Elected leaders in Vancouver have the opposite of a problem.
As part of the American Rescue Plan Act, the city received $32.6 million in COVID-19 relief. The funds come with strings, but they’re long ones: Based on guidance issued by the U.S. Department of the Treasury, the multimillion-dollar allocation can be spent in many ways.
“It is written in a way where there is flexibility built in,” Vancouver City Manager Eric Holmes said.
Now, the city finds itself in the enviable position of determining how to get the most out of the windfall, a process that will begin in a city council workshop on Monday and likely continue through the rest of the year.
Guidance from the Department of the Treasury indicates that the money can go toward public health expenditures, raises for essential employees, grants for households or businesses that lost money during the pandemic, or backfilling missing public-sector revenue. The federal department also declared that the funding can be allocated to infrastructure projects like water, sewer and broadband facilities.
The overarching intent is to promote resiliency, Holmes said.
“(So) when the next shock comes, communities are better prepared,” Holmes said.
There’s one hard and fast rule: Funding from ARPA has to be committed no later than Dec. 31, 2024, and spent within two years after that.
According to Natasha Ramras, chief financial officer, Monday’s meeting will provide the city council with a first chance to review its options and discuss priorities.
“At this point no decisions on spending have been made,” Ramras said in an email. “Hopefully we can revisit this at the end of the year, which is our target date for presenting the spending plan to council based on the guidance they will provide this upcoming Monday.”
A memo from Holmes included in the meeting materials indicates that leaders will start the conversation with their “macro” policy framework, or their three predetermined guiding principles of climate action, equity and community safety. Spending will likely reflect those priorities.
“In addition to these macro policy themes, it will be important to consider the nexus between use of these federal funds and Vancouver’s recovery from the pandemic and our resulting resilience,” the memo states.
In uneven recovery
Despite the doom-and-gloom budgetary predictions issued last spring, Vancouver’s coffers are, for the most part, doing OK.
This year’s budget is 3.25 percent smaller than the previous year. Lost tax revenues from COVID-19 required a bit of belt-tightening, but it’s nowhere near the 40 percent loss in the annual general fund that early economic forecasts had foretold.
That the city’s budget emerged mostly unscathed means Vancouver’s decision-makers can invest strategically, instead of just stopping the bleeding.
“While segments of our community continue to feel negative impacts associated with the pandemic, these impacts are not as widespread or acute as anticipated earlier in the declared emergency. The recovery at a community and household level in Vancouver is generally stronger and faster than anticipated in 2020,” Holmes wrote.
“That said, the impacts through the pandemic —both through a public health and economic lens — have been disproportionate to communities of color and lower income.”
Holmes’ assertion was supported by a countywide report on housing instability issued in March by the Council for the Homeless.
The report indicated that while homelessness barely rose last year, a disproportionate number — around one-third — of unhoused families last year included members who are people of color. Households of people of color also made up more than half of those who sought rental assistance in 2020.
Senior citizens also bore the brunt of increased housing insecurity, the report found, especially those on fixed incomes.
Spending vs. investing
Vancouver isn’t alone with its influx of federal cash. As part of ARPA, municipalities, counties and tribes in Washington received a collective $2.66 billion, on top of the state government’s $4.25 billion. Nationwide, state and local governments are on track to receive $350 billion.
The sheer volume of dollars is sparking widespread discussion about how best to spend them. Writing for the Brookings Institution, a D.C.-based think tank, two city policy experts advocate for a long-haul philosophy.
“The decisions made in the coming weeks — and over the next year regarding the second tranche of funding — will determine whether cities merely enjoy a brief stimulus or seed a new trajectory of inclusive economic growth,” according to Brad Whitehead and Joseph Parilla, part of Brookings’ Metropolitan Policy Program team.
“The stakes are high. The money needs to move fast and be deployed smartly and equitably,” they said. “In 10 years, we may look back at this time and ask: Which places merely spent their money, and which places invested it?”