DATE: May 9, 2023
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: State Local Fiscal Recovery Funds Subrecipient Agreement with
Poverello House
RECOMMENDED ACTION(S):
TITLE
1. Approve proposed amendment to the County of Fresno’s American Rescue Plan Act - State Local Fiscal Recovery Fund (ARPA-SLFRF) Homelessness Initiatives approved on May 17, 2022, amending the scope of work for the earmarked Emergency Housing Project from infrastructure upgrades for emergency travel trailers to be used as long-term housing for individuals and families experiencing homelessness to be operated by RH Community Builders, to instead fund construction costs to remodel the commercial kitchen at the Poverello House, with no change in proposed funding ($1,000,000); and
2. Approve and authorize the Chairman to execute Subrecipient Agreement for ARPA-SLFRF with Poverello House, in the total amount of $1,000,000 to respond to the public health emergency and address negative social impacts of the pandemic on individuals experiencing food insecurity or homelessness by providing funding assistance for construction costs to remodel the small commercial kitchen at the Poverello House to increase operational efficiencies so that it can increase its volume of daily meals produced and provide food assistance to families and individuals experiencing food insecurity or homelessness in Fresno County.
REPORT
Approval of the first recommended action will amend your Board-approved ARPA-SLFRF Homelessness Initiatives - Emergency Housing Project and authorize the Poverello House (Subrecipient) to use earmarked funding to make tenant improvements that will remodel the Subrecipient’s small commercial kitchen, which is intended to increase operational efficiencies so that it can increase its volume of daily meals produced and will benefit thousands of families and individuals experiencing food insecurity or homelessness in Fresno County. On May 17, 2022, your Board approved, as part of the ARPA-SLFRF Homelessness Initiatives, the earmarking of SLFRF for infrastructure upgrades for emergency travel trailers to be used as long-term housing for individuals and families experiencing homelessness, to be operated by RH Community Builders, but that project is no longer feasible.
Approval of the second recommended action will allocate $1,000,000 to the Subrecipient to fund construction and planned tenant improvement expenditures that will remodel its existing small commercial kitchen, will help increase operational efficiencies and capacity, will enable the Subrecipient to expand its workforce training program, will enable the Subrecipient’s meal programs to reach food deserts, and will be responsive to the negative social impacts exacerbated by the public health emergency on individuals experiencing food insecurity or homelessness in Fresno County. There is no Net County Cost associated with the recommended actions. This item pertains to a location in District 3, however, benefits are countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the recommended actions, SLFRF would not become available to the Subrecipient to fund construction and tenant improvement expenditures that will remodel the Subrecipient’s small commercial kitchen, which is intended to increase operation efficiencies so that it can increase its volume of daily meals to benefit individuals experiencing food insecurity or homelessness in Fresno County. The project will be delayed until another funding source is identified by the Subrecipient.
FISCAL IMPACT:
There is no increase in Net County Cost associated with recommended actions. Costs for the recommended action will be funded with ARPA-SLFRF. Sufficient appropriations are included in FY 2022-23 Auditor-Controller/Treasurer-Tax Collector’s Org. 1033 - Disaster Claiming, Fund 0026, Subclass 91021, Account 7845.
DISCUSSION:
The United States Department of the Treasury’s (Treasury) Title 31, Code of Federal Regulations, Part 35 Coronavirus SLFRF Interim Final Rule (“Interim Final Rule”) and Final Rule (“Final Rule”) establish a framework for determining the types of programs and services that are eligible under the ARPA. SLFRF may be used for eligible activities under the following general categories:
A. Respond to the COVID-19 public health emergency or its negative economic impacts;
B. Provide premium pay for essential workers;
C. Replace public sector revenue loss, subject to certain limitations; and
D. Make necessary investments in infrastructure such as in water, sewer, and broadband.
The Final Rule permits SLFRF to be used to cover costs for eligible activities within the four general categories for the period that begins March 3, 2021, and ends on December 31, 2024. Recipients and its subrecipients, must return any funds to the Treasury which are not obligated by December 31, 2024, and any funds not expended to cover such obligations by December 31, 2026.
On February 1, 2022, your Board approved the Ad-Hoc Committee’s expenditure plan which earmarked funds for proposals that may be funded either in whole or in part by the County’s $194,063,657 allocation of SLFRF. The approved expenditure plan included a $6,500,000 earmark to fund the Homelessness Initiatives to be coordinated by the County Administrative Office, Department of Social Services, and Department of Behavioral Health. On May 17, 2022, your Board approved the Homeless Initiatives consisting of four programs: Rural Outreach Services, Crossroad Village Affordable Housing, Emergency Housing Project, and Alternative Dwelling Units that would strategically benefit the homeless population and address negative social impacts exacerbated by the pandemic.
Under the approved Emergency Housing Project, your Board approved an earmark of up to $1,000,000 to provide funding assistance to improve, adapt, and secure a location to place 20 emergency travel trailers received from the California Office of Emergency Services, which would be used as longer-term housing for individuals and families experiencing homelessness. At that time, it was planned that the County would contract with RH Community Builders to provide infrastructure upgrades that would connect the trailers to City utilities, and to manage and operate the units, including one full time property supervisor.
