The Yelm City Council voted to approve the city’s receipt of its portion of the $362 billion American Rescue Plan Act (ARPA) funds at its Oct. 26 council meeting.

President Joe Biden signed ARPA into law on March 1, allocating the funds to state and local governments to help with the toll caused by COVID-19.

The city will receive two payments, separated by a year, each of $1,320,188.67.

“Our share originally was lower,” said Yelm City Administrator Michael Grayum at the meeting. “What happened was a few cities opted out. … Those funds were then given back to the department of commerce and it was redistributed, reallocated.”

The funds must be used by Dec. 31, 2026, for city investments made between March 3 and Dec. 31, 2024.

Councilmembers Holly Smith, Molly Carmody, Terry Kaminski, EJ Curry, Terry Wood and Joe DePinto voted in favor of receiving the funds.

During discussion of the measure, Smith said the federal government has already allocated the funds, and noted that if the city does not decide to use them, they would be reallocated to other municipalities.

“Initially, I was going to vote no on this,” Smith said. “And after learning more about it, I’m probably going to change my vote. And I think one thing that really helped me … is that the debt is already there. The $362 billion is already allocated, and if we don’t take it, somebody else is going to take it.”

Smith noted the debt in the country as outrageous and she said she’s not a fan of government handouts, but voted in favor of accepting the funds since the money would be allocated elsewhere if the city didn’t accept it.

Councilor James Blair was the only opposing vote, spurred on by two public commenters who agreed with his position.

“For me, it comes down to principle,” Blair said. “I don’t want anything to do with spending this money. And I’m probably going to be the unpopular opinion here, but it’s just that (there’s) more and more debt and it keeps piling on. And I cannot, in good conscience, agree to taking it, whether it’s already there or not. I can’t vote yes on it.”

Grayum detailed possible ways the city could spend the funds, though no action was taken on a potential plan since Yelm has until 2024 to decide how to use the money.

The funds must be used in any of five categories: To aid in public health expenditures; to address negative economic impacts caused by the public health emergency; to replace lost revenue by the public sector; to provide premium pay for essential workers; or to invest in infrastructure.

“When we were looking at developing a recommendation for council, one of the things we looked at to use this money was being mindful of what our highest priorities are,” Grayum said.

He added those priorities include items the city already plans to spend money on in the coming years.

Grayum said the three categories city staff recommend for the potential uses of the funds include infrastructure, public safety and COVID-19 mitigation efforts.

For infrastructure, city staff recommended the council use the funds to pay off the assessments on the 640 acres it acquired around 2018, which is part of the Killion Road Local Improvement District (LID) passed in 2006.

“Paying the assessments off on the 640 acres would allow us to own the property free and clear,” Grayum said.

He added once the city owns the 640 acres, it could then utilize the land at the council’s discretion as long as the land’s use is consistent with the city’s comprehensive and transportation plans.

Grayum explained the city can use the funds to purchase the land in the infrastructure category because the original plan marked the land for a master-planned community.

“The reason why it’s appropriate to use it under the infrastructure aspect of it, is because in order to do anything with it, we know there will be requirements for water, sewer, roads — infrastructure,” Grayum said. “The first step is to own the land free and clear.”

For public safety, city staff recommended the purchase of cameras for law enforcement as required by state law.

“It would also protect our officers and the residents with body cameras and car cameras, which would provide greater transparency in law enforcement,” Grayum said.

For COVID-19 mitigation, city staff recommended replacing the money the city has spent from the equipment rental and replacement fund, Grayum said. The money was used by the city to invest in the remote technology needed for the hybrid environment the city is operating under because of the COVID-19 pandemic.

Grayum noted that after making all three of those investments, there would be upwards of $1.4 million left over for use at the council’s discretion over two years.

The surplus would occur because of the city funds already allocated to pay off the assessments and through the money other contributors to the Killion Road LID are scheduled to pay, which would go directly to the city after the assessments are paid off.

There was some discussion as to whether the city should accept the other parties’ payments, but Grayum explained that everyone has to stay on their own payment schedule for the Killion Road LID, even if the city pays off the assessments, or else it would be considered an unlawful gift of public funds.

It was also noted that the receipt of the ARPA funds are not tied to Gov. Jay Inslee’s proclamations or vaccination mandates.

Also at the meeting, Yelm Finance Director Stephanie Dice presented on the possible action the city council could take to increase the property tax levy in 2022 by 1%, as allowed for by law.

If the city were to take the 1% increase, the tax rate would be $1.29 per $1,000 of assessed property value, which equals $392.62 over one year for a home of median value at $304,617. The tax rate without the 1% increase would be $1.276 per $1,000 of assessed property value, or $388.69 over one year for a home of median value.

The 1% increase, Dice noted, would impact a taxpayer with a home of median value by $3.96 per year or 33 cents per month.

Dice said she expects the assessment numbers to change before the end of the year and will keep the council abreast of any new information.

“I’m a hard no on taking the 1% increase,” Blair said. “I don’t know how everyone else feels, but … just on the assessed values alone, people are getting hit with a 16% increase. That’s huge. So if us not taking the 1% helps out a little bit, I don’t think we should do it.”

Public hearings on the potential increase are scheduled for Nov. 9 and Nov. 23.

Dice also presented the required mid-biennium budget amendment ordinance the council must pass at upcoming meetings.

The council is required to pass an ordinance even if no changes are made.

She said the city will propose an amendment at future meetings to reflect the addition of the ARPA grant funds to the budget as well as estimates for salary and benefit changes, along with other items that have to do with capital projects.