DATE: November 5, 2024
TO: Board of Supervisors
SUBMITTED BY: Edward Hill, Chief Operating Officer/Interim Director of Internal Services/Chief Information Officer
Paul Nerland, County Administrative Officer
Steven E. White, Director of Department of Public Works and Planning
SUBJECT: Interdepartmental Agreement, American Rescue Plan Act - State Local Fiscal Recovery Funds, Obligation of Funds
RECOMMENDED ACTION(S):
TITLE
Approve and authorize the Chairman to execute a retroactive Interdepartmental Agreement between the Internal Services Department, County Administrative Office, and Department of Public Works and Planning, which obligates $10,701,183 in American Rescue Plan State - Local Fiscal Recovery Funds to fund the implementation of Heating, Ventilation, and Air Conditioning (HVAC) Improvements at Certain Essential County Facilities ($6,000,000), Generator/Electrical Improvements in Public Facilities ($1,100,000), Communication Improvements for Public Services ($1,500,000), Improvements to Facilities Headquarters ($490,761), and HVAC Systems and Electrical Maintenance and Repairs to Downtown County Public Facilities ($1,610,422), effective April 19, 2022, through December 31, 2026.
REPORT
There is no additional Net County Cost associated with the recommended action, which will authorize the Chairman to execute the Interdepartmental Agreement (Agreement) between the Internal Services Department (ISD),County Administrative Office (CAO), and the Department of Public Works and Planning (PWP) to implement Heating, Ventilation, and Air Conditioning (HVAC) Improvements at Certain Essential County Facilities (up to $6,000,000), Generator/Electrical Improvements in Public Facilities (up to $1,100,000), Communication Improvements for Public Services ($1,500,000), Improvements to Facilities Headquarters (up to $490,761), and HVAC Systems and Electrical Maintenance and Repairs to Downtown County Public Facilities (up to $1,610,422). The recommended Agreement will impose conditions on the use of funds by ISD, govern the provision of American Rescue Plan Act - State and Local Fiscal Recovery Funds (ARPA-SLFRF), and memorialize the departments’ cooperative responsibilities to complete the described projects (Program). Approval of the recommended action will obligate $10,701,183 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 choose not to approve the recommended action, ISD would not be able to complete the procurement process and award the projects described in the Program to contractors to obligate the $10,701,183 in ARPA-SLFRF allocated to the Program before the Treasury’s obligation deadline of December 31, 2024.
RETROACTIVE AGREEMENT:
The recommended Agreement is retroactive to April 19, 2022, to conform with the Obligation IFR.
FISCAL IMPACT:
There is no increase in Net County Cost associated with the recommended action. Sufficient appropriations are included in the FY 2024-25 Adopted Budget for Auditor-Controller/Treasurer-Tax Collector Org. 1033 - Disaster Claiming, Fund 0026, Subclass 91021, ISD-Information Technology Org. 8905, Fund 1020, Subclass 10000, and ISD-Facility Services Org 8935, Fund 1045, Subclass 10000.
Any unbudgeted costs associated with the implementation of each subproject under the Program that exceeds ISD’s allocation of ARPA-SLFRF will be assessed by ISD and accounted for in ISD’s future budgets.
DISCUSSION:
The Treasury’s ARPA performance period for the use of SLFRF began March 3, 2021, and ends on December 31, 2024. The 2022 Final Rule states that recipients, such as the County, must return any funds to the Treasury that are not obligated by December 31, 2024, and any funds not expended to cover such obligations by December 31, 2026. The Treasury’s Title 31, Code of Federal Regulations, Part 35 Coronavirus SLFRF establishes the framework for determining the types of programs and services that are eligible under the ARPA-SLFRF program.
On November 20, 2023, the Treasury published the Obligation IFR, which amended the definition of “obligation” with respect to the ARPA-SLFRF program. Treasury clarified that the obligation deadline applies to the recipients of ARPA-SLFRF, and a cost is considered to have been incurred once a recipient enters a subaward, contract, or similar transaction that require payment.