During the vetting and review process to determine SLFRF eligibility and terms and conditions for the Emergency Housing Project, the executive director of RH Community Builders informed County staff that it considered three potential locations to place the trailers near its existing facilities where wrap around services are available. After nearly a year-long process in meeting with City of Fresno officials, on February 6, 2023, RH Community Builders informed the County staff that it could not to secure a location for the travel trailers that would obtain City of Fresno’s support.
County staff has assessed the conditions of the travel trailers and intends to propose a recommendation for the use of the travel trailers in a separate agenda item for your Board’s consideration at a later Board date.
During County staff’s assessment of other programs that would fit within the Homelessness Initiatives, staff identified the Subrecipient as a reputable nonprofit organization with ample experience in helping the homeless population in the County.
On December 20, 2022, the Subrecipient submitted a formal request to the County Administrative Office for funding to remodel and renovate its small commercial kitchen, which provides free daily meals three times a day, which will help increase operational efficiencies and capacity, will enable the Subrecipient to expand its workforce training program, and will enable the Subrecipient’s meal programs to reach food deserts throughout rural Fresno County. County staff has reviewed the Subrecipient’s request and is of the opinion that the new request would still align with your Board’s initial earmark for Homelessness Initiatives, in that the Subrecipient’s small commercial kitchen provides free hot meals for the homeless, and people in need, through the Subrecipient and other nonprofit partners that provide emergency shelter and social services in the County. As proposed, SLFRF will provide partial funding assistance to the Subrecipient to start the project, while other funding sources are secured by the Subrecipient to fully fund the kitchen remodel.
Under Section 602(c)(3) of the ARPA, the County may transfer SLFRF to nonprofit 501(c)(3) organizations for eligible uses for the purpose of meeting ARPA’s goals. The following section summarizes the recommended agreement.
Poverello House, Kitchen Tenant Improvements
In 1973, the Subrecipient’s mission began with its founder helping individuals experiencing food insecurity by delivering peanut butter and jelly sandwiches out of his vehicle. The Subrecipient is based in downtown City of Fresno and provides relief to the most vulnerable populations, including providing food, clothing, shelter, and medical attention.
For over 30 years, the Subrecipient represents that its small commercial kitchen has served thousands of meals through three of its programs: 1) Onsite meals, which provides free hot meals three times daily during breakfast, lunch, and dinner hours for individuals in need; 2) Offsite meals, which are hot meals prepared by the Subrecipient and delivered to various partner agencies consisting of emergency shelters, nonprofits, and disadvantaged communities throughout the County; and 3) Emergency Food Bags program, which provides emergency food bags to clients upon request.
The Subrecipient represents that in the early 1990s, its kitchen was remodeled and rated with a capacity to prepare approximately 1,200 daily meals. Over time, the Subrecipient’s kitchen and workforce development culinary program has evolved to nearly double its serving capacity to approximately 2,500 daily meals, which benefits thousands of families and individuals experiencing food insecurity or homelessness in the County. The Subrecipient represents that during the course of the pandemic it has seen the demand for additional meals increase by approximately 200-300 daily meals, which is attributed to many factors including but not limited to increases in living expenses, more individuals becoming homeless or in need of emergency shelter, and rising food prices.
For example, based on the 2020 Annual Point in Time Count, a count of sheltered and unsheltered people experiencing homelessness on a single night in January 2020, there were 3,251 people in the COUNTY experiencing homelessness, while two years later, the 2022 Annual Point in Time Count identified 3,938 people in the COUNTY experiencing homelessness. During the same period, the Subrecipient represents that its kitchen reached its maximum capacity to effectively meet the increasing demand for daily meal production for its programs. The Subrecipient forecasts that by the end of 2023, demand will likely increase to approximately 5,500 daily meals needed to adequately continue serving individuals impacted by the pandemic.
SLFRF provided under the recommended agreement will provide partial funding assistance to the Subrecipient for the construction of the kitchen renovations intended to increase daily meal production consisting of the following expenditures: general improvement requirements, planning, site work, concrete and masonry works, new foundation, plumbing improvements, purchase of materials, doors and windows, finishing items, specialty items, equipment, mechanical and electrical improvements. These renovations will support a new culinary services facility designed to provide workforce training, and which will increase capacity to continue serving the community for the next three decades and benefit individuals experiencing food insecurity or homelessness in the County.
The Final Rule identified food insecurity as a negative economic impact of the COVID-19 public emergency, with nearly 20 million adults living in households sometimes experiencing food insecurity, where there was not enough food to eat. The Final Rule specified that food insecurity was exacerbated in many communities, specifically in disadvantaged communities, areas in qualified census tracts, and moderate to low-income households across the United States more than in those households with areas with higher incomes. Given that the rate of food insecurity increased during the pandemic, Treasury has determined that programs that respond to the public health emergency or its negative economic impacts are eligible uses of SLFRF. The Final Rule provided that food assistance is an enumerated eligible use, and capital expenditures related to food banks and other facilities primarily dedicated to addressing food insecurity are eligible uses under ARPA. The recommended agreement is intended to support a strong and equitable recovery from the COVID-19 pandemic and economic downturn by assisting the Subrecipient make capital improvements to its commercial kitchen so that it can increase the volume of daily meals produced and continue serving thousands of individuals impacted by the pandemic in Fresno County.
REFERENCE MATERIAL:
BAI # 32, May 17, 2022
BAI #3, February 1, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Agreement with Poverello House
CAO ANALYST:
George Uc