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Lake Oswego City Council gives preference to areas for allocation of funding from the American Rescue Plan Act.

COURTESY PHOTO: CITY OF LAKE OSWEGO - The Lake Oswego City Council discussed how to allocate federal funds during the Sept. 9 meeting. At a meeting last week, the Lake Oswego City Council focused on three areas to allocate federal funds that are being distributed to local governments after unprecedented times during the pandemic.

During the Sept. 9 meeting, the council gave the nod to staff's recommendation to allocate American Rescue Plan Act funds to three of four categories: responding to the public health emergency and negative economic impacts, replacing lost revenue as a result of the pandemic and addressing water, sewer and broadband infrastructure.

ARPA, which was signed into law by President Joe Biden last March, allocated $1.9 trillion in relief funds to help states suffering negative economic and health impacts as a result of the pandemic.

Lake Oswego City Manager Martha Bennett said $350 billion was distributed to local governments throughout the country and Lake Oswego was allocated about $8.8 million to spend on four categories — the fourth being premium pay for employees under stress during the pandemic.

"We cannot spend the funds to do certain things," said Bennett, adding that they cannot choose to offset tax cuts, put the funds in reserve, pay off debt or legal settlement or match other grant programs, among other things.

The city received the first $4.4 million in late August and will request the second half of the distribution a year from then.

Staff recommended the bulk of the city's allocation go toward addressing the decline in general revenues, claiming it provided the most flexibility for use of ARPA funds.

There are certain caveats and calculations that estimate the city could allocate a total of about $7.1 million to replace lost revenue.

"Expenditures on transportation infrastructure, modernization of cybersecurity, health services, environmental remediation, school or educational services and the provision of public safety services are all qualified expenditures," read the staff report. "As Council is aware, the City has over $200 million in unfunded road, pedestrian and bicycle projects, and since this category of funds can be spent on transportation, staff recommends Council allocate all of the available $7 million as lost revenue to this category."

Bennett said the estimated $7 million is just a "drop in the bucket" of the city's unfunded needs.

Within that category, Bennett suggested the council prioritize funding to help with the design phase of the reconstruction of Lakeview Boulevard and implementation of a formal path, as well as street front improvements for the recreation and aquatics center and Habitat for Humanity's affordable housing project on Boones Ferry Road. The North Shore Bridge project could also be addressed using these funds.

The bridge has been closed due to structural issues in the nearby retaining wall.

"This was obviously a project we had not anticipated and is quite urgent to get completed to restore traffic flow to the neighborhood," Bennett said.

Bennett added that there are other unfunded projects that could be funded through ARPA, including the next phase of the Boones Ferry Road project and improvements in the McVey and Stafford Road area.

Bennett said the goal was not to choose specific projects at the Sept. 9 meeting and that staff would return with a proposed list of projects after learning more about how much the North Shore Bridge project would cost.

Bennett said the city should also reserve funds for projects that fall under the "negative economic impact" category.

Staff suggested the council set aside $600,000 for two grant programs spread over three fiscal years. There would be 60% dedicated to nonprofit organizations that support tourism in the city like hospitality, arts and culture. The other 40% would go toward nonprofits assisting residents with food, mental health, unemployment and the like.

If the council was in favor of this, a committee would be formed.

Staff recommended the council also allocate around $1 million to water, sewer and broadband, with most funds addressing the need for redundant power — like a generator — at the river intake and water treatment plant.

The council was in agreement with the selected categories and directed staff to return with a list of specific projects and dollar amounts.

Councilors also expressed favor toward allocating funds to safe routes to schools and pathways. Further, Mayor Joe Buck said he would like two council liaisons and a youth member to be included on the grant committee.

"I really appreciate the way this was laid out and how it aligns with council goals," Buck said.

The city has just over two years to figure out how to spend the funds and until Dec. 31, 2026, to actually spend the money.

For more information, read the city's staff report.

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