DATE: January 23, 2024
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: Amendment to State and Local Fiscal Recovery Funds Subrecipient
Agreements with:
1. Easter Seals Central California
2. Valley Caregiver Resource Center
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a First Amendment to Subrecipient Agreement No. 22-535 with Easter Seals Central California (ESCC) for provision of American Rescue Plan Act - State and Local Fiscal Recovery Funds (ARPA-SLFRF), which will reduce the administrative burden to implement the program by revising the expenditure plan and the modification clause, with no increase to the maximum compensation; and
a. 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 ESCC.
2. Approve and authorize the Chairman to execute a First Amendment to Subrecipient Agreement No. 22-537 with Valley Caregiver Resource Center (VCRC) for provision of ARPA-SLFRF, which will reduce the administrative burden to implement the program by revising the expenditure plan and the modification clause, and clarifying the timeframe of the program, with no increase to the maximum compensation; and
a. 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 VCRC.
REPORT
There is no Net County Cost associated with the recommended actions, which will revise the expenditure plans for the County’s agreements with ESCC and VCRC. The recommended amendments will update line items in the expenditure plans with no increase to the maximum compensation amount in either agreement. The recommended amendments add language to the modification clause of the agreements, 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 each agreement as amended. The recommended sub-actions will delegate limited signature authority to the County Administrative Officer or designee to make the previously described revisions to each agreement’s budget, if requested. This item is countywide.
ALTERNATIVE ACTION(S):
If the recommended actions are not approved, the maximum allocation of ARPA-SLFRF would not become available to the subrecipients to fund the implementation of their respective programs. Alternatively, your Board may determine to approve the amendments without delegating authority to the County Administrative Officer 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 2023-24 Adopted Budget for the Auditor/Controller-Treasurer/Tax Collector 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 and 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 their 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.
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. Both Subrecipients are private, nonprofit 501(c)(3) organizations.
On June 21, 2022, your Board approved the Ad-Hoc Committee’s First Round Subrecipient Priority List, which earmarked funds for proposals that may be funded either in whole or in part by the County’s allocation of SLFRF. The approved First Round Subrecipient Priority List included proposed projects for ESCC ($200,000) and VCRC ($451,071) to respond to the public health emergency or address the negative economic impacts of the pandemic on Public Health Services.
Easter Seals Central California, 501.c.3.
On November 29, 2022, your Board approved Subrecipient Agreement No. 22-535 with ESCC. Since then, ESCC represents that the expenditure plan found in Exhibit B, Table 1-1 of Agreement No. 22-535 requires that ESCC present to the County an unreasonable amount of supporting documentation to justify the organization’s total annual costs for the SLFRF program. The Expenditure Plan’s line-item descriptions have created an undue hardship in the administration of the grant and have limited ESCC’s ability to recover actual expenses that are necessary to implement the Subrecipient’s Program and which would otherwise be reimbursed with SLFRF.
The recommended amendment will correct a calculation error on how Fringe Benefits were initially calculated, which originally used 15% of ESCC’s annual total salaries, wages, and benefits; the proposed Revised Expenditure Plan will instead correctly charge salaries, wages, and benefits for the portion of Subrecipient personnel being billed to the ARPA-SLFRF Program.
The recommended amendment will also redistribute available funds by increasing the personnel cost line items upward by 15% and adding language that describes the line items showing salaries and benefits included and increase other Direct Costs line items without increasing overall maximum ARPA Grant compensation to ESCC.
ESCC represents that budget in the recommended amendment will more accurately reflect the program’s actual expenditures, rather than the projected expenses previously presented in Subrecipient Agreement No. 22-535, and will allow ESCC to recover actual costs that should be reimbursed by the SLFRF Program.
Valley Caregiver Resource Center, 501.c.3.
On November 29, 2022, your Board approved Subrecipient Agreement No. 22-537 with VCRC. Since then, VCRC represents that the expenditure plan found in Exhibit B, Table 1-1 of Agreement No. 22-537 requires that VCRC present to the County an unreasonable amount of supporting documentation to justify the organization’s total annual costs for the SLFRF program, and that the Expenditure Plan’s line item descriptions have created an undue hardship in the administration of the grant, and have limited VCRC’s ability to recover actual expenses that are necessary to implement the Program and which would otherwise be reimbursed with SLFRF. The recommended amendment will also clarify the program’s timeframe provided in VCRC’s agreement.
VCRC represents that the recommended amendment will more accurately reflect the program’s actual expenditures, rather than the rigid categorical expenses previously presented in Agreement No. 22-537, and will allow VCRC to recover actual costs that should be reimbursed by the SLFRF Program.
Approval of the recommended actions will revise the expenditure plans for the subrecipient agreements with ESCC and VCRC, which will provide needed flexibility to ensure the maximum limits of the grants can be reached. Your Board’s approval will also add language in each 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. This change will provide each subrecipient with some flexibility within the line items in the respective program budgets and will help each subrecipient expeditiously complete their programs.
REFERENCE MATERIAL:
BAI #7, June 21,2022
BAI #34, November 29, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Amendment No. 1 to Agreement 22-535 with Easter Seals Central California
On file with Clerk - Amendment No. 1 to Agreement 22-537 with Valley Caregiver Resource Center
CAO ANALYST:
John Toepfer