CITY OF POMONA
COUNCIL REPORT
May 16, 2022
To: Honorable Mayor and Members of the City Council
From: James Makshanoff, City Manager
Submitted By: Andrew Mowbray, Finance Director/City Treasurer SUBJECT: UPDATE ON THE AMERICAN RESCUE PLAN (ARP) AND AMENDMENT OF THE FY 2021-22 OPERATING BUDGET RECOMMENDATION: It is recommended that the City Council take the following actions:
Adopt RESOLUTION NO. 2022-67 (Attachment No. 1) – A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF POMONA, CALIFORNIA, APPROVING AN UDPATE TO THE CITY OF POMONA’S EXPENDITURE PLAN FOR THE CORONAVIRUS STATE AND LOCAL FISCAL RECOVERY AMERICAN RESCUE PLAN (ARP) FUNDS ALLOCATED FROM THE UNITED STATES FEDERAL GOVERNMENT DEPARTMENT OF TREASURY AND Amending the Fiscal year (FY) 2021-2022 City Operating Budget to increase revenue estimates and appropriations in the amount of $106,000 FROM THE AMERICAN RESCUE PLAN (ARP) FUND Receive and file a status update of ARP FY 2021-22 Appropriations and FY 2022-23 Proposed Budget Appropriations Review and approve the Proposed ARP Agreements as listed below:
ARP Grant Agreement Between the City of Pomona and Businesses and Non-Profits ARP Grant Agreement Between the City of Pomona and Individuals ARP Subrecipient Agreement
Award a three-year agreement to Hinderliter de Llamas Associates (HdL) ECONSolutions to develop and administer a specific business assistance program but also be available to provide additional ARPA related assistance as needed in an aggregate amount not to exceed $91,000 for three (3) years, with one (1) one-year renewal option.
Authorize the City Manager or designee, to execute the agreement and any subsequent amendments.
EXECUTIVE SUMMARY: In response to the COVID-19 public health crisis, the U.S. passed the American Rescue Plan (ARP) Act on March 11, 2021. This assistance programs provided needed relief to state, local and Tribal governments to enable them to continue to support the public health response and lay the foundation for a strong and equitable economic recovery. The City was allocated $45.37M in ARP funds. The Mayor and City Council provided direction and proposed a specific plan to allocate the $45.37M of the ARP funds. To date, $17.2M has been appropriated of the $45.37M. As part of this action $15k more will be appropriated for District 2 Microgrant program and $91k will be appropriated for HdL’s contract in administering the business assistance program. An additional $13.9M will be appropriated in the FY 2022-23 Proposed Budget (scheduled to be adopted on June 6, 2022). As the US Treasury guidelines for the ARP are complicated and detailed (Attachment No. 5 and 6), it is important that City ensures that the ARP funds are spent according to the US Treasury guidelines. The important areas to ensure spending is documented include addressing subrecipients, beneficiaries, and business/non-profits. With the assistance of Best Best and Kreiger (BBK) the proposed agreements (Attachments No. 2,3, and 4) have been formulated to assist that any ARP money spent in these areas, but specifically to provide guidelines for those funds that are detailed in the ARP expenditures spending when money is awarded to any subrecipient or beneficiary. Finally, this report requests the approval to award an agreement to Hinderliter de Llamas Associates (HdL)) ECONSolutions to develop and administer a specific business assistance program but also be available to provide additional ARPA related assistance as needed for three (3) years, with one (1) one-year renewal option. This will enable the City to utilize the program as per the US Treasury Guidelines all ARP funds must be allocated by December 2024 and spent by December 2026.
FISCAL IMPACT: The adoption of Resolution No. 2022-67 will amend the FY 2021-22 Operating Budget by increasing revenue estimates and appropriating $106,000 in the American Rescue Plan Fund (account 191-0202/0101-52285-00000 and 191-0202/0101-40875-00000). Several appropriations in the City Council approved expenditure spending plan will be included in the FY 2022-23 operating budget. To date, $17.2M has been appropriated of the $45.37M. As part of this action $106k more will be appropriated for District 2 Microgrant program ($15k) and HdL contract ($91k). In addition, $13.9M will be appropriated in the FY 2022-23 Proposed Budget (scheduled to be adopted on June 6, 2022).
