DATE: December 17, 2024
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: Interdepartmental Agreement, American Rescue Plan Act - Coronavirus State and Local Fiscal Recovery Funds, Obligation of Funds
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute retroactive Interdepartmental Agreement between the County Administrative Office, Sheriff-Coroner-Public Administrator’s Office, and Probation Department obligating American Rescue Plan Act - State Local Fiscal Recovery Funds (ARPA-SLFRF) under Public Sector Revenue Loss category to fund a portion of generally-funded costs in the Sheriff-Coroner-Public Administrator’s Office and Probation Department, consisting of public safety payroll costs for deputies and officers, community patrolling, supervision and assistance of individuals detained at County Jail and Juvenile Justice Campus, which is responsive to the negative economic impacts to public safety due to the pandemic and will enable the County to use SLFRF to fund the provision of government services (up to $10,000,000).
REPORT
There is no additional Net County Cost associated with the recommended action. Approval of the recommended action will authorize the Chairman to execute the Interdepartmental Agreement (Agreement) between the County Administrative Office (CAO), Sheriff-Coroner Public Administrator’s Office (Sheriff), and Probation Department (Probation) and obligate the $10 million in SLFRF identified in the public sector revenue loss (Revenue Loss) category. Approval of the recommended action would ensure funds allocated under Revenue Loss meet the obligation deadline through the recommended Agreement, as permitted under the United States Department of the Treasury’s (Treasury) Obligation Interim Final Rule (Obligation IFR). The recommended Agreement will impose conditions on the departments’ use of ARPA-SLFRF, establish the scope of work and deliverables, and will memorialize each department’s responsibility to complete the Program through the period of performance. This item is countywide.
ALTERNATIVE ACTION(S):
Your Board may choose not to accept the recommended action, in which case the $10 million in allocated under Revenue Loss will not have the additional level of certainty to meet Treasury’s definition of an obligation before the deadline of December 31, 2024. In that event, the ARPA-SLFRF funds committed under Revenue Loss may be required to be returned to the Treasury.
RETROACTIVE AGREEMENT:
The recommended Agreement is retroactive to June 7, 2022, to correspond to Treasury’s deadline for recipients to confirm their one-time election to Treasury at the end of April 2022. The Final Rule permits SLFRF to be used to cover costs for eligible activities for the performance period that begins March 3, 2021, and ends on December 31, 2026.
FISCAL IMPACT:
The recommended Agreement is retroactive to June 7, 2022, to correspond to Treasury’s deadline for recipients to confirm their one-time election to Treasury at the end of April 2022. The Final Rule permits SLFRF to be used to cover costs for eligible activities for the performance period that begins March 3, 2021, and ends on December 31, 2026.
FISCAL IMPACT:
Approval of the recommended action will result in no increase to Net County Cost. Approval of the recommended action would obligate and memorialize permissible expenditures under the Revenue Loss funding identified in Auditor-Controller/Treasurer-Tax Collector Org 1033 - Disaster Claiming, Fund 0026, Subclass 91021.
DISCUSSION:
On February 1, 2022, your Board approved the County’s ARPA-SLFRF expenditure plan, which earmarked funds for proposals that may be funded either in whole or in part by the County’s allocation of SLFRF. Under the Revenue Loss category, your Board approved up to $10 million in SLFRF to fund operational expenses for governmental services in general funded departments.
On April 30, 2022, the County was required to confirm its decision to Treasury, whether the County wished to calculate its revenue loss or elect the one-time “standard allowance” option. In the April 2022 quarterly expenditure report, the County elected the standard allowance option which was electronically submitted to the Treasury.
On June 7, 2022, your Board ratified the County’s election of the “standard allowance” in revenue loss and unanimously approved Resolution No. 22-206, which authorize up to $10 million in SLFRF to fund traditional government services.
On November 20, 2023, the Treasury published the Obligation IFR, which amended the definition of “obligations” with respect to the ARPA-SLFRF program. Treasury clarified that the obligation deadline applies to the recipients of ARPA, and a cost is considered to have been incurred once a recipient enters into a subaward, contract, or similar transaction that requires payment.
On March 29, 2024, Treasury published additional guidance in Section 17 of the ARPA-SLFRF frequently asked questions (FAQs) which clarified that funds under the revenue loss category are also subject to the obligation requirements. Treasury’s FAQ clarifies that recipients could meet the obligation requirement through interagency agreements. Treasury’s FAQ 17.6 provides six conditions, of which an interagency agreement must satisfy a minimum four conditions, to qualify as an obligation. As long as the interagency agreement satisfies a minimum of four conditions, it constitutes a “transaction requiring payment” similar to a contract or subaward and is therefore an obligation for purposes of the SLFRF rule.
To meet the obligation definition, the interagency agreement must satisfy one of the following conditions:
A.1. It imposes conditions on the use of funds by the agency, department, or part of government receiving funds to carry out the program;
A.2. It governs the provision of funds from one agency, department, or part of government to another to carry out an eligible use of SLFRF funds; or
A.3. It governs the procurement of goods or services by one agency, department, or part of government from another.
