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Council Directs Initial American Rescue Plan Act Funds to Support Rent Abatement for City Tenants and Community Priorities

April 14, 2021 10:58 AM

Council Directs Initial American Rescue Plan Act Funds to Support Rent Abatement for City Tenants and Community Priorities

At its meeting last night, the Santa Monica City Council provided initial direction on how to allocate Santa Monica’s $29.3 million in Coronavirus State and Local Fiscal Recovery Funds provided through the American Rescue Plan (ARP).  Council directed stimulus funds to support community economic recovery, including recovery for City non-profit and Pier tenants, as well as to address homelessness and provide community services, including reopening City facilities and services when permitted by public health orders.  Additional direction will be provided when Council meets for its FY 2021-23 Biennial Budget Study Session on May 25.

In distributing Coronavirus State and Local Fiscal Recovery Funds, the Department of Treasury has sought to remedy the mismatch between local governments rising costs and falling revenues.  Last year, the City projected approximately $224 million in lost revenues to the City government as a result of the COVID-19 pandemic.  The City took swift action to address this last year, including cutting the City’s current operating budget by 20% (about $60 million) and its annual capital budget by more than half.  The $29.3 million received by the City in ARP Coronavirus State and Local Fiscal Recovery Funds, the City government recoups only a small fraction of its lost revenues.

In addition to the City’s $29.3 million in stimulus, Santa Monica residents and businesses will be bolstered by direct relief included in the $1.9 trillion American Rescue Plan. The Plan extends federal supplemental unemployment benefits, increases funding for the Paycheck Protection Program, provides funds for housing stabilization and to address homelessness, provides funds to help schools reopen safely, and offers relief to shuttered venues and cultural institutions, among other vital programs. The City is committed to supporting businesses in identifying and accessing available federal grants and other relief sources.

“Your Council and your City administration are focused on how to leverage the most good for the most hurting members of our community with the limited funds available, even with this very welcome stimulus,” said Mayor Sue Himmelrich. “We will use these funds to support our arts and culture organizations and small businesses in their recovery and will continue to focus limited resources on our three community priorities through the biennial budget.”

Council directed stimulus to the following areas aligned with the Council-adopted community priorities.

  • $5.86 million - Equitable and Inclusive Economic Recovery
    • Staff were directed to design a Rent Abatement Program for City tenants to provide nine months rent abatement for nonprofit City tenants; six months for small business tenants on Pier, Beach and other City property; and three to six months abatement to Bergamot and airport gallery tenants.  The program will require evidence of financial hardship, as well as enrollment in the El Camino College Small Business Development Center (SBDC) business support program, and will take into account whether tenants are able to access relief from other programs available from federal, State and County programs. This also includes a rent freeze for all City tenants in FY 2021-2022.
    • $237,700 for high season Pier Ambassadors and enhanced sweeping, trash, disinfection on the Pier and beach.
    • $255,000 for small business and events grants and support in 2020-2021.
    • As part of the FY 2021-23 Biennial Budget process, Council will consider how to program the remaining American Rescue Plan funds dedicated for economic recovery.
  • $6.6 million – Addressing Homelessness
    • $6.35 million to support affordable housing by enabling the General Fund to make the FY 2021-22 Measure GSH payment to the Affordable Housing Trust Fund.
    • A statement of intent that the General Fund will make the Measure GSH sales tax payment amount that was withheld from the Affordable Housing Trust Fund in FY 2020-21 as soon as it is able to.
    • $250,000 in one-time funds for immediate (FY 2020-2021) seed funds to support efforts to pursue non-congregate shelter and behavioral health priorities as part of Addressing Homelessness community priority.
  • $3.75 million Reopen City facilities and address community priorities
    • $3 million in ongoing costs, to be programmed as part of the FY 2021-23 proposed Biennial Budget, to reopen facilities and address community priorities in the next budget.  Examples of these are reopening libraries, funding a language justice program, restoring staffing for code enforcement, homelessness, and parking revenue compliance.
    • $750,000 in one-time funds for enhanced federal lobbying support, a limited-term park planner, the fire academy, and cybersecurity.
  • $5 million - Support the Beach and Pier Funds due to severe revenue loss in FY 2020-21 and to cover new federally- and State-mandated costs in the General Fund.

The proposed Biennial Budget will be published on May 10 at finance.smgov.net before a study session on May 25. 

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