PREVIOUS RELATED ACTION:
On June 7, 2021 as part of the FY 2021-22 adopted budget, $6.8M was budgeted in the General Fund for potential revenue loss and accepted the $45.37M of the ARP funds allocated to the City of Pomona by the US Treasury.
On August 9, 2021 an ARP study session was held, and discussion occurred regarding uses that will be eligible. The Mayor and City council provided direction and suggested a specific plan to allocate the $45.37M of the ARP funds.
On September 20, 2021 the Mayor and City Council approved the $45.37M City of Pomona ARP Expenditure Plan.
On November 15, 2021 as part of the FY 2021-22 1st Quarter, update to the Expenditure Plan was approved and $2.07M of ARP funds were appropriated for one-time payments included in the respective bargaining unit agreements.
On December 6, 2021the City Council approved appropriation of $6.9M of ARP funds for capital improvement projects – Park Restroom Construction Replacement, Mission Blvd Rehabilitation (White Ave to Towne Ave), and Garey Ave Rehabilitation (Aliso Street to Monterey Ave).
On December 20, 2021 an ARP Sub-committee consisting of the Mayor, and two (2) council members to assist with the process to appropriate the ARP funds for the specific programs and projects as set forth in the City Council approved ARP spending plan was formed.
On February 28, 2022 an update to the ARP Spending Plan was approved to transfer $544,901 for City support related to the pandemic.
On April 18, 2022 the City Council approved ARP appropriations of $370k for Buena Vista Avenue Rehabilitation – Mission Blvd to 9th Street and $500k Philadelphia Street Rehabilitation – San Antonio Avenue to East City Limit.
DISCUSSION:
District 2 Microgrant Program
The city has been actively seeking proposals for community-based programming and free classes, to be offered to Pomona residents of various ages, throughout Council District 2. Funded with microgrants, using ARPA funds, these programs will be provided through park sites and other community spaces in District 2. To date, six (6) microgrants have been received and reviewed for funding. The agreements proposed in this report can be utilized for this programming using ARP funds.
Update regarding the City of Pomona American Rescue Plan (ARP) Spending plan Of the $45.37M allocated to the City by the US Treasury, half of the allocation in the amount of $22.7M million was received on May 19, 2021, and the balance is anticipated to be provided in May 2022. The U.S. Treasury issued the Final Rule with guidance on the funding allocation methodology, distribution process, and reporting requirements in January 2022. ARP funds must be obligated by December 31, 2024 and expended no later than December 31, 2026. The City has discretion to use the funds in ways to meet the needs of the community if the use fits into one of the following categories:
Public Health and Economic Impacts
Provide premium pay for essential workers
Replace public sector lost revenue
Invest in water, sewer, or broadband infrastructure
The expenditure plan was last discussed at the February 28, 2022, City Council meeting. With the requested appropriation of $106k of ARP funds, staff would like to provide an updated Expenditure spending plan with some brief updates on each line. The table below captures the programs, projects, and commitments that the Mayor and City Council have approved to date. Also based on feedback from the US Treasury guidelines, some of the tiles of the respective categories need to be updated and suggested titles have been provided.
ARP FY 2021-22 Appropriations and FY 2022-23 Proposed Budget Appropriations To date, $17.2M of ARP has been appropriated. Included in the FY 2022-23 Proposed Citywide Budget are an additional $5M in ARP appropriations for Mayor and City Council allocations to fund various CIPs within their districts and grants/contracts/programs with non-profit subrecipients, as well as a $3.3M funding for Holt Avenue (West) Reconstruction project, additional funding of $4.8M for Garey Avenue Rehab – Aliso to Monterey, $125k for Westmont Park Community Center Entryway Trellis and $550k for assistance to National CORE affordable housing project.
Appropriations that staff anticipate to be budgeted during FY 2022-23 (ARP funds need to be allocated by December 2024 and spent by December 2026) once programs are formalized include $5M for Universal Household Grant, $1.9M for Small Business Grants, $1M for Economic Support Related to the Pandemic, $1.6M for Health and Wellness Activities, $1M for Technology Upgrade, Leadership Development, and Operational Efficiencies, and $2M for Participatory Budget on ARP eligible programs.
