FIN 2021-04-26 Item 1C - Discussion - Prioritizing Service Level Increases

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INFORMATIONAL MEMO Page 4 revenue losses. There is an effort to add funding to the supplemental budget to replace funding lost during the current state fiscal year, which would result in Tukwila receiving just under $900,000 on May 1, 2021 if the effort is successful. While previously the SST funds were dedicated to the Public Safety Plan, staff removed that funding source from the plan when the Governor vetoed SST in 2020. HB 1521 passed and was signed by the Governor and will go into effect July 1, 2021. The initial amount for the City would be just over $880k and would be decreased by 20% each year on July 1. The funding expires on July 1, 2026. Payments would be quarterly and we could expect, to receive the first payment on July 1 of this year. What is unclear at this writing is whether the supplemental budget will include funding for the lost SST mitigation payments in FYI 21, though staff and our state lobbyist remain hopeful this will happen. With the session expected to end on April 25, staff will bring updates to this information at the Committee meeting. Federal Funding - American Rescue Plan On March 10, 2021, a $1.9 trillion relief package, known as the American Rescue Plan, was approved and provides funding in several areas including state and local aid, education, rental assistance, and transit. At this time, it appears that the City of Tukwila will receive $4.43 million in one-time funds. It appears that half of the funds would be distributed 60 days after enactment and the remaining balance one year later. Because we are considered a nonentitlement city, we will receive the funds from the State rather than the federal government. It is unclear how quickly the State will release the funds to the City. Funds must be spent by December 31, 2024. These funds are not reimbursement for COVID-related costs, and therefore can be used in a variety of ways. From what we know today, the funds can be used in the following ways: - To respond to the public health emergency with respect to COVID-19 or its negative economic impacts, including assistance to households, small businesses, and non -profits, or to aid impacted industries such as tourism, travel, and hospitality. - Provide premium pay to eligible workers that are preforming essential work. - Provision of government services to the extent of the reduction in revenue due to the pandemic relative to revenues collected in the most recent full fiscal year. - Make necessary investments in water, sewer, or broadband infrastructure. The funds cannot be used to directly or indirectly offset tax reductions or delay a tax/tax increase. Nor can funds be deposited into any pension fund. As new information becomes available, updated information will be provided. Other Funding for the Tukwila Community On February 19, 2021 Governor Inslee signed the state COVID relief bill that provides $2.2 billion in funding that has the opportunity to assist the Tukwila community, including: • $714 million in assistance for K-12 schools • $618 million for public health's response to COVID, including testing, investigation and contact tracing; and funding for vaccination efforts 50