American Rescue Plan Rescues Martinez's Budget

Recent budget updates make clear that money received from the controversial 2021 federal economic stimulus has been key to helping the city weather stormy fiscal conditions and pay for pressing needs

The funds that Martinez received from the politically fraught 2021 American Rescue Plan Act (otherwise known as ARPA) are playing a key role in helping the city to weather a downturn in its fiscal fortunes, fund key initiatives and maintain a balanced budget.

That’s been the message conveyed by city leaders during relatively gloomy discussions on the budget in recent weeks. At the same time that the city is absorbing higher labor costs to try to hire and retain workers amid a staffing crisis that has impacted city services (particularly in the police department), tax revenues are largely flatlining as the city’s population (like most of the rest of the county) declines. Skyrocketing insurance costs are also pinching the city’s finances.

City Manager Michael Chandler summed up the situation during a budget recap at last week’s City Council meeting that followed an in-depth workshop on the city’s finances a week earlier.

“With the use of our strong General Fund reserves, and also the benefit of the American Rescue Plan Act funding, the federal funds we received, we’re able to balance the budget, but it was really, really challenging,” he told the council. “It took quite a long time to get there.”

Without ARPA, the city quite well might still be trying. Money from ARPA has gone toward everything from water main replacements, to the planning of the city’s new pickleball courts at Hidden Valley Park and a new park at Pine Meadow, to roof repairs and technology upgrades at City Hall. As many cities scrap their Fourth of July fireworks displays because of budget challenges, Martinez will be tapping $74,000 from its remaining ARPA funds to light up the sky over the waterfront next month.

In the big picture, the city is anticipating expenditures in the 2023-24 fiscal year (including use of ARPA funds) to total $37.2 million against revenues of $35.9 million. In 2024-25, those numbers are projected to come in at around $36.6 million in both expenditures and revenues (though a lot can change financially between now and then).

As a city budget staff report detailed, Martinez plans to tap $1.21 million in reserves from its General Fund and ARPA to meet all its needs in the next fiscal year, which begins July 1. It is also requesting $1.25 million in ARPA funds for one-time expenditures for the General Fund, which would leave it with roughly $1.34 million in remaining ARPA funds at its disposal at the end of the 2023-24 fiscal year.

As many know, ARPA has been a political football since it was passed early in President Joe Biden’s term to “rescue” the economy and cash-strapped Americans from the ravages of the pandemic, while also funneling billions of dollars to local governments to meet their needs. Democrats and liberals have championed the $1.9 trillion economic stimulus as playing a key role in mitigating the economic pain from the pandemic and paving the way for a rapid recovery and stunning job growth. Republicans and conservatives have pegged it for contributing to the runaway inflation that has dominated the economic news of the past two years and argued that it was a poster child for government waste.

Historians and economists will ultimately have the final say on whether ARPA was a legislative godsend, a boondoggle, or something in between, but for those managing Martinez’s budget, it’s a gift horse they’re not about to look in the mouth during these tough fiscal times.

And when the ARPA well runs dry? “Once ARPA funding is no longer available, the city’s fiscal condition will become increasingly more challenging,” the city says in its budget report. “The city will have to be extremely judicious in its funding decisions to weather the fiscal challenges ahead.”

The charts below list what Martinez has done so far and is planning to do with the $9.16 million in ARPA funds it received (I’m particularly looking forward to the $300,000 that will go to resurface the basketball courts at my neighborhood park, Mountain View, which currently look as though the San Andreas Fault has torn through them).

For those who may have forgotten, or weren’t paying attention, ARPA was passed in Congress exclusively by Democrats (every Republican in the House and Senate voted against it). As the charts above show, a chunk of the money has gone toward public safety and policing services such as a police assistant position and updated mobile data terminals for officers— not exactly in line with the narrative by Republicans of a political party they often accuse of wanting to “defund the police.”

County wants chunk of Tesoro refinery penalty

John Gioia, chair of the Contra Costa County Board of Supervisors and a board member of the Bay Area Air Quality Management District (BAAQMD), recently sent a letter to the U.S. Department of Justice requesting that at least 40 percent of a recent penalty against Tesoro Refining & Marketing Co. be used for local health initiatives.

In April, the DOJ and U.S. Environmental Protection Agency penalized Tesoro $27.5 million for violating a previous court order requiring it to reduce air pollution at its “Golden Eagle” petroleum refinery on Solano Way between Martinez and Concord. According to the settlement, Tesoro failed to limit air emissions of nitrogen oxides, a pollutant that contributes to smog and particulate matter.

“Front line communities near the refinery are disproportionately impacted by many sources of air pollution and deserve to receive greater benefits from the assessed penalty,” Gioia said in a news release announcing the letter. “Our proposed plan will not only help reduce the health inequities caused by this pollution but will also help build resilience to the disproportionately greater impacts that climate change is having on these vulnerable populations.”

The joint funding proposals supported by Contra Costa County and BAAQMD include:

• Expanding the In-home Asthma Mitigation and Energy Efficiency Program: Supports conducting asthma trigger and energy efficiency assessments and improvements for Contra Costa Health Plan MediCal clients:

• Distributing portable air purifiers to homes: Supports the distribution of portable home air purifiers and replaceable filters through two asthma mitigation programs and the Public Health Nursing program;

• Installing HVAC systems and extend county library hours to serve as cooling centers: Supports upgrading HVAC systems to provide cleaner air and extending library hours in target communities where residents could go during poor air quality incidents, such as wildfire smoke events;

• Installing HVAC systems and portable air purifiers in schools: Supports expanding the number of school districts surrounding and downwind of the refinery that receive air purifiers;

• Sheltering unhoused during extreme weather events, industrial fires or releases: Supports offering hotel vouchers to the unhoused population during a short-term incident that impacts air quality. This could include providing necessities such as transportation and staffing costs, as well as relocate an unhoused encampment downwind of a known hazardous material facility that could impact the health of residents if a release occurs;

• Strengthening community outreach for air quality and hazardous materials awareness and response to releases: Supports community outreach efforts to educate the community regarding hazardous materials incidents, including signing up for alerts;

• Supporting the Air District and Contra Costa Health with equipment or training: Supports funding related to regulatory topics, responding to hazardous materials incidents, communications training, technical trainings, and environmental enforcement trainings.

Now owned by Marathon Petroleum, the Golden Eagle refinery suspended operations in 2020 and is being converted into a renewable fuels manufacturing and terminal facility (dubbed the Martinez Renewable Fuels Project) that will be able to produce approximately 730 million gallons of renewable fuels per year.

According to Gioia: “The project is under construction now and is producing a small amount of renewable fuels now.”