DATE: SEPTEMBER 24, 2024
DEPARTMENT: FINANCE
FROM: RENE MENDEZ, CITY MANAGER
BY: JIM PIA, ASSISTANT CITY MANAGER
SELINA ANDREWS, ACTING FINANCE DIRECTOR
ABE PEDROZA, SENIOR FINANCE MANAGEMENT ANALYST
TITLE: AMERICAN RESCUE PLAN ACT (ARPA) PROJECTS UPDATE
RECOMMENDATION:
A motion to approve a resolution delegating authority to the City Manager to reallocate American Rescue Plan Act funding between various programs and projects previously approved by City Council.
EXECUTIVE SUMMARY:
The recommendation provides authority to reallocate funding between ARPA projects in accordance with the U.S. Treasury Department regulations to mitigate the risk of not having funds encumbered by the December 31, 2024, deadline. The recommended action will not impact any services or projects previously authorized by the City Council and will result in the obligation of all ARPA Funds prior to the deadline.
BACKGROUND:
On March 11, 2021, President Biden signed the American Rescue Plan Act, which provided the City with $51,567,313 in relief funds. These additional resources have provided critical community and economic recovery support.
ARPA requires that local governments obligate all ARPA funds (e.g., encumber funding through the issuance of contracts/purchase orders) by December 31, 2024, and to expend all ARPA funds by December 31, 2026. Due to this timeline, a number of the community and economic recovery workstreams were anticipated to be spent over a multi-year period. Of the $51.6 million initially received ARPA funding, a remaining amount of $25.6 million is included in the FY 2024-25 Budget. While the City has made considerable progress in this effort, a total of $12,682,496.37 remain unencumbered as of September 2024 as detailed below.
Dept
Project
Original Budget
Approved Amend
Amended Budget
Actuals to Date
FYTD 24-25 Enc
Remaining
% Used
CD
3220 SHARE
Center
1,000,000
-
1,000,000
1,000,000
-
-
100%
CD
8161 Chinatown Navigation Center
1,000,000
-
1,000,000
775,058
212,528
12,414
99%
CD
8162 Homeless Motel Program
3,000,000
-
3,000,000
2,122,494
-
877,506
71%
CD
9021 Housing Production Fund
7,000,000
-
7,000,000
5,800,303
268,794
930,903
87%
CD
9181 Downtown Streets Team
600,000
-
600,000
388,396
215,996
(4,392)
101%
Fire
9235 Fire Station Renovations
1,500,000
-
1,500,000
427,132
9,407
1,063,461
29%
Fire
9541 Fire Station Repairs
1,400,000
-
1,400,000
89,488
119,100
1,191,413
15%
PW
8170 City Hall / Facility HVAC
5,002,313
2,000,000
7,002,313
4,357,248
2,954,968
(309,903)
104%
PW
8180 Street Repair & Traffic Safety
6,000,000
-
6,000,000
4,272,224
1,073,281
654,494
89%
PW
8190 Sewer System Work
4,620,000
354,539
4,974,539
200,240
638,653
4,135,645
17%
PW
8192 Stormwater Green Infra
3,000,000
(230,678)
2,769,322
911,181
1,008,129
850,011
69%
PW
9086 Natividad Creek Silt
1,545,000
(1,062,000)
483,000
-
332,325
150,675
69%
PW
9293 Stormwater Master Plan
800,000
-
800,000
794,448
5,552
-
100%
PW
9720 Sidewalk & Drainage Impr
6,000,000
-
6,000,000
5,134,942
237,289
627,769
90%
PW
9727 Gabilan Creek Silt
500,000
(61,861)
438,139
236,473
49,394
152,273
65%
LCS
8171 Playground & Closter Park Impr
2,000,000
1,000,000
3,000,000
975,644
259,988
1,764,367
41%
LCS
8191 Park Irrigation Updates
5,000,000
(4,000,000)
1,000,000
406,174
65,028
528,798
47%
LCS
9165 Hebbron Family Center Impr
1,500,000
2,000,000
3,500,000
349,005
3,150,995
-
100%
LCS
9311 Firehouse Rec Center
100,000
-
100,000
34,867
8,071
57,063
43%
TOTAL
51,567,313
-
51,567,313
28,275,317
10,609,499
12,682,496
75%
Over the last few of months, staff developed timelines for all projects and has determined that the reallocation of funding for certain projects is necessary to meet program needs while adhering to the December 31, 2024, encumbrance deadline.
