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Receive a presentation providing a progress update on projects funded with Solano County American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds (SLFRF); Consider providing further direction and take possible action on the reallocation of $7,116,747 in ARPA SLFRF; and Delegate authority to the County administrator to sign amendments and other contractual agreements related to the reallocations
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Published Notice Required? Yes_______ No___X___
Public Hearing Required? Yes_______ No ___X___
DEPARTMENTAL RECOMMENDATION:
The County Administrator’s Office (CAO) recommends the Board of Supervisors:
1. Receive a presentation providing a progress update on projects funded with Solano County American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds (SLFRF);
2. Consider providing further direction and take possible action on the reallocation of $7,116,747 in ARPA SLFRF; and
3. Delegate authority to the County administrator to sign amendments and other contractual agreements related to the reallocations.
SUMMARY:
Solano County received a direct federal funding allocation under the ARPA SLFRF program of $86,949,405. These funds are intended to provide support to the County in responding to the economic and public health impacts of COVID-19 and impacts on our communities, residents, and businesses. The Board of Supervisors has had multiple discussions on ARPA guidelines, received significant public input, and in March 2023 the Board of Supervisors completed its initial allocation of project funding for the full amount.
Since that time, staff have continued to monitor ARPA projects and provided updates to the Board of Supervisors. Through the monitoring process, staff have identified some projects which completed under budget, and a limited number of other projects which were determined as not feasible to move forward with ARPA funding. On November 7, 2023, February 6, 2024 and May 7, 2024 the Board considered and/or approved reallocations related to these identified projects.
As of May 7, 2024, the total remaining funding available for reallocation was $2,016,747. At that time, the Board directed staff to continue monitoring ARPA project status to ensure full obligation of ARPA funding by the December 31, 2024 deadline. The Board also directed staff return with reallocation options in the following areas: Revenue Replacement, Early Learning Center, radio interoperability, homeless prevention, and releasing a Request for Qualifications (RFQ) to identify projects which may be implemented by nonprofit organizations.
In monitoring projects with unobligated funds, staff have been in communication with the City of Fairfield regarding the Tabor Commons low-income housing project. At this time, the City and the developer have not secured the remaining funds to implement the project, putting the $5.1 million the Board previously allocated toward the project at risk of not meeting ARPA expenditure deadlines. Staff are therefore recommending the Board consider reallocating the $5.1 million to alternate projects to ensure funds are obligated and expended within the ARPA required timelines. As a result, the total amount of ARPA funds available for reallocation is $7,116,747, which includes the previously identified $2,016,747 available for reallocation.
Staff will provide a presentation covering ARPA project updates and will discuss possible options for reallocation of ARPA SLFRF funding.
FINANCIAL IMPACT:
Solano County received a direct federal funding allocation of $86,949,405 under the ARPA SLFRF program which was initially fully allocated by the Board of Supervisors in March 2023. This item provides an opportunity to for the Board to reallocate funds which have been identified as unspent in the original allocation. There is no impact to the County General Fund.
DISCUSSION:
Over the course of two years, based on community input, subject matter expert workgroup recommendations, and Board discussion, the Board allocated $86,949,405 ARPA SLFRF funds to a variety of projects, including public health, behavioral health, workforce and small business support, emergency food, water infrastructure, broadband infrastructure, nonprofit support, affordable housing, homeless services, and more.
Based on Treasury reporting criteria, Solano County has a total of 58 projects within the 7 Treasury Expenditure Categories. Some projects as reported to the Treasury contain multiple contracts or approved projects which were similar in nature to streamline reporting. The County’s approved ARPA projects include a wide range of programs, services and capital projects, many of which were in the early stages of development or implementation at the time of Board approval and allocation of funding. Management continues to work with project teams to ensure projects remain on target to expend the funds within the ARPA guidelines, including project completion within the specific performance periods required in the ARPA Final Rule. In the event approved ARPA projects are identified as not fully expending the funding allocation as originally approved by the Board, recommendations are being made for the Board to reallocate those funds to alternate projects to ensure the County fully expends its ARPA funding allocation.
