City Council Agenda Report
December 3, 2024
TO: Honorable City Council
FROM: Jesus M. Gomez, City Manager
BY: Jana Stuard, Director of Finance/City Treasurer
Jennifer Hernandez, Senior Management Analyst
SUBJECT: RESOLUTION NO. 24-60 – APPROVING AMERICAN RESCUE PLAN
INTERAGENCY MEMORANDUMS OF UNDERSTANDING TEMPLATE
Background:
On March 10, 2021, President Biden signed the American Rescue Plan Act, (“ARPA”) into law.
Included in the ARPA legislation was the State and Local Fiscal Recovery funds, which were purposed to support state and local governments as they navigated through the impacts of the unprecedented COVID-19 pandemic.
Local governments received ARPA funding based on population size from 2019 population data, consistent with the allocation formula used by the U.S. Department of Housing and Urban Development for the Community Development Block Grant Program. As a result, the City of Norwalk received $28,046,746 in ARPA funding. Requirements and eligible uses of ARPA funds were outlined by the U.S. Department of Treasury, detailing the guidelines by which recipients are required to abide by in order to maintain compliance. Using this guide, the City identified 25 projects by which estimated project budgets were developed to account for the entire ARPA amount received.
In addition to identifying eligible uses and requirements, the U.S. Department of Treasury also stipulated strict regulatory timelines for use of ARPA funding, which require all recipients to obligate their funding no later than December 31, 2024, and expend all funds by December 31, 2026. The Treasury defines obligation of funds as an order placed for property and services and entry into contracts, subawards, and similar transactions that require payment. As of the last reporting cycle for the calendar-quarter ending September 30, 2024, the City has obligated $21,760,443 of its ARPA funds, leaving approximately $6.2 million in unobligated ARPA funding.
All obligations and expenditures made to-date have been towards eligible uses and have provided the City with enhanced security technology at parks and City facilities, upgrades to the
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City’s Cable TV programming and Emergency Operations Center, ventilation upgrades at City facilities, support the cost of staff, and the ability to provide streamlined services to the community. Furthermore, due to the impacts to revenues on account of the COVID-19 pandemic, the City utilized $10 million in ARPA funds as revenue replacement in the span of three years.
Revenue replacement funds were used to fund the continuity of the City’s vital services, primarily in Public Safety and daily operations.
Analysis:
To ensure the City meets the obligation deadline of December 31, 2024, staff is recommending the use of Interagency Memorandum of Understandings (“IMOU”). An IMOU is an arrangement between departments and agencies within a recipient’s own government to execute specific projects or deliver services. An IMOU outlines the conditions and sets forth specific requirements each entity must abide by in order to utilize funding accurately. The U.S. Department of Treasury has authorized the use of IMOUs as a means of obligating ARPA funds in order to allow agencies the ability to meet the regulatory obligation deadline.
If approved by the City Council, IMOUs will be entered into between the City and specific departments within the City who have outstanding unobligated ARPA funds and are unable to obligate their funding ahead of the regulatory deadline. Each IMOU will outline the scope of work, timelines, compliance with all applicable regulations regarding procurement, and reporting requirements for each ARPA project and in accordance with ARPA requirements. A summary of departments being recommended to enter into an IMOU with are listed in Table 1 below.
Table 1: IMOU Department Summary
City
Department
ARPA Expenditure
Category Project IMOU Obligation
Amount
Public Health
Project No. 1.7C1219
Enhanced Public
Communication Efforts
$68,283
Communications
Public Health
Project No. 1.7C5219
Cable Equipment
Upgrades
$52,331
Public Health
Project No. 1.7C6219
Emergency Operations
Center Upgrades
$20,586
Public Safety
Public Health
Project No. 1.7C8219
Security & Safety
Improvements at City Hall
$188,607
Negative Economic
Impacts
Project No. 2.15219
Affordable Housing Fund $3,850,475Community
Development Negative Economic
Impacts
Project No. 2.360219
Wayfinding Signage $164,550
Total $4,344,832
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The proposed IMOUs for the projects listed above will obligate approximately $4.3 million of the remaining $6.2 in unobligated ARPA funds. The remaining approximately $1.9 million will be obligated towards the cost of eligible staff time through December 31, 2026.
IMOUs between the City and listed departments above will serve as a means of obligating ARPA funding only, each department is still responsible for implementing and completing their respective projects. Approval of IMOUs will provide City departments with flexibility to procure and implement their ARPA-funded projects without the initial timeline constraints imposed by ARPA regulations.
Fiscal Impact:
The recommended action is for approval of the IMOUs only, any necessary budget adjustments will be incorporated and presented to the City Council for consideration as part of the City’s annual Mid-Year adjustment to account for actual costs through December 31, 2024, and in accordance with ARPA requirements.
Citizens Advised:
N/A
Strategic Plan 2023 Implementation:
The recommended actions will further the City’s 2023 Strategic Plan Goal 3 Create and Sustain a Resilient and Economically Prosperous City.
Recommended Action:
Staff recommends City Council to:
a. adopt Resolution No. 24-60, A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
NORWALK APPROVING AMERICAN RESCUE PLAN INTERAGENCY
MEMORANDUMS OF UNDERSTANDING TEMPLATE; and
b. authorize the City Manager to execute Interagency Memorandums of Understanding between the City and the Communications, Community Development, and Public Safety Departments, on behalf of the City, in forms approved by the City Attorney.
Attachments:
Resolution No. 24-60