DATE: November 5, 2024
TO: Board of Supervisors
SUBMITTED BY: Paul Nerland, County Administrative Officer
SUBJECT: State Local Fiscal Recovery Funds Second Amendment to Subrecipient Agreement with Care Fresno, Inc.
RECOMMENDED ACTION(S):
TITLE
1. Approve and authorize the Chairman to execute a Second Amendment to Subrecipient Agreement No. 23-056 with Care Fresno, Inc. (Subrecipient) 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 ($300,000); 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 reimbursement payable to Subrecipient, and which do not result in any change to the maximum compensation amount payable to Subrecipient.
REPORT
There is no Net County Cost associated with the recommended actions. The recommended second amendment will revise the expenditure plan without changing the scope of work, and revise 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. 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. This item is countywide.
ALTERNATIVE ACTION(S):
If your Board were not to approve the recommended actions, the maximum allocation of ARPA-SLFRF will not become available to help the Subrecipient maximize the use of the award for use in the approved Program. Alternatively, your Board may determine to approve the recommended second amendment without delegating authority to the County Administrative Officer or designee 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 program is 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 private, nonprofit 501(c)(3) organization.
On June 21, 2022, your Board approved the Ad-Hoc Committee’s First Round Subrecipient Priority List (Priority List), which earmarked funds for the proposals that may be funded either in whole or in part by the County’s allocation of SLFRF. The approved Priority List includes Care Fresno, Inc ($300,000) for Youth Programs to under-resourced communities in Fresno County.
On February 7, 2023, you Board approved Subrecipient Agreement 23-056 with Care Fresno, Inc. On September 19, 2023, the County and the Subrecipient entered the First Amendment to the Agreement, which revised the expenditure plan and the modification clause. The modification clause language used at the time of approval of the first amendment allowed for 5% of the award to be authorized by the County Administrative Officer or designee.
Since the approval of the First Amendment to the Agreement, the Subrecipient represents that necessary changes were implemented to the GED Prep meeting schedule to address unexpectedly low attendance, which created a cost savings to the award. The Subrecipient represents that the Care Club Sites have had an increase in demand over their initial projected figures related to labor, which created a budgeting shortfall. Meanwhile the investment for computer technology did not materialize at the scale initially envisioned, which created further cost savings to the award. The Subrecipient also represents that labor costs have increased beyond the initial projections and have created a shortfall in the budget as presented in the expenditure plan. The Subrecipient represented that an internal calculation error was discovered in the award’s expenditure plan that needed correction.
Approval of the recommended actions will revise the expenditure plan for Agreement 23-056 by addressing the issues mentioned above and by removing a multiple year budget, and compressing the budget into a singular budget for the Program through the term set by ARPA.
The Subrecipient represents that the Program would also benefit from a revised Modification Clause within the Agreement to match more recent language in other ARPA agreements, which would help the Subrecipient to recover allowable costs by providing the option to move available funds, up to 10% of the maximum award ($30,000) from one category to another, if needed, to provide flexibility in cost recovery as the Program nears the completion of its contracted term.
Approval of the recommended actions will revise the Subrecipient’s expenditure plan, which will provide needed flexibility to ensure the maximum limits of the grants can be reimbursed to the Subrecipient. Your Board’s approval will also revise the 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.
REFERENCE MATERIAL:
BAI #39, September 19, 2023
BAI #27, February 7, 2023
BAI #7, June 21, 2022
ATTACHMENTS INCLUDED AND/OR ON FILE:
On file with Clerk - Amendment No. 2 to Agreement with Care Fresno, Inc.
CAO ANALYST:
John Toepfer