration Support was important in order to make sure that the city handled the funds, which were very substantial, in the correct and responsible way.

Mayor Woodford reminded everyone that the funds would be managed within city policy on procurement and contracting, so ordinary city policies would be followed in the use of any of these funds. [I took that to mean that whatever company they hired to provide consulting and administration support would be vetted by staff per city policy and the contract would come before the appropriate committee before being voted on by the Common Council. Likewise, any grants provided to community nonprofits would come before a committee and also be voted on by the full Council.]

Alderperson Denise Fenton pointed out that the interim rule regarding the use of ARPA funds was 151 pages long. City staff was smart and dedicated, but this was a brand-new thing and the city had to submit to very stringent reporting requirements on the use of those funds. Just like they hire an auditor to make sure their financial records are as they should be, hiring a consultant to make sure they were handling these funds properly made sense. [I suppose that’s the same reason that many people choose to hire someone to do their taxes, particularly if their taxes are more complicated than having to enter a couple W-2s and 1099s.]

Alderperson Alfheim said it was expensive to be transparent. They have to document more, release more information, ask more questions, and bring in more involvement. She appreciated that the $150,000 was taxpayer dollars, but it was a small amount wen compared to the overall $8 million it would be supporting. She thought that if they didn’t set aside the dollars for the Consulting and Administration Support that they would have to do it in house which mean they would have to bring in staff or pay overtime to get it done because city staff was stretched as it was. One way or the other, administering the ARPA funds was going to cost the city money. She was not opposed to using this small portion to help make sure that the rest of the money was handled legally and transparently.

Alderperson Van Zeeland agreed with Alderperson Alfheim and also wanted to point out that any contract that the city was signing off on in regard to the use of these funds would still go through the committee process for approval.

Mayor Woodford confirmed that was the case.

Alderperson Van Zeeland concluded that this was not the last time the Council would have a say in this money. This was an allocation to start the process and they were free to make changes as they proceeded.

Alderperson Miayoua Thao (District 7) voiced her support for the allocation. She agreed that they needed to follow the rules from the federal government on using the funds, and she strongly agreed that staff and the community had worked hard to tell the Council what they needed.

Alderperson Hartzheim asked to call the question. This time the motion passed.

The Council voted 14-1 to approve the 2021 ARPA allocations and the associated 2021 budget allocations. Alderperson Doran was the nay vote.

[I can’t say I have strong feelings about the allocations. I’m kind of jaded on the ability of government at any level to be fiscally responsible and keep costs down. My expectation is that Appleton is going to exceed the $26.4 million library project budget and that it’s going to spend more that $2 million for library broadband, but that’s not based on anything other than being very jaded. I do hope that whatever the grant process ends up being for the disbursing of the Short-Term Direct Community Partner Support that it will require very clear accounting as to how those funds will be used by those organizations and how much economic benefit it will bring to the Appleton community as a whole.]

View full meeting details here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=886961&GUID=0A0DB456-0029-4C49-93A4-CE5E1993B8F3