DATE: December 17, 2024
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: Amendment to State and Local Fiscal Recovery Funds Subrecipient
Agreement with Riverdale Public Utility District
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a First Amendment to Subrecipient Agreement No. 22-225 with Riverdale Public Utility District (RPUD) for provision of American Rescue Plan Act - State and Local Fiscal Recovery Funds (ARPA-SLFRF), which will revise the expenditure plan and the modification clause, with no increase to the maximum compensation ($3,175,000); and
2. Authorize the County Administrative Officer or designee to approve and execute written changes to the items in the project budget, which, when added together during the term of the Agreement, do not exceed ten percent (10%) of the total maximum compensation payable to Subrecipient, and which do not result in any change to the maximum compensation amount payable to RPUD.
REPORT
There is no Net County Cost associated with the recommended actions, which will revise the expenditure plan to allow reimbursement of funding administration costs, and update the modification clause in the County’s agreement with RPUD. The recommended amendment will add language to the modification clause, which will allow the County’s Administrative Officer or designee to consider and approve written requests for budget revisions that do not exceed a maximum 10% of the maximum compensation under the agreement, as amended. Recommended action two will delegate limited signature authority to the County Administrative Officer or designee to make the previously described revisions to the agreement’s budget, if requested. (District 4)
ALTERNATIVE ACTION(S):
If the recommended actions are not approved, the maximum allocation of ARPA-SLFRF may not become available to the Subrecipient to fully expend the award under the approved program and will effectively deny the Subrecipient the right to claim reimbursement expenditures that are otherwise reimbursable. Alternatively, your Board may determine to approve the recommended amendment without delegating authority to the CAO to make changes to the budget; in this event, if budget shifts are needed, staff will need to bring another amendment to your Board for review and approval.
FISCAL IMPACT:
There is no increase to Net County Cost associated with the recommended actions. The programs are fully funded with ARPA-SLFRF. Sufficient appropriations are included in the FY 2024-25 Adopted Budget for the Auditor-Controller/Treasurer-Tax Collector Org. 1033 - Disaster Claiming, Fund 0026, Subclass 91021, Account 7845.
DISCUSSION:
In May 2021, the U.S. Department of Treasury (Treasury) published Title 31, Code of Federal Regulations Part 35 Coronavirus State and Local Fiscal Recovery Funds 2021 Interim Final Rule (“Interim Final Rule”) (for expenditures before April 1, 2022) and the 2022 Final Rule (“Final Rule”), which establish a framework for determining the types of programs and services that are eligible to receive the SLFRF under ARPA. The Final Rule became effective on April 1, 2022.
On December 23, 2022, with Congress’ approval of the Consolidated Appropriations Act 2023 the ARPA-SLFRF legislation was revised to include new flexibilities to use funding to provide relief from natural disasters or address the negative economic impacts of natural disasters, to fund certain surface transportation projects, and fund Title I projects under the Housing and Community Development Act of 1974. On September 20, 2023, Treasury published the 2023 Interim Final Rule (IFR) for the new eligible uses in the SLFRF program which became effective upon publication. On November 20, 2023, Treasury published the Obligation IFR which amended the definition of “Obligations” and included additional flexibility for recipients with respect to the ARPA-SLFRF program. The implementation of the ARPA-SLFRF program is regulated by the following: 2021 IFR, 2022 Final Rule, 2023 IFR, and the Obligation IFR.
SLFRF may be used for eligible activities under seven 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;
D. Make necessary investments in infrastructure such as water, sewer, and broadband;
E. Emergency Relief from Natural Disasters;
F. Surface Transportation Projects; and
G. Title I Projects.
Treasury’s guidance permits SLFRF to be used to cover costs for eligible activities within those seven general categories for the period that begins March 3, 2021, and ends on December 31, 2024. Recipients, such as the County, 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. For Surface Transportation and Title I Projects, Treasury requires that SLFRF under these two categories must be expended by September 30, 2026. Under Section 602(c)(3) of the ARPA, the County may transfer SLFRF to non-profits for eligible uses for the purpose of meeting ARPA’s goals. The Subrecipient is a special district in the County of Fresno formed under Part 2 of Division 7 of the California Public Utility Code.
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 $14,105,219 in SLFRF to be made available to qualifying subrecipients through a 30-day application solicitation period and selection review process.
On June 7, 2022, your Board approved Subrecipient Agreement No. 22-225 (Agreement) with RPUD. Since then, the Subrecipient represents that the expenditure plan in Exhibit B, Table 1-1 of the Agreement did not include language in the Engineering and Environmental Review line-item category for eligible reimbursements for the Subrecipient’s administrative costs to manage the ARPA award. RPUD has accrued costs from the engineering firm that are for the management of the grant and would otherwise be reimbursable, and which, without amending the Agreement, would limit the Subrecipient’s ability to recover actual expenses that are necessary to implement the Program.
The Subrecipient represents that the Revised Expenditure Plan on Table 1-1 of Revised Exhibit B clarifies the Subrecipient’s intent to fund administrative costs from the Engineering and Environmental Review line item by adding “Funding Administration” to the description of what elements are covered by the line item.
Approval of the recommended amendment will acknowledge this intended use of funds. Your Board’s approval will also add language in the agreement’s modification clause that will allow the County’s Administrative Officer or designee to consider and approve future written requests for budget revisions up to 10% of the maximum compensation, with no change to the maximum compensation. These changes will provide the Subrecipient with more flexibility expending the line items in the program budget and will help the Subrecipient expeditiously complete the program.
REFERENCE MATERIAL:
BAI #43, June 7,2022
BAI #3, February 1, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Amendment No. 1 to Agreement 22-225 with RPUD
CAO ANALYST:
John Toepfer