DATE: November 5, 2024
TO: Board of Supervisors
SUBMITTED BY: Steven E. White, Director
Department of Public Works and Planning
SUBJECT: Interdepartmental Agreement between County Administrative Office and Department of Public Works and Planning for American Rescue Plan Act, State and Local Fiscal Recovery Funds
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute a retroactive Interdepartmental Agreement between the County Administrative Office and the Department of Public Works and Planning, which obligates $23,635,275 in American Rescue Plan Act State and Local Fiscal Recovery Funds to fund programs that are responsive to the public health emergency or negative economic impacts due to the pandemic ($8,685,275), and programs that will make necessary improvements to water infrastructure ($14,950,000), effective December 13, 2022 through December 31, 2026, to meet the United States Treasury’s December 31, 2024, obligation deadline for the Department’s ARPA-SLFRF Programs.
REPORT
Approval of the recommended action will execute a retroactive Interdepartmental Agreement (Agreement) between County of Fresno (County) County Administrative Office (CAO) and the Department of Public Works and Planning (Department) to facilitate implementation and completion of the Department’s ARPA-SLFRF program’s scope of work, timelines, planned deliverables, activities, actions, and responsibilities. The recommended Agreement will impose conditions on the use of American Rescue Plan Act - State and Local Fiscal Recovery Funds (ARPA-SLFRF) by the Department and memorialize the Department’s responsibilities to complete the described projects (each a Program, and collectively, the Program). Approval of the recommended Agreement will obligate $23,635,275 in ARPA-SLFRF in support of the Program through an Interagency Agreement, as permitted under the United States Department of the Treasury’s (Treasury) Obligation Interim Final Rule (Obligation IFR). This item is countywide.
ALTERNATIVE ACTION(S):
Should your Board not approve the recommended action, the Department’s approved SLFRF funds that have not been obligated by the obligation deadline of December 31, 2024, are required to be returned to the Treasury. This would impede the Department’s necessary investments in infrastructure improvements to water management, storage, and drinking water, and address negative economic impacts of the pandemic that would benefit disadvantaged communities in Fresno County.
RETROACTIVE AGREEMENT
The recommended Agreement is retroactive to December 13, 2022, to conform with the Obligation IFR.
FISCAL IMPACT:
There is no Net County Cost associated with the recommended actions. Sufficient appropriations and estimated revenues are included in the Department of Public Works and Planning - Org 8870 FY 2024-25 Adopted Budget. Costs for the recommended actions will be reimbursed County of Fresno through Auditor-Controller/Treasurer-Tax Collector Org 1033 - Disaster Claiming, Fund 0026, Subclass 91021. Any costs associated with the implementation of the Program that exceed the Department’s ARPA-SLFRF allocation will be assessed by the Department and accounted for in the Department’s future budgets.
DISCUSSION:
The Treasury ARPA regulations provide that the full balance of each recipient’s award must be obligated by December 31, 2024, and spent by December 31, 2026. In late 2023, the Treasury provided updated guidance on the definition of “obligated” that the Treasury will use in its oversight of the ARPA program. To the Treasury, “obligation” means formally encumbering funds through a contract, grant award, interagency agreement, or other type of formal MOU. This means that any funds for ARPA projects that are not successfully “obligated” by the end of this calendar year would lose their funding, as the balance would be required to be returned to the Treasury. This recommended Agreement is being presented to your Board in order to meet the Treasury’s obligation requirement.
On March 29, 2024, the Treasury published additional guidance in Section 17 of the ARPA-SLFRF frequently asked questions (FAQs), which clarified that recipients may meet the obligation requirement through interagency agreements for the purpose of SLFRF. The Treasury’s FAQ 17.6 provides six conditions, of which an interagency agreement must satisfy a minimum of four conditions, to constitute an obligation.
To meet the obligation definition, the interagency agreement must satisfy one of the following conditions:
A1. It imposes conditions on the use of funds by the agency, department, or part of government receiving funds to carry out the program;
A2. 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
A3. It governs the procurement of goods or services by one agency, department, or part of government from another.
And the Agreement also satisfies each of the following conditions:
B1. It sets forth specific requirements, such as a scope of work and project deliverables;
B2. It is signed by the parties to the agreement, or otherwise evidences that each party has assented to the agreement; and
B3. 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 sections of this report.
A1. Imposes conditions on the use of funds by the agency, department, or part of the government receiving funds to carry out the programs
The Department seeks to improve certain essential County facilities, including but not limited to, County parks that will improve the safety and accessibility at various park locations, encourage residents to participate in outdoor recreational activities, and promote physical wellness, which will mitigate the impacts in many communities that were negatively impacted by the extended closures due to the COVID-19 pandemic. The Department also seeks to make necessary investments in water infrastructure projects that meet the eligibility of Clean Water State Revolving Fund or Drinking Water State Revolving Fund consisting of the Liberty Cemetery - Reclaimed Water Project, Elkhorn Facility - Water and Sewer Projects, Turnout on Friant-Kern Canal, Raisin City Water Well, CSA43W and infrastructure improvement within CSAs and WWDs.
