Members of the Little Rock Board of Directors on Tuesday heard a proposal for funding projects using the first half of direct aid from the federal American Rescue Plan Act.
Emily Jordan Cox, the city's director of strategic operations, presented the plan to allocate the initial $18.8 million tranche during a policy session on the campus of Philander Smith College.
Little Rock is expected to receive about $37.7 million from the package signed by President Joe Biden in March.
The city received the first half of the funding in May. The remaining half is expected to be disbursed in May next year.
Cox told board members that costs must be obligated by the end of 2024, and projects completed and paid for by the end of 2026.
Officials still are awaiting the final version of the formula for calculating the city's revenue loss, Cox said. However, she reported that based on an interim final rule from the federal government, the city's finance director was confident the proposed spending would fall under the revenue-loss threshold.
Under the plan unveiled Tuesday, the largest share of the first tranche, close to $6.8 million, would fund government services by replacing lost revenue. The category includes $2.2 million for Fire Department equipment and nearly $3.4 million for technology upgrades related to cybersecurity and information technology infrastructure.
It also includes $337,000 for broadband installation at the East Little Rock Community Center and placing internet hot spots in city parks.
Water, sewer and broadband infrastructure projects would receive roughly $3.7 million.
Public-health initiatives related to covid-19 would receive $2.35 million. According to Cox, $1.5 million of the sum would fund violence-intervention programs. Additionally, she said, $700,000 would fund vaccination incentives and communication efforts.
Projects meant to address the negative economic effects of the pandemic would receive $1.8 million.
The lion's share, or $1.5 million, would go toward affordable-housing investments and efforts to reduce homelessness.
Up to $3.2 million would fund premium pay or retention bonuses for certain city employees.
Cox proposed paying a $1,500 bonus to full-time employees on the job since at least July 1, and $750 for part-time workers employed since the same date. Seasonal part-time employees would not receive a bonus.
Finally, indirect costs related to administering the funding can encompass up to 10% of the city's funding, according to the federal government, Cox said. She explained that the city will seek to use 5.3% of its funding, or $1 million, to help implement it.
Cox said the intent is to prepare a resolution for adoption by the board next week.
Before Cox's presentation, Mayor Frank Scott Jr. emphasized that the proposed spending plan meets the compliance requirements of the federal legislation.
During the meeting, Vice Mayor Lance Hines said he took issue with spending $500,000 on water infrastructure belonging to the regional water utility Central Arkansas Water.
He argued the autonomous utility has the ability to fund its own capital needs.
"They should already be addressing this with the rate increases they've taken over the years and the surplus funds they have," Hines said.
Likewise, later in the meeting, Dean Kumpuris, city director at-large, questioned the allocation for Central Arkansas Water.
Scott implied the water utility had requested more than its proposed $500,000 allocation.
While he acknowledged Central Arkansas Water has its own budget, Scott said the intention with the first tranche was to "hit all cylinders of the advancement and the compliance of those dollars."
Nevertheless, Kumpuris asked whether Central Arkansas Water's other local partners had put "a penny" of their federal money into the utility.
According to the spending plan laid out by Cox, the Central Arkansas Water allocation was listed as funding lead-pipe replacement. However, Scott later had to correct that statement in response to a comment from City Director Kathy Webb of Ward 3.
The mayor clarified that the funding for the water utility would be used to replace aging galvanized pipes, not lead pipes.
In a phone interview Tuesday evening, Central Arkansas Water spokeswoman Chelsea Boozer said the utility does not have lead service lines.
"We're ahead of the game on that, so we have none in our service territory," she said.
Central Arkansas Water was not directly eligible for American Rescue Plan money and depends on allocations from the local governments it serves that received funding, Boozer said, namely Little Rock, North Little Rock and Pulaski County.
If Little Rock provides federal stimulus money to Central Arkansas Water, the utility would spend the money on pipe replacement within the city's boundaries, according to Boozer.
She said the utility did not request a direct amount of funding from Little Rock, but rather listed a series of projects and their costs.
At-large City Director Joan Adcock questioned why broadband access would be added to the East Little Rock Community Center, which she said "really is not having programs for children."
She also seemed to suggest the $60,000 for after-school programs allocated in the proposal was too little.
In response, City Manager Bruce Moore said broadband was one of the key categories among the recovery-package guidelines.
He indicated Prevention, Intervention and Treatment money would bolster funding for after-school programming.
In response to a question from at-large City Director Antwan Phillips, Moore said the idea was to get the board to endorse the overall list of projects funded using the first funding.
Each of the projects would then go before the board individually, Moore said.
A short while later, Moore said the funding allocated for violence prevention would try to address conflict resolution. Scott had raised the idea earlier this month of using a portion of the American Rescue Plan money for community violence intervention.
The policy discussion Tuesday was the first serious step Little Rock has taken toward allocating stimulus money, though officials already have fielded suggestions from department heads as well as from members of the city board on how to make use of the windfall.
In May, Cox quoted the Arkansas Municipal League when she described the aid process as "a marathon, not a sprint," and told board members that the Municipal League had advised local governments not to spend the money yet.
Government entities across Arkansas are expected to receive $2.6 billion, including nearly $1.6 billion to the state government.
A proposal on how to spend the federal funding recently moved ahead in North Little Rock.
The City Council on Monday approved a plan to use the first half of the city's anticipated $16.8 million on new initiatives and equipment, including a $1.6 million ladder truck for the Fire Department.