Not Without Debate, City Council Approves Allocation of $25 Million in American Rescue Plan Act Funds

Despite opposition from some members of the public, the City Council has approved the proposed allocation of $25.235 million American Rescue Plan Act (ARPA) funds to offset losses in revenues and maintain necessary services negatively affected by the pandemic.

The recommendation to approve the proposed amendments to the 2022 Operating and Capital Improvement Budgets passed the Council via a vote of 6-1 on Monday. The negative vote was from Councilmember John Kennedy.
ARPA is a $1.9 trillion economic stimulus bill signed into law in March 2021. Under the law, the city of Pasadena will receive direct local stimulus amounting to $52,625,975, with the first 50 percent of the allocation paid to the city in June 2021 and the balance in June 2022.

According to the staff proposal, nearly one-third of the half of the ARPA funds or $9.8 million will go to the General Fund to offset revenue shortfall due to the pandemic, maintain essential services, and eliminate the projected operating deficit for 2022.

The bulk of the funding will be allocated for Capital Improvement Program (CIP) projects for improvement of sidewalks, traffic signals, bridges and fire stations.

Specifically, Matthew Hawkesworth, Director of Finance said $8.539 million of the funding will be allocated for the annual ADA Sidewalk and Curb Ramp Improvements, traffic signals and bridge enhancements; $400,000 will be allocated for Fire Station 37 seismic upgrades; and $2.0 million will go for necessary improvements in Fire Station 38.

Hawkesworth said construction of some of these projects was halted due to revenue losses brought about by the pandemic.

Of the total ARPA allocations for 2021, Hawkesworth said $630,000 will be appropriated to the Housing Department’s operating budget to support the bridge housing program for Pasadena City College students, the addition of a second HOPE Team case manager from Union Station and to fund additional eviction prevention legal services through the Housing Rights Center.

There will also be an allocation of $200,000 for the City Manager Office’s budget for efforts to prevent community violence and $925,000 to cover the anticipated cost of COVID-19 testing for unvaccinated employees, in accordance with the City’s new mandatory vaccine policy.

The City Council received at least 29 letters in opposition to the recommendation on the use of ARPA funds.

Local resident Elizabeth Elder said in a public comment that according to Congress, ARPA funds are intended to be used to provide food, rent and job training assistance to households impacted by the pandemic.

She said using the funds to repair sidewalks and traffic lights will be an “unacceptable misappropriation” as this would go contrary to the intentions of Congress and would ignore the urgent needs of the community.

Pasadena resident Sonja Berndt, for her part, questioned the recommendation to allocate $9.8 million to the General Fund to address budget shortfall and the miniscule allocation for social programs for the poor and marginalized.

Berndt called for the rejection of the recommendations by the City Council, as she said that the communities will see little benefit from the “imprudent” and “inequitable” allocations.

Michelle White from Affordable Housing Services, a nonprofit organization, said the staff recommendations do little to address the need of the City’s renters who have lost their income and are at risk of facing eviction in September.

According to White, the Eviction Defense Network estimates that 500,000 Los Angeles County tenants are behind on their rent and soon will face eviction as the federal and state moratoria are again about to expire.

“The staff’s proposal prioritizes the City’s routine General Fund obligations over the critical needs of its most vulnerable citizenry,” she said.

During the meeting, Councilmember Kennedy has asked the Council to consider providing robust allocations for emergency rental assistance programs and housing projects. Specifically, he asked the council to allocate $6 million of ARPA funds for Heritage Square South, a housing facility for homeless senior citizens in his district.

Councilmember Steve Madison expressed concerns about Kennedy’s suggestions.

“That is concerning also because I did not hear where that money would come out of and I think all of us as councilmembers have an obligation to act in the best interest of the city, not just our districts,” Madison said. “The staff has done a great job here trying to allocate these funds.”

According to the staff report, the city, including the Rose Bowl Operating Company (RBOC) and the Pasadena Center Operating Company, have lost a combined total of $96 million since the start of the COVID-19 pandemic in March last year.

In addition to the $96 million, the staff report also states that the City and its operating companies have expended roughly $39.6 million in pandemic response.

The staff report also states that the pandemic has exacerbated the financial condition of the RBOC, “necessitating the provision of $22.5 million from General Fund reserves to backstop the RBOC for Fiscal Year 2021 and Fiscal Year 2022, with additional support anticipated for the future.”