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 requirements through interagency agreements for the purpose of ARPA-SLFRF. The Treasury’s FAQ 17.6 provides six conditions, of which an interagency agreement must satisfy a minimum of four conditions, to comply with 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 the interagency agreement 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 recommend Agreement satisfies five 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
ISD seeks to implement HVAC Improvements at Essential County Facilities, which include but are not limited to, up to 15 Fresno County public libraries, the Plaza, the Hall of Records, Juvenile Justice Campus (JJC), and other similar public facilities. ISD also seeks to upgrade or replace the emergency electrical systems at the Department of Public Health (DPH) facility located at 1221 Fulton Street, to purchase and install a radio tower, and associated equipment at the Reedley PWP Road Maintenance and Operations yard facilities, to make necessary repairs to the Facilities Headquarters, and to implement necessary ventilation design and engineering improvements, inspections, maintenance and repairs to HVAC systems, as well as generator and electrical maintenance and repairs to emergency generators, at Downtown County Public Facilities, which include but are not limited to, the Plaza Building, Hall of Records, South Annex Jail, and Sheriff’s administration building, and other similar public facilities.
The recommended Agreement imposes conditions and requirements on ISD 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 subrecipients (including County of Fresno departments) comply with the terms of their awards. Each project 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 ISD has satisfied its obligations under the recommended Agreement. In conjunction with the CAO, ISD will be responsible for securing funding, accounting for expenses, and managing the completion of the Program.
ISD-Facilities may retain job order contractors in completion of this Program.
A.2. Governs provisions of funds from one agency, department, or part of government to another, to carry out the Program
The recommended Agreement establishes requirements for the provision of ARPA-SLFRF funds from ISD to PWP for work completed by PWP pursuant to the scope of services. ISD, in coordination with PWP, seeks to purchase and install a radio tower, and associated equipment, at the Reedley PWP Road Maintenance and Operations Yard facilities. ISD is responsible for securing funding, accounting for expense, and managing the completion of the Program, in cooperation with PWP. PWP will help ISD with this Program by engineering the building, coordinating with contractors to provide engineering services for electrical and mechanical systems, as well as geotechnical engineering investigations, and coordinate the project bid and vendor assignment for construction. PWP will make sure that ISD provides approval before implementation or coordination of any work with the contractors.
B.1. Sets forth specific requirements, such as a Scope of Work and project deliverables
The recommended Agreement establishes a scope of work and project deliverables for each project that will be funded by ARPA-SLFRF.
On April 19, 2022, your Board approved ARPA-SLFRF funding to fund the modernization of HVAC units at Certain Essential County Facilities serving the public which include, but are not limited to, up to 15 Fresno County public libraries, the Plaza, the Hall of Records, JJC), and other similar public facilities. This would permit ISD to prepare facility condition assessments, purchase, install, and make necessary ventilation improvements to address major capital investment needs, and replace existing HVAC systems, which would allow ISD to improve the effectiveness of indoor/outdoor air exchange and improve air-quality and ventilation systems in congregate areas for employees and for the visitors of those public facilities. Ventilation improvements project deliverables will include, but are not limited to replacing package units, air handlers, cooling towers, and chillers, the initial design of a chiller plant, updating automation controls for air-intake systems, and other HVAC-related improvements, or other expenses for parts, plans, or services needed to accomplish the Program. ISD will use available funds to improve the ventilation systems to as many locations as possible, under the direction of the CAO.
Additionally, your Board approved ARPA-SLFRF funding to upgrade and/or replace the emergency electrical systems (back-up power sources) at the DPH facility. Upgrading the existing back-up power sources for this critical County facility would address capital investment need, will allow for continued delivery of critical public services, protect properties and data systems during emergencies, and improve the County’s resiliency during power grid failures in the area. The project deliverable includes the replacement of the current back-up power source, which includes, but is not limited to the following tasks: engineering for temporary generation interconnections, a study and recommendations for the staging area for the temporary generator, electrical system interconnections with the automatic transfer switch and engineer modifications for the existing electrical system, structural calculations for the new equipment attachment, site surveying, plans submittal, review and approvals, and any additional schematic design, design development, construction documentation, or bidding and construction administration, or other expenses for parts, plans, or services needed to accomplish the Program.
