The Poulsbo City Council recently discussed possible uses for the $3.1 million in American Rescue Plan Act funds it is set to receive.

The city was initially set to receive $2.43 million in ARPA funds through the state Department of Commerce but due to an additional contract the city is now eligible for more.

“The reason for that is that some cities that were set to be non-direct recipients were moved to be direct recipients and that took that pot of money and established it among all the other cities sharing it based on population,” said Deb Booher, city finance director.

The money will be dispersed in two installments through the U.S. Treasury, with one portion in 2021 and another in 2022. Some cities received their first installment in early May. Poulsbo is set to receive its installment June 28.

The city is looking into three ways to spend the funds.

The first is to restore city staff positions that were reduced due to departments closing or downsizing during COVID-19 – which is the reason for the ARPA funds. Positions that qualify include: accounting clerk, office clerk, park maintenance, police department and parks.

“These are positions that are directly attributable to ARPA money,” Poulsbo Mayor Becky Erickson said. “We can replace these people and make the argument that they need to get back because of ARPA.”

In 2021 a total of $498,000 of ARPA funds would be spent to fill the positions and $505,000 in 2022.

Erickson other positions may not qualify, such as an administrator, engineering tech, planner, public information officer and prosecuting support. “These other positions may be general fund hits,” Erickson said.

If supported by ARPA thse positions would receive $195,000 in 2021 and $358,000 in 2022.

ARPA funds also may provide grants to nonprofits that were not eligible for state or federal assistance during the pandemic. They include groups like like the Historical Downtown Poulsbo Association, Poulsbo Chamber of Commerce, Poulsbo Historical Society, Kitsap Children’s Musical Theater, Jewelbox Theater and Poulsbo Community Orchestra.

“A good portion of our small business owners received idle loans, PPP’s, PPE’s a whole bunch of other grants through this period. These nonprofits didn’t. There was a late grant program that talked about performing arts but no nonprofit could apply for those grants, so places like the Jewelbox couldn’t take advantage of it,” Erickson said.

Each nonprofit would have money earmarked for them, with the chamber and HDPA receiving $100,000 and the remaining ones $25,000 each.

The third way the city would like to use these funds is to support local charities, such as Martha & Mary and Fishline. Initially, both would receive $50,000, but the council is further discussing giving $100,000 to Fishline, which would allow it to continue its works to help people pay their utility bills and find work.

That would leave roughly $1.5 million left to spend, which the council would like to use on infrastructure projects, such as sewer, road and street improvements, along with a reduction in utility taxes.

ARPA funds are part of the $350 billion relief package signed into law in March to help cities and states recover from the economic impacts of COVID. Covid-19 pandemic. The funds can be used in a variety of ways, from providing assistance to households, small businesses and nonprofits to aiding tourism and hospitality industries to improving infrastructure.

To receive the funds, the city needed to show how much it lost in revenue during 2020 and part of 2021 compared with previous years in order for the state to determine the amount of revenue replenishment. The city’s financial department reviewed four years of revenue to determine expected levels of growth. The minimum growth level supported by the U.S. Treasury is 4.1%. Poulsbo came in at close to 5%.

“So although we are looking at 2019 revenues, the government considers that those revenues should have been growing at an average growth rate,” Booher said. “For the city of Poulsbo, when I calculated those numbers, it leaves an annual reduction in revenues of our first year of about $675,000 of revenue compared to 2019.”