Staff have been in communication with the City of Fairfield regarding the Tabor Commons low-income housing project. EAH, the developer, had applied for Multifamily Housing Project funding from the state, but was notified in April 2024 that they were not awarded the funding. Based on the current funding portfolio for the Tabor Commons project, the project has an approximately $10 million funding gap. The project will continue to seek state and other funding, such as HOME funding, but there are no funding applications available at this time and it is unlikely funding will be fully secured prior to the December 2024 obligation deadline. Should the project remain obligated, but not secure the additional funding needed, the funds would not be able to be spent by the ARPA the expenditure deadline of December 2026 and $5.1 million in funds will have to be returned to the Treasury. Staff are therefore recommending the Board consider reallocating the $5.1 million to alternate projects to ensure funds are obligated and expended within the ARPA required timelines. As a result, the total amount of ARPA funds available for reallocation is $7,116,747, which includes the previously identified $2,016,747 available for reallocation.
It is recommended the Board of Supervisors consider providing further direction or take possible action on the reallocation of $7,116,747 in ARPA SLFRF. The Board provided direction for staff to bring back alternatives in several areas which are described below:
1. Revenue Replacement: The final Revenue Loss calculations are available from the Auditor Controller’s Office, allowing Solano County to claim up to $41,138,741 in the category of Revenue Replacement. Based on Board direction, the County has currently claimed $39,517,812 in Revenue Replacement. The County may claim up to an additional $1,620,929 in Revenue Replacement which may be used for a County purpose or additional project(s). Note: Any funds claimed under Revenue Replacement are still required to be obligated by December 31, 2024.
2. Request for Qualifications: Should the Board wish to fund nonprofits utilizing ARPA funds, a competitive bidding process is required. Based on the shortening timeframe for the Board to obligate funds and a minimum of three months to complete a competitive bid process, if the Board would like to consider this avenue, it is recommended that the process be initiated (see proposed timeline in Attachment A). The Board may choose to provide funds toward an RFQ at this time or may choose to utilize the RFQ to create an eligibility list to fund projects should additional funds become available. Attachment A provides draft guidelines for the Board’s consideration.
3. Homeless Prevention: On June 4, 2024 the Board awarded United Way California Capital Corridor $1.4 million of Community Investment Fund and $1.2 million of funding from All Home for a two-year period to provide a homeless prevention strategy to keep 420 households housed based on a completed Request for Proposals. After discussion with the awarded vendor, the project could accommodate an additional $500,000 per year for the two-year period for a total of $1,000,000 funded in the Treasury Category of Negative Economic Impacts. This would provide funding to keep an additional 140 households in their current housing reducing the inflow of people experiencing homelessness.
4. Radio Interoperability: The County has worked with a vendor to develop a contract for Phase I of the expansion of the P25 public radio system based on the current funding available from County General Fund and a State Earmark. Possible next steps for the project include a design for the remaining North County unincorporated build out. This is a possible use of ARPA funds which would qualify under the Treasury Category of Public Health due to the use of the system in the event of a future public health emergency.
5. Vallejo Early Learning Center Community Resource Building: As presented to the Board on April 23, 2024, the Early Learning Center is fully funded through a variety of funding sources including $1.87 million from ARPA SLFRF. The project is now requesting $2,720,000 to fund the Community Resource Building which would provide wrap around services, including food, workforce, and other social services to families accessing the ELC and in the surrounding community.
In addition, staff are continuing to pursue housing project options which qualify for ARPA funds and are able to be completed within the ARPA timelines. The following project has been identified as a potential option for the Board’s consideration:
Parkrose Gardens - Located in Fairfield, this is a 52-unit 28,000 sq. ft. facility with a commercial kitchen, dining facility, and community spaces. The existing facility is approved for use as a Residential Care Facility for the elderly or other Community Care Facility that is licensed by the Department of Social Services or the Department of Health Care Services. Solano County Behavioral Health has identified this facility for potential acquisition to provide 52 permanent supportive housing beds. The purchase price is up to $6.5 million subject to future negotiations and analysis. ARPA funds could be utilized to fund all or a portion of the purchase price with additional funding provided through alternate sources, such as State funding, owner financing, or other County funding sources.
The Board may consider reallocating funds to any of the above or may choose to provide additional direction to staff.
ALTERNATIVES:
The Board could choose not to receive a status update and consider providing direction on the process for reallocating funds. This is not recommended as the Board has requested ARPA status updates. In addition, this is the opportunity for the Board to provide direction on reallocation prior to the obligation deadline of December 31, 2024.
OTHER AGENCY INVOLVEMENT:
The County Administrator’s Office and the Auditor Controller’s Office has been working together to ensure the County is meeting ARPA administrative reporting requirements and to identify administrative costs. Many departments are involved with implementation of projects.
CAO RECOMMENDATION:
APPROVE DEPARTMENTAL RECOMMENDATION