The recommended agreement imposes conditions and requirements on the Department by the CAO for the use of the ARPA-SLFRF funds. The CAO, as the ARPA coordinator for the County, is responsible for the administration of the ARPA-SLFRF programs throughout the County and ensuring that each subrecipient and department complies with the terms of their awards. Each Department Program is described in detail in the attached exhibits of the recommended Agreement, all improvements must be completed to the satisfaction of the CAO, and the CAO shall make the final determination whether the Department has satisfied its obligations under the recommended Agreement. In conjunction with the CAO, the Department will be responsible for securing funding, accounting for expenses, and managing the completion of the Program described in the recommended Agreement.
B.1. Sets forth a Scope of Work and project deliverables
The recommended Agreement establishes a scope of work and project deliverables for each Program that will be funded by ARPA-SLFRF.
Your Board previously approved ARPA-SLFRF allocations to the Department in the amount of $8,685,275 to be used by the Department to carry out programs that are responsive to the public health emergency or negative economic impacts due to the pandemic, including:
1. Improvements to County Parks - $3,000,000
2. Improvements to El Porvenir, CSA 30 - $400,000
3. Improvements to Tenaya Park, CSA 2 - $400,000
4. Improvements to Raisin City Park, CSA 43 - $400,000
5. Improvements to Kearney Park - $4,485,275
This will permit the Department to plan and design each park, purchase, and installation of equipment, and make necessary accessibility improvements. Each park Program deliverable includes, but is not limited to, the following: installing a prefabricated shelter, prefabricated restroom with necessary utilities, installation of a new septic tank and leach line system, concrete walkway, a parking stall compliant with ADA, park lighting, and ADA-compliant tables and playground structure.
The approved allocations for Kearney Park will improve accessibility, and vehicle and pedestrian circulation within the park facility. The deliverables for this Program include, but are not limited to, installing a prefabricated picnic shelter, an ADA-compliant prefabricated restroom, playgrounds, constructing accessible parking stalls, concrete walkways for pedestrians, converting the existing tennis court to a multi-purpose sports court for basketball, tennis and pickleball, installing fencing, park lighting, surveillance cameras, and adding signage throughout the park to improve pedestrian safety and traffic orientation.
Your Board also previously approved ARPA-SLFRF allocations to the Department in the amount of $14,950,000 to be used by the Department to carry out programs that will make necessary improvements to water infrastructure, including:
1. Liberty Cemetery - Well Pump, Irrigation and Reclaimed Water Project - $250,000
2. Elkhorn Facility - Water and Sewer Projects - $1,500,000
3. Elkhorn Recharge Facility - $6,000,000
4. Turnout on Friant-Kern Canal at Big Dry Creek - $2,500,000
• Under the recommended agreement, $574,500 will remain allocated to the Department for design engineering, planning, environmental review, right-of-way, permitting, and project management completed by County staff and consultants. The remaining $1,925,500 of SLFRF funds will be allocated to FID for the construction phase of the project through a separate subrecipient agreement presented to your Board on November 5, 2024.
5. Raisin City Water Well, CSA43W - $2,000,000
6. Water meter improvements and replacement in CSAs and WWDs - $1,900,000
• This construction contract was awarded by your Board on June 4,2024
7. Riverview Subdivision-Water Distribution Improvements - $800,000
• This construction contract was awarded by your Board on September 10, 2024
The water meter replacements Program consists of replacing and programming County furnished meters encoders, installing and programing County furnished endpoints, replacing water meter box lids, and replacing meter bodies with associated plumbing and water meter boxes as necessary. The work will be completed in these areas: CSAs 10, 10A, 31C through 31G, 34A, 34B, 34C, 34D, 34G, 39AB, 43W, 44C, 44D, 47, 49 and WWDs 37, 38, 40, 41, and 42. Allocation for new water meters and facility improvements at CSA 44C was also approved, and the deliverables for this Program consist of replacing the existing aging water storage tank and related equipment for the water distribution system for the purpose of supplying potable water for the community.
B.2 The Agreement is signed by the Parties
The recommended Agreement has been signed by the CAO and the Department. Your Board’s approval will memorialize the CAO and the Department’s responsibilities and commitments 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 the CAO and the Department’s commitments to complete the Program.
The attached Agreement includes the most current scopes, costs, and schedule for each Department Program. The Department’s ARPA-SLFRF Program will be completed by December 31, 2026.
REFERENCE MATERIAL:
BAI #51, September 10, 2024
BAI#42, June 4, 2024
BAI #41, April 25, 2023
BAI #66, December 13, 2022
BAI #64, December 13, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Interdepartmental Agreement
CAO ANALYST:
George Uc