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Receive an update on obligation status for projects utilizing Solano County American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds (SLFRF); Consider reallocation options for unobligated funding, including the results of the Request for Qualifications from non-profit agencies and other potential projects; Consider providing direction on $3,500,000 of unobligated funding that has become available for reallocation and other funding that may become available before the obligation deadline of December 31, 2024; and Delegate authority to the County Administrator to sign any agreements related to the ARPA 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 an update on obligation status for projects utilizing Solano County American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Funds (SLFRF); and
2. Consider reallocation options for unobligated funding, including the results of the Request for Qualifications from non-profit agencies and other potential projects; and
3. Consider providing direction on $3,500,000 of unobligated funding that has become available for reallocation and other funding that may become available before the obligation deadline of December 31, 2024; and
4. Delegate authority to the County Administrator to sign any agreements related to the ARPA 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 monitored 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 projects which were either determined as not feasible to move forward with ARPA funding or require modifications to meet ARPA criteria. On October 8, 2024, the Board approved the reallocation of the remaining available ARPA funds available at that time to fund the Parkrose Gardens Project. Following the approval of the reallocation of funds on October 8, staff have continued to monitor unobligated projects to identify any necessary reallocations prior to the December obligation deadline.
At this time, it has been identified that the Fairgrounds Channel Project will not be able to be completed within the ARPA timeline. The project will continue with development work to become “shovel ready” and anticipates obligating $1,500,000 of the original project budget of $5,000,000 by December 31, 2024, releasing $3,500,000 back for reallocation to another eligible project. As staff continue to track projects and some contracts come to completion, it is anticipated that small amounts of additional funds may become available between now and the December obligation deadline. The $3,500,000 along with any other unobligated funds must be obligated via fully executed contracts no later than December 31, 2024.
Over the past few months, the Board has heard presentations for possible options for reallocation of ARPA SLFRF funding. Today the Board will be presented options that are still available for consideration including revenue replacement, non-profit agencies identified through the ARPA Request for Qualification (RFQ), emergency relief from natural disasters, the Vallejo Early Learning Center, radio interoperability and a request from the City of Suisun City to rehabilitate their closed Senior Center.
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 will not be obligated by the deadline of December 31, 2024 set by the US Treasury. 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.
As ARPA projects are identified as not being able to fully obligate and/or expend 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. Previous reallocations include reallocating funds within workforce project, water projects, and most recently funding a new project to purchase and renovate the former Parkrose Gardens to provide permanent supportive housing.
At this time, there is $12,090,746 that is allocated toward projects, but is not currently obligated (Attachment A). Out of this, staff have identified $3,500,000 from the Fairgrounds Channel Project that will not be obligated by the deadline of December 31, 2024, and therefore now available for reallocation. In addition, there are several contracts that are obligated, but that have ended or are ending October 2024 which staff anticipate being slightly underspent providing funds back for re-obligation. As there will be a short timeline for re-obligation, staff is seeking direction on actions for funds identified between now and the obligation deadline.
Reallocation Options:
Revenue Replacement
The final Revenue Loss calculations from the Auditor Controller’s Office allow Solano County to claim up to $41,138,741 in the category of Revenue Replacement. These funds may be used for any County purpose, but are still required to be obligated by December 31, 2024. As of June 11, 2024, the Board expressed an intent claim the full amount of $41,138,741 in Revenue Replacement. At this time there is $1,714,006 available under Revenue Replacement to cover County costs.
ARPA Request for Qualifications (RFQ) from non-profit agencies
In June 2024, the Board directed staff to release a RFQ to solicit Applications from non-profit agencies for projects that could be funded utilizing ARPA SLFRF. At that time the Board provided direction on the terms of the RFQ. While the Board expressed interest in funding a limited number of projects based on this RFQ, the Board did not allocate a specific amount of funds to be dedicated to the RFQ and there was no guarantee any projects will be funded as a result of this RFQ.
The results of the RFQ, including the links to all of the applications and the recommendation of the review panel can be found in Attachment C. The Board may choose to consider allocating ARPA funding toward one or more of the non-profit applications or may choose to not fund any applications. Should the Board consider allocating ARPA funds toward non-profit allocations, the Board may want to consider creating an Ad Hoc Workgroup or other means to identify which projects out of the eleven that qualified to consider for funding.
Radio Interoperability
The County is engaged in a project to upgrade to the P25 public radio system throughout the County. The total cost of the project is approximately $12 million. The County previously funded the project with an initial $6.25 million from County General Fund and a State Earmark. The County has entered into a contract for Phase I of the expansion of the P25 public radio system to south County.
The ARPA funding request is for up to $5,750,000 to fully complete the P25 public radio system including the north County buildout. The project is able to accept partial funding and will adjust the scope of work as necessary. This possible use of ARPA funds 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.
Vallejo Early Learning Center Community Resource Building
As presented to the Board on April 23, 2024, the Early Learning Center is fully funded by 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.
City of Suisun City
The City of Suisun City has submitted a request for $1,932,676 in funds to rehabilitate their closed Senior Center to serve as a community hub which would offer services such as food and healthcare and serve as a disaster response center when needed. The request from the City of Suisun is provided in Attachment D.
Emergency Relief from Natural Disasters
In addition to the options above that the Board has previously discussed, it has recently been identified that there is a need for large venues for sheltering and other emergency services in the event of a natural disaster, such as earthquake or fire.
In 2023, the US Treasury published a 2023 Interim Final Rule which provided additional flexibility by introducing three new ARPA project categories including Emergency Relief from Natural Disasters. Funds could be utilized under this Treasury category to update large venues, such as McCormack Hall at the Solano County Fairgrounds to ensure Solano County is ready for future disasters.
The Board may consider reallocating funds to any of the above or may choose to provide additional direction to staff. Attachment B provides some suggested scenarios as a starting point for Board discussion.
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