Mountain View city officials are laying out a spending plan for close to $15 million in extra cash from this year's federal stimulus, earmarking funds for rent relief, unpaid utility bills and homeless services.
The $1.9 trillion funding package, the American Rescue Plan Act, was approved last month and provides $65 billion to cities grappling with higher costs and sinking tax revenue. Under the framework of the bill, Mountain View is expected to get $14.8 million over the next two years.
Though the money can be used to replace lost revenue due to COVID-19, the city has made it through the worst of the pandemic with the budget in relatively good shape. Instead, city staff are looking to pour the money into social services, tech upgrades at city hall and more funding for nonprofits supporting residents through the crisis.
The first half of the funding is expected to be received in the coming months, and must be fully spent by 2024. The federal legislation is flexible about how the money can be spent, including backfilling lower tax revenue over the last year. The spending doesn't even need to be directly related to COVID-19, and can be used to pay for water, sewer and broadband infrastructure.
City officials have come up with a $4.4 million spending plan so far, with a heavy focus on residents and businesses in desperate financial straits. The plan includes $1 million in extra funding for the city's rent relief program, which is run by the nonprofit Community Services Agency and pays the rent for tenants who have lost work during the pandemic.
Another $750,000 would be spent forgiving unpaid utility bills for residents and small businesses who have fallen behind on payments during COVID-19, and $250,000 would be spent bolstering the city's safe parking program and homeless services.
With working from home now becoming the norm -- at least for now -- Mountain View is also looking to spend $1 million on tech upgrades and new equipment to support teleworking and virtual meetings. In order to support in-person services again, another $600,000 would be spent on health and safety changes to city facilities in order to safely reopen to the public.
A smaller portion of the money, $200,000 has been earmarked for "economic vitality" efforts, in hopes of supporting local businesses that have struggled through the pandemic. Bolstering the support would be $135,000 in grants to small businesses.
The $4.4 million funding strategy is scheduled to be discussed at the Mountain View City Council meeting Tuesday night.
The budget forecast for the city has brightened since February, when the city was projected to have $1.5 million in deficit spending this year. The latest estimates paint a precariously balanced general fund budget of just over $141 million. Sales tax revenue continues to fall, dropping $500,000 less than previously expected, but it's been more than offset by a $700,000 boost in property taxes.
A positive note is that the city is expected to pocket an extra $400,000 in service fees, thanks to lightened public health restrictions and higher-than-anticipated registration for spring and summer recreation programs.
The biggest factor in balancing the budget has been a combination of work reductions and unfilled city positions, which led the city to scrimp and save a grand total of $6.5 million over the original 2020-21 budget.
The cost-cutting measures are less severe than neighboring Palo Alto, which at one time faced a $40 million deficit and slashed more than 80 full-time positions, and a far cry from the $205 million deficit projected for Santa Clara County even after job cuts.
The full spending plan for the first $4.4 million in relief funds are below, and subject to change at the April 27 council meeting:
• Rent relief program - $1,000,000
• Technology equipment, hardware, and IT contracts to support online services/remote work/Zoom conference rooms/hybrid meetings - $1,000,000
• Unpaid utility bills for residents/small business - $750,000
• Safe parking and homelessness services - $250,000
• Economic vitality strategy - $200,000
• Small business grants of $5,000 provided to businesses - $135,000
• Nonprofit funding gap from CDBG/GF NOFA process - $117,000
• Transit Center Master Plan - $100,000
• CHAC one-time funding for mental health programs - $100,000
• Castro Streats program aesthetic improvements - $60,000
• Contract services/PPE/facility improvements related to reopening city buildings and implementing required health and safety changes $600,000
• Anti-displacement strategy consultant - $50,000