On May 3, 2022, your Board approved ARPA-SLFRF funding to purchase and install a radio tower and associated equipment at the Reedley PWP, Road Maintenance and Operations yard facilities. The deliverable for this project is a radio tower constructed to an approximate height of 250-feet, alongside an approximate 1000 square-foot telecommunication shelter. It will be designed to enhance communication coverage in the rural areas of the County for public safety and first responders such as Sheriff, Fire, PWP, and PWP. The new radio tower is a key capital investment that will expand the County’s wireless communication and improve voice and data communication signals for first responders’ mobile devices. ISD has retained the assistance of PWP to provide design and engineering, and to award this project to a contractor. The Program shall use a combination of a contractor and County staff labor to complete the project until all funds for the Program are expended. Separate items were brought before your Board on September 24, 2024, to award this project, and on October 8, 2024, to amend the original scope of the ARPA-SLFRF funding.
On October 10, 2023, your Board approved ARPA-SLFRF funding to fund necessary repairs on a public building that functions as the County's maintenance hub/shop, provides storage of materials and equipment, and serves as the primary workplace for essential employees who are deployed to help departments address maintenance, repairs, and janitorial services in County-owned and leased facilities. The funding would allow for the replacement of the roof and supporting systems at Facilities Headquarters to support new HVAC units, as well as help mitigate water intrusion to the building, which will improve the HVAC system’s ability to circulate and sanitize air flow through the ventilation system and mitigate pest intrusion to the building. The project deliverable is a new roof and gutter systems at the County’s maintenance hub/shop.
On June 18, 2024, your Board approved ARPA-SLFRF funding to be reallocated from one ISD project to another, to fund necessary ventilation design and engineering, improvements, inspections, maintenance, and repair to the HVAC systems, as well as generator and electrical maintenance and repairs to emergency generators to downtown public facilities which include but are not limited to, the Hall of Records, Plaza Building, South Annex Jail, and Sheriff’s Office, and other similar public facilities. The scope for the HVAC systems which include, but are not limited to, renting two temporary 150-ton chillers and respective cabling, removing and replacing a faulty drive, replacing piping, installing new grease zerks, replacing the fill/media, and performing other diagnostic and essential repairs, or other expenses for parts, plans, or services needed to accomplish the HVAC portion of the Program. Project deliverables for this portion of the project include restoring proper cooling and ventilation to the Hall of Records, South Annex Jail, Sheriff’s administration office, and any similar public facilities. The scope for the generator and electrical maintenance includes, but is not limited to renting a 500kw diesel generator, performing diagnostic testing including an engine flush, replacing the water pump and thermostat, performing load bank studies, ordering necessary parts, and completing any other necessary repairs, or other expenses for parts, plans, or services needed to accomplish the generator and electrical portion of the Program. Project deliverables for this portion of the project include taking all necessary steps to restore the current generator so it is operating appropriately, which can include, but is not limited to diagnostics, replacing and upgrading parts within the generator, or replacement of the generator to ensure that the Plaza Building has an operational backup generator.
B.2 Is signed by the parties to the Agreement, or otherwise evidences that each party has assent to the Agreement
The recommended Agreement has been signed by the participating departments. Your Board’s approval will memorialize the departments’ 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 departments’ commitments to complete the Program.
REFERENCE MATERIAL:
BAI #38, October 8, 2024
BAI #42, September 24, 2024
BAI #50.1, June 18, 2024
BAI #53, October 10, 2023
BAI # 38, May 3, 2022
BAI #39, April 19, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Interdepartmental Agreement
CAO ANALYST:
Ahla Yang