City of Sacramento
City Council - 5PM Report
915 I Street Sacramento, CA 95814
www.cityofsacramento.org
File ID: 2022-01786 3/7/2023 Consent Item 20.
First Amendment to American Rescue Plan Act (ARPA) Grant Agreement with United Way California Capital Region (UWCCR) for expansion of the Direct Investment Program in Sacramento (DIPS) Guaranteed Income (GI) Program (City Contract #2022-0678) File ID: 2022-01786
Location: Citywide
Recommendation: Pass a Motion authorizing the City Manager or the City Manager’s designee to execute a first amendment to the American Rescue Plan Act Grant Agreement with the United Way California Capital Region for the Direct Investment Program in Sacramento Guaranteed Income (GI) Program (City Contract #2022-0678) to reflect a revised Program implementation timeframe.
Contact: Amy Williamson, Financial Empowerment Manager, 916-808-1046, [email protected]; Leslie Fritzsche, Community Investment Manager, (916) 808-5450, [email protected], City Manager’s Office of Innovation & Economic Development
Presenter: None
Attachments:
1-Description/Analysis
2-First Amendment to ARPA Grant Agreement with UWCCR
Description/Analysis
Issue Detail: On September 14, 2021, City Council adopted the Mayor’s proposed ARPA Framework and Funding Priorities and directed the City Manager, City Attorney, City Auditor, City Treasurer, and City Clerk to implement City Council direction consistent with the adopted ARPA Framework. This Framework included a $750,000 line item to expand the Guaranteed Income (GI) pilot program launched in 2021 and managed by United Way California Capital Region. This allocation is consistent with federal ARPA guidance for responding to the negative economic impacts of the COVID-19 public
File ID: 2022-01786 3/7/2023 Consent Item 20.
health emergency by providing assistance to impacted households, in particular under Expenditure Category 2: Negative Economic Impacts: Assistance to Households: Cash Transfers (U.S.
Department of Treasury Compliance and Reporting Guidance, State and Local Fiscal Recovery Funds).
On October 19, 2021, City Council adopted Resolution No. 2021-0313, which authorized the City Manager or City Manager’s designee to accept $112.2 million of American Rescue Plan Act of 2021 (ARPA) funding; establish the ARPA Reinvestment Fund (Fund 1003); and allocate $112.2 million of ARPA funds to provide government services and budget the resulting available resources in the ARPA Reinvestment Fund to assist with the recovery and reopening resulting from the impacts of COVID-19.
UWCCR launched the DIPS GI program in June 2021 under a model that has been providing 100 households in Sacramento County with $300 of unconditional income every month for 24 months. On June 21, 2022, in keeping with its actions described above, Council authorized the City Manager to execute an American Rescue Plan Act Grant Agreement with UWCCR (City Contract #2022-0678) (the “Agreement”) for use of the $750,000 allocation to fund an expansion in which an additional 80 households would receive up to $500 of unconditional income every month for 12 months. Income eligibility for new participating households was set to be within the bounds allowed by federal ARPA guidance, as specified in the approved contract. The Agreement also contains provisions for UWCCR to contract with California State University, Sacramento (CSUS) for evaluation of the Program.
Subsequent to Council approval of the Agreement, the State of California (through the California Department of Social Services) released a grant opportunity for guaranteed income programs.
UWCCR requested permission to delay implementation of the work in the Agreement to apply for those funds, and staff from both Mayor/Council and City Manager’s Offices agreed to this delay to allow for the possibility of a larger expansion. However, the state agency chose not to award grant funds to UWCCR, and an appeal filed by UWCCR to that decision was denied in January 2023.
UWCCR is now ready to implement the expansion as originally planned, but a timeline shift to the Agreement is necessary to govern the new implementation plan. The attached First Amendment also reflects a minor modification to the Salary line item in the budget but the total for the line item will not change.
UWCCR has secured $1 million in additional funding from Sacramento County Districts 1 and 2 to add 120 more participants to the pilot expansion. This will not cause any deviations from the planned use of City ARPA funds as specified in the Agreement.
Policy Considerations: Sacramento’s low-to-moderate-income households continue to be particularly impacted by the COVID-19 public health emergency. The use of ARPA funds to support the growth of local GI programs is consistent with both City Council’s adopted ARPA Framework and Funding Priorities and with ARPA guidelines.
File ID: 2022-01786 3/7/2023 Consent Item 20.
Economic Impacts: In keeping with UWCCR’s experience in its first phase of DIPS, as well as research done on other GI programs in California and across the U.S., it is anticipated that economic impacts will include: 1) Increased rates of participants working one stable full-time job and experiencing decreased income volatility; 2) Doubling the percentage of participants capable of spending cash or cash equivalent for an unexpected $400 expense; 3) Increased ability to meet their own self-defined personal finance goals due to receipt of GI payments.
Environmental Considerations:
California Environmental Quality Act (CEQA): The proposed actions are not a project under CEQA because they relate to government fiscal activities that do not involve any commitment to a specific project which may result in a potentially significant physical impact on the environment. (Cal. Code Regs., tit. 14, §§15060(c)(3), 15378(b)(4)).
Sustainability: Not applicable.
Commission/Committee Action: None.
Rationale for Recommendation: This amendment will allow for timely implementation of the Agreement already approved by Council in June 2022. Staff will work closely with UWCCR representatives to ensure an effective pilot expansion.
Financial Considerations: The $750,000 allocated for the GI Program were transferred from the ARPA Reinvestment Fund (Fund 1003) to the ARPA Youth and Workforce Training Project (I02612020) after the initial Council approval of the Agreement. The first payment of $120,000 for guaranteed income participant payments was made to UWCCR in July 2022, and they have been holding it during this delay. It will be used starting in July 2023 in keeping with the new program timeline. There is sufficient funding in ARPA Youth and Workforce Training Project (I02612020) to fund the balance of the contract.
Local Business Enterprise (LBE): Not applicable.