And must also satisfy each of the following conditions:
B.1. It sets forth specific requirements, such as a scope of work and project deliverables;
B.2. It is signed by the parties to the agreement, or otherwise evidences that each party
has assented to the agreement; and
B.3. It does not disclaim any binding effect or state that it does not create rights or obligations.
The recommended Agreement satisfies four conditions described in FAQ 17.6, which are summarized in the following section of this report.
A.1. Imposes conditions on the use of funds by the agency, department, or part of government receiving funds to carry out the Program.
The CAO, in coordination with Sheriff and Probation, seeks to obligate the $10 million in SLFRF identified in the Revenue Loss category. The recommended agreement will memorialize each department’s responsibilities for the completion of the Program.
CAO shall provide administrative support services to Sheriff and Probation including, but not limited to: coordination of the Program, agenda item processing, research on administrative policies and practices, and ARPA support and resources in support of the Program. CAO shall also provide oversight over the Program, to ensure that Sheriff and Probation comply with and fulfill all responsibilities and conditions imposed by this Agreement. The recommended Agreement would impose the following conditions for the departments’ use of funds:
• Sheriff is responsible for the apprehension of criminal suspects for crimes committed in the unincorporated areas of the County. This includes investigation, gathering documentation, preservation, analysis, and court testimony for evidence seized. Sheriff is also responsible for providing judicial protection, bailiff services, public screening, and court security. A third major responsibility is the operation of County Jail facilities.
• Probation is a State-mandated justice system department responsible for preparing pre-sentence evaluations and providing post-sentence supervision of adult and juvenile offenders. Probation also serves as the investigative and evaluative arm of the Fresno County Superior Court. Probation is responsible for the operation of County Juvenile Justice Campus.
• Sheriff and Probation agree to report incurred costs for the provision of government services consisting of public safety payroll costs for deputies and officers, community patrolling, and supervision and assistance of individuals detained at County Jail and Juvenile Justice Campus.
• Sheriff and Probation agree that generally funded government services related to public safety are expenditures that will not be duplicative costs with other potential funding sources, such as such as State or Federal programs.
SLFRF funds allocated for this program will assist the County fund a portion of annual operational expenditures to avoid cuts in services that are generally funded within Sheriff and Probation, consisting of public safety payroll costs for deputies and officers, community patrolling, and supervision and assistance of individuals detained at County Jail and Juvenile Justice Campus, which is responsive to the negative economic impacts to public safety due to the pandemic and will enable the County to use SLFRF to fund for the provision of government services.
B.1. Sets forth a scope of work and project deliverables.
The recommended Agreement will memorialize your Board’s approval to use Revenue Loss funding to assist the County fund a portion of annual operational expenditures to avoid cuts in services that are generally funded within Sheriff and Probation, consisting of public safety payroll costs for deputies and officers, community patrolling, and supervision and assistance of individuals detained at County Jail and Juvenile Justice Campus, which is responsive to the negative economic impacts to public safety due to the pandemic and will enable the County to use SLFRF to fund for the provision of government services.
Task 1: CAO shall provide administrative support services to Sheriff and Probation including, but not limited to: coordination of the Program, agenda item processing, research on administrative policies and practices, and ARPA support and resources in support of the Program. CAO shall also provide oversight over the Program, to ensure that Sheriff and Probation comply with and fulfill all responsibilities and conditions imposed by this Agreement.
Task 2: The CAO, in coordination with ACTTC, shall be responsible to ensure that the incurred costs reported by Sheriff and Probation comply with the Treasury requirements. The CAO and/or ACTTC office may require additional supporting documentation or clarification of claimed expenditures for the ARPA funding.
Task 3: The CAO, in consultation with ACTTC, shall make the final determination of whether Sheriff and Probation have satisfied their obligations under this Agreement.
Task 4: Sheriff and Probation agree to report incurred costs for the provision of government services consisting of public safety payroll costs for deputies and officers, community patrolling, and supervision and assistance of individuals detained at County Jail and Juvenile Justice Campus.
Task 5: Sheriff and Probation agree that generally funded government services related to public safety are expenditures that will not be duplicative costs with other potential funding sources, such as such as State or Federal programs.
B.2. The Agreement is signed by the parties.
The recommended Agreement has been signed by the Directors of the participating departments. Your Board’s approval will approve and ratify the departments’ responsibilities and commitment to complete the Program.
B.3. Does not disclaim binding effect or state that it does not create rights of obligations.
The recommended Agreement does not disclaim any department’s commitment to complete the Program. Further, if approved, the recommended Agreement will be approved by your Board at a regularly scheduled public meeting. This demonstrates that the recommended Agreement intends to constitute binding obligations for each of the participating departments.
REFERENCE MATERIAL:
BAI #39, June 7, 2022
BAI #3, February 1, 2022
BAI #7, August 24, 2021
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Interdepartmental Agreement
CAO ANALYST:
George Uc