MEMO TO FILE
TO: City of Richmond, CA., Department of Finance
FROM: Witt O’Brien’s
DATE: 10/21/2024 (Updated)
SUBJECT: Interagency Agreement Strategy for State and Local, Fiscal Recovery Funds
The City of Richmond, CA, intends to utilize interagency agreements (IAAs) to obligate a portion of its State and Local, Fiscal Recovery (SLFRF) funds in preparation for the obligation deadline of December 31, 2024. Per the Treasury FAQ 17.61, IAAs are now an available tool for SLFRF recipients to use a mechanism to obligate funds. This memo will provide the Treasury’s definition of IAAs, IAA requirements, and the City of Richmond’s strategy for utilization of IAAs.
Interagency Agreements and Usage
Interagency agreements are a mechanism through which the Treasury has deemed eligible for SLFRF recipients to obligate their funds. IAAs have specific requirements that must be adhered to when developing, administering, and reporting.
Requirements
Contract Requirements
As outlined in the Treasury FAQ 17.6, there are specific requirements that every IAA must meet to be eligible for receiving and spending SLFRF. IAA must meet one of the following conditions2:
1. it imposes conditions on the use of funds by the agency, department, or part of government receiving funds to carry out the program;
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
3. it governs the procurement of goods or services by one agency, department, or part of government from another.
Also, the agreements must incorporate ALL of the following elements3:
1. it sets forth specific requirements, such as a scope of work and project deliverables;
2. it is signed by the parties to the agreement, or otherwise evidences that each party has assented to the agreement; and
3. it does not disclaim any binding effect or state that it does not create rights or obligations.
1 Treasury FAQ 17.6 can be found on the Treasury website at https://home.treasury.gov/system/files/136/SLFRF- Final-Rule-FAQ.pdf
2 Treasury FAQ 17.6 can be found on the Treasury website at https://home.treasury.gov/system/files/136/SLFRF- Final-Rule-FAQ.pdf
3 Treasury FAQ 17.6 can be found on the Treasury website at https://home.treasury.gov/system/files/136/SLFRF- Final-Rule-FAQ.pdf
MEMO TO FILE
Reporting Requirements
The City of Richmond will be utilizing the revenue replacement allowance to obligate these funds which means it is not necessary to report the IAAs in the Treasury Portal.
Utilization by the City of Richmond
The City of Richmond will enter into IAAs with city departments to formally obligate SLFRF approved by City Council for eligible programs and projects. IAAs will allow selected city departments to use the funds for costs associated with internally run programs and for departments to enter into agreements with third-party contractors and subrecipients to perform certain aspects of the program/project scope of work.
On October 15th, 2024, Richmond City Council officials approved the revised budgets for the remaining SLFRF programs. The City’s Director of Finance reviews, approves, and signs all IAAs. The IAAs will be brought before the Council in a consent agenda to be acknowledged on November 19th, 2024. The council will approve any subsequent contracts and subrecipient agreements entered by the departments after receiving funds through an IAA. The council meeting and agenda are attached in Exhibit 1. Finally, Resolution NO. 116-24 can be found in Exhibit 2.
Obligation Post-Obligation Deadline
This section is a general note, not only for IAAs, but any contracts and agreements that could change after the obligation deadline passes. Allowable ways to adjust the original obligation or reclassify funds can be found in the Treasury sections 17.16 – 17.19. Recipients may adjust contracts in three ways post-obligation:
1. Change orders to an existing contract – This includes cost adjustments. A provision must be in the contract allowing for change orders, and if the contract has a provision allowing to pay for contingencies, SLFRF can be used to pay for cost increases as well.
2. Amending an existing contract – Contracts can be amended so long as the contract remains substantially the same scope and purpose as the original contract.
3. Replacing an existing contract – Contracts may be replaced under three circumstances:
a. Contract terminated due to business default, closure, or inability to perform b. Mutual agreement to terminate
c. Recipient termination for convenience when contract was not properly awarded
Finally, reclassifying funds is possible, as detailed in FAQ section 17.19. In short, recipients will be able to reclassify funds not obligated for its original purpose, but the reasoning has to be documented. Furthermore, the funds need to reclassified for expenses incurred before the obligation deadline of December 31, 2024.
Exhibit List
1. Exhibit 1: 10/15/2024 Richmond City Council Meeting Agenda and Supporting Documentation
2. Exhibit 2: Resolution NO. 116 -24: A RESOLUTION OF THE COUNCIL OF THE CITY
OF RICHMOND, CALIFORNIA, AMENDINC APPROPRIATIONS IN AMERICAN
RESCUE PLAN ACT (ARPA), GENERAL CAPITAL, AND GENERAL FUNDS