title
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 $2,308,628 in ARPA SLFRF; and Delegate authority to the County administrator to sign amendments and other contractual agreements related to reallocations and ARPA project implementation for all projects
body
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); and
2. Consider providing further direction and take possible action on the reallocation of $2,308,628 in ARPA SLFRF; and
3. Delegate authority to the County administrator to sign amendments and other contractual agreements related to reallocations and ARPA project implementation for all projects.
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 funding for the full amount.
During the allocation process, the Board requested staff bring back regular updates on ARPA projects. Attachment A provides an update on all ARPA approved projects as of March 31, 2024.
Some projects have completed under budget and a other projects have been determined as not feasible to move forward with ARPA funding. On November 7, 2023 and February 6, 2024, the Board discussed considerations for reallocation of funds. On February 6, 2024, the Board reallocated $1,713,154 and asked staff to return to the Board with projects that have funds that are not yet obligated and provide a status update of obligation on those projects. Out of a total of $86,949,405, $65,216,867 is obligated as of March 31, 2024 with $21,732,538 remaining for obligation. Out of this amount, approximately $10 million is expected to be obligated in the next quarter. An update on these projects, as well as projects that are at risk of not being obligated by the ARPA deadline of December 31, 2024 are provided in Attachment B.
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 to ensure funds are obligated by the Treasury deadline of December 31, 2024. 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 original Treasury Expenditure Categories. Some projects as reported to the Treasury contain multiple contracts or approved projects which were similar in nature to streamline reporting.
A full status update on the Board approved ARPA projects is included as Attachment A.
Obligation Frequently Asked Questions
In November 2023, the Treasury published the Obligation Interim Final Rule (IFR). On March 29, 2024, the Treasury published several new Frequently Asked Questions (FAQs) which addressed additional concerns regarding the upcoming obligation deadline of December 31, 2024. Specifically, these FAQs clarified that:
• The Treasury considers an interagency agreement, including an agreement in the form of a memorandum of understanding (MOU), meeting certain conditions constitutes a transaction requiring payment similar to a contract or subaward and therefore an obligation.
• Recipients may consider themselves to have obligated funds to maintain certain personnel costs for personnel whose salary may be paid under an eligible use of SLFRF funds through December 31, 2026, for any position that existed and was filled by December 31, 2024.
In addition, the Treasury moved the reporting period for Administrative Cost Obligation from April 30, 2024 to July 31, 2024.
Staff will take these clarifications into account when identifying obligations in the next reporting period.
Reallocation Overview
The County’s approved ARPA projects include 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 an approved ARPA project is identified which may not fully expended the funding allocation as originally approved by the Board, staff will continue to make recommendations for the Board to reallocate those funds to an alternate project to ensure the County fully expends its ARPA funding allocation.
To date, there is a total of $2,308,628 in ARPA funds available for reallocation. These available funds are the result of completed projects that have released unspent funding, projects identified as not able to be completed as originally proposed, and of the revised administrative calculation.
Requests for Reallocation
There have been recent requests from The Workforce Development Board (WDB) of Solano County and the Napa Solano Small Business Development Center (SBDC) and Resource Management to make minor adjustments in allocations between projects to meet demand. These include:
1. The Workforce Development Board (WDB) of Solano County and the Napa Solano Small Business Development Center (SBDC) are requesting two modifications to their project allocations reallocating a total of $250,000 which would have no net change on the total allocations for WDB and SBDC.
2. Resource Management is requesting one modification to increase a project allocation in the amount of $29,882 out of $61,903 available for reallocation under Water Infrastructure which would release a net $32,021 for future reallocation.
Details of these requests can be seen in Attachment C.
Other Options for Reallocation
Should the Board choose to move forward with the reallocations as outlined above, $2,028,747 remains available for reallocation. Options for reallocation guided by previous Board direction include:
1. Claim an additional $1,620,929 in Revenue Replacement which may be used for a County purpose or additional project(s). Based on the final Revenue Loss calculations from the Auditor Controller’s Office, Solano County may claim up to $41,138,741 in the category of Revenue Replacement. Based on previous Board direction, the County has currently claimed $39,517,812 in Revenue Replacement, leaving $1,620,929 still available to be claimed. Note: Any funds claimed under Revenue Replacement are still required to be obligated by December 31, 2024.
2. Release a Request for Proposals (RFP) or Request for Qualifications (RFQ) to identify qualifying projects implemented by nonprofits. Should the Board wish to fund nonprofits utilizing ARPA funds, a competitive bidding process is required. Based on the short remaining 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 option, it is recommended that the RFP/RFQ process be initiated. Releasing a RFQ would allow the Board to identify a listing of agencies for potential award should funds become available. This process does not obligate the Board to fund projects if funds are not made available. Questions that the Board may choose to consider providing direction on for any future RFP/RFQs include:
a. What priorities or Treasury Categories would the Board like to consider funding under an RFP/RFQ?
b. Would the Board like to consider both nonprofit agencies that have already received ARPA funds and those who have not?
c. What should the maximum funding request be?
d. Should the Board instead utilize a previous competitive bidding process, such as the annual grants from the Community Investment Fund or the previous ARPA nonprofit RFP proposals instead of a new competitive bidding process?
3. Reallocate funds to other project requests including:
a. Up to $2,720,000 to the category of Negative Economic Impacts for the Vallejo Early Learning Center.
b. Future projects to be determined in the areas low-income housing, prevention measures to lessen the threat of an emergency, or other areas determined by the Board for exploration.
4. Reallocate to another project not identified here.
Staff are continuing to closely monitor ARPA projects to ensure completion of activities and ensure the County is meeting the full obligation and expenditure of its ARPA funding. Staff will continue to provide project updates and recommendations for reallocation for Board consideration and direction in the coming months.
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