An example of what the reallocation of projects might look like is if any specific project identified in the table above does not get to a point where a contract is in place to allow the funds to be encumbered, the City Manager may look at other projects that already have contracts in place such as Street Repair & Traffic Safety and authorize additional funds to be encumbered there. This will allow for projects to continue moving forward with ARPA monies.
Should the encumbrance deadline not be met, ARPA allows for governments to reimburse themselves for lost revenue due to the pandemic, and then use that revenue to pay for government services. In accordance with regulations provided by the U.S. Treasury Department, the City’s calculated revenue loss (calculated across all eligible City funding sources) exceeds the $12.7 million in unencumbered ARPA allocated across several services and projects. The City may decide to allocate any and all relief funds to this purpose, which would present the opportunity to shift already programmed general fund resources to complete the projects.
While we expect to be able to encumber the funds, we will bring back a report detailing the final results, including any reallocation and/or reimbursement of revenue.
CEQA CONSIDERATION:
Not a Project. The City of Salinas has determined the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).
CALIFORNIA GOVERNMENT CODE §84308 APPLIES:
No.
STRATEGIC PLAN INITIATIVE:
The projects and programs funded by the Salinas Recovery Plan under the American Rescue Plan Act (ARPA) of 2021 achieves the Council 2022-2025 Strategic Goals of Housing/Affordable Housing, Infrastructure and Environmental Sustainability, Public Safety, Youth and Seniors, and Effective and Culturally Responsive Government.
DEPARTMENTAL COORDINATION:
This staff report has been coordinated with the City Manager’s Office, Finance Department, Community Development, Fire, Public Works, and Library & Community Services.
FISCAL AND SUSTAINABILITY IMPACT:
American Rescue Plan Act (ARPA) funding allows the City to move forward with several important projects and programs with no impact on the City’s General Funds. Reallocation of ARPA funds is not being recommended at this time. However, as it gets closer to the encumbrance deadline, the City Manager may need to reallocate funding as necessary to avoid the City losing ARPA monies.
Fund
Appropriation
Appropriation
/Project Name
Total Appropriation
Amount for recommendation
FY 24-25 Operating Budget Page
Last Budget Action (Date, Resolution)*
3911
30.3220
Housing & Com Dev (SHARE)
$1,000,000
$0
n/a
11/16/21,22250
3911
30.8161
Chinatown Nav Center Op
$1,000,000
$0
n/a
11/16/21,22250
3911
30.8162
Salinas Homeless Motel Program
$3,000,000
$0
n/a
11/16/21,22250
3911
30.9021
Housing Production Fund
$7,000,000
$0
n/a
11/16/21,22250
3911
30.9181
Downtown Streets Team
$600,000
$0
n/a
11/16/21,22250
3911
45.9235
Fire Station Renovations
$1,500,000
$0
n/a
11/16/21,22250
3911
45.9541
Fire Station Repairs
$1,400,000
$0
n/a
11/16/21,22250
3911
50.8170
Adapt to City Hall & Fac HVAC
$7,002,313
$0
n/a
11/16/21,22250
12/05/23,22860
04/23/24,22950
3911
50.8180
Street Repair / Traffic Safety
$6,000,000
$0
n/a
11/16/21,22250
3911
50.8190
Sewer System Work
$4,974,539
$0
n/a
11/16/21,22250
08/20/24,23073
3911
50.8192
Stormwater Green Infra
$2,769,322
$0
n/a
11/16/21,22250
08/20/24,23073
3911
50.9086
Natividad Creek Silt Removal
$483,000
$0
n/a
11/16/21,22250
04/23/24,22950
08/20/24,23073
3911
50.9293
Storm Water Master Plan Upd
$800,000
$0
n/a
11/16/21,22250
3911
50.9720
Sidewalk & Drainage Impr
$6,000,000
$0
n/a
11/16/21,22250
3911
50.9727
Gabilan Creek Silt Removal
$438,139
$0
n/a
11/16/21,22250
08/20/24,23073
3911
55.8171
Playground & Closter Park Impr
$3,000,000
$0
n/a
11/16/21,22250
06/18/24,23016
3911
55.8191
Park Irrigation Updates
$1,000,000
$0
n/a
11/16/21,22250
12/05/23,22860
03/05/24,22911
06/18/24,23016
3911
55.9165
Hebbron Family Center Impr
$3,500,000
$0
n/a
11/16/21,22250
03/05/24,22911
3911
55.9311
Firehouse Rec Center
$100,000
$0
n/a
11/16/21,22250
ATTACHMENTS:
Resolution
PowerPoint
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