ARP Agreement for: (1) Businesses and Non-Profits, (2) Individuals, and (3) Subrecipients Under ARP, the City may provide grants to Beneficiaries and/or Subrecipients to mitigate the impacts of the COVID-19 pandemic. The US Treasury has defined Beneficiaries to include individuals, households, 501(c)(3) or 501(c)(19) non-profit organizations, small business and impacted industries that experienced public health or negative economic impacts as a result of the COVID-19 pandemic and is the end user of the program or service created with the ARP funds. In addition, the City may grant subawards to subrecipients, who uses the ARP funds for the furtherance of an ARP eligible program or service. Attachments 2, 3, 4 and Exhibit A, are the Proposed ARP Beneficiary Agreement for Business and Non-Profits, ARP Beneficiary Agreement for Individuals, ARP Subrecipient Agreement, and ARP Beneficiary Checklist. In addition to the agreements, US Treasury “highly recommends” a transparent process be setup. A Process, Policies and Procedures document will be brought to the Mayor and City Council on the June 6th Council meeting. This document is to ensure compliance with the Final Rule 2022-00292.pdf (govinfo.gov) (Attachment No. 5) and US Treasury’s Compliance and Reporting Guidelines SLFRF Compliance and Reporting Guidance (treasury.gov)) (Attachment No. 6). The Federal Government has adopted the Uniform Guidance on how recipients of federal funding can distribute ARP funds and it also imposes requirements on subrecipients including contracting requirements and record keeping, reporting, monitoring and audit requirements. Staff is developing a universal application for grants that would use ARP funds for those eligible uses that Mayor and City Council can utilize for allocations of their funds.
Business Assistance Grant Program – Hinderliter de Llamas Associates (HdL) HdL is well positioned to assist the City of Pomona with developing and administering a Business Assistance Program to provide assistance to local businesses using ARP funds. During the past 1 ½ years, HdL has worked with several cities to deal with the COVID-19 Pandemic and the negative economic impact it has delivered to cities and especially their business communities.
HdL’s scope of work is as follows:
Develop and assist the City in administering a Business Needs Survey to understand the impacts on local businesses from the COVID-19 pandemic.
Utilizing the results of the Business Needs Survey assist the City in designing a Business Assistance Program for Pomona.
HdL recently designed and implemented a successful turnkey Commercial Rent Relief Program for the City of San Leandro and is working towards doing similar programs in Hawthorne, Hercules, Lafayette, Goleta and San Fernando. HdL will use this model to formulate and administer a Business Assistance Program on behalf of the city.
Understanding that the implementation of the ARPA program is a very dynamic process, HdL can provide additional ARPA related services on an as needed basis based upon the hourly rates below and scope of work as agreed upon by the City and HdL.
Approval of this item will award a three-year agreement to HdL ECONSolutions to develop and administer a specific business assistance program but also be available to provide additional ARPA related assistance as needed in an aggregate amount not to exceed $91,000 for three (3) years, with one (1) one-year renewal option.
City Code Section 2-993.2 (8) provides an exception to the formal procurement procedure related to Fiscal and/or Personnel Services. This section of code allows the City to forgo the formal procurement process for fiscal services with approval by either the City Manager or City Council. Due to the complexities of administering the COVID – 19 Relief and Economic Recovery Program and HDL’s experience with administering these funds it is recommended that HDL be awarded this contract using the Fiscal and/or Personnel Services exemption. City staff has reached out to both the Pomona Chamber of Commerce and The Pomona Hispanic Chamber of Commerce regarding their interest to assist HDL with developing and both are interested in assisting with a Business Needs survey.
COUNCIL PRIORITIES & GOALS: This item supports the Fiscal Year 2020-21 City Council Priorities and Goals - Priority #2 Economic Development: Foster economic prosperity through strategic thoughtful commercial and residential development and support for businesses that aligns with the long-term vision of the City, encourages investment by other public and private entities and create jobs.
ALTERNATIVE(S): None
Prepared by:
Andrew Mowbray
Finance Director/City Treasurer
ATTACHMENT(S):
Attachment No. 1 – Resolution No. 2022-67
Attachment No. 2 – ARP Grant Agreement Between the City of Pomona and Businesses and Non-Profits Attachment No. 3 – ARP Grant Agreement Between the City of Pomona and Individuals Exhibit A – ARP Beneficiary Checklist
Attachment No. 4 – ARP Subrecipient Agreement
Attachment No. 5 – US Treasury Final Rule
Attachment No. 6 – US Treasury Compliance and Reporting Guidelines Attachment No. 7 – PowerPoint presentation
Amendment to American Rescue Plan Operating Budget