Receive update on American Rescue Plan expenditures and closeout plan, delegate authority to staff to extend or make other minor modifications to existing American Rescue Plan contracts, reallocate remaining American Rescue Plan funding of $511,687.04, and provide any additional feedback including the potential to apply the revenue recovery mechanism to all remaining funds. (No general fund impact) (Brazil/Tengolics) (Est. Time: 5 min) 

At the June 4, 2024 Board of Supervisors meeting, the Board delegated authority to the County Administrator and Chief Financial Officer to determine administrative actions to safeguard ARP Funds in advance of the December 31, 2024 obligation deadline.   

These administrative actions were informed by updated guidance from the Department of Treasury which provided several additional tools to obligate ARP funds. First, the guidance clarifies that interagency agreements or MOUs between departments constitute an obligation. This would allow the County to develop agreements between departments in order to meet the obligation deadline for internal projects such as Crisis Now. Second, the guidance allows ARP funds to be used to cover personnel costs between January 1, 2025 and December 31, 2026 as long as the positions were established and filled prior to December 31, 2024. Finally, the guidance provides that ARP funds may continue to be spent on certain legal and administrative costs associated with ARP funds, such as meeting reporting requirements, Single Audit costs, reviewing and processing invoices, and subrecipient monitoring.  While this guidance allows for a variety of methods to avoid reversion, staff remains concerned with the potential administrative complexity of the guidance. As such, upon staff’s recommendation, the Board approved the following action:  

Delegate authority to the County Administrator and Chief Financial Officer to determine administrative actions to safeguard ARP Funds and engage in any of the following actions as appropriate, effective November 1, 2024, and with contemporaneous notice to the Board, to all unexpended funds: 

Attached to this staff report (Attachment A) is the updated ARP allocation summary which now includes the anticipated administrative mechanism by which staff would obligate ARP funding for its Board-approved purpose/project in advance of the December 31, 2024 obligation deadline. Staff has begun to take initial actions to move forward with the closeout plan as described in Attachment A, including requesting final invoices from partners and drafting internal MOUs for funds allocated internal to the County (staff will also be drafting a global internal MOU to capture any potential remaining funds should any projects come in under budget). Staff is also recommending the Board delegate authority to the County Administrator and Chief Financial Officer to extend or make other minor modifications to existing American Rescue Plan contracts to ensure continuity of services and close out projects accordingly. Through this closeout approach, it is anticipated that approximately $4 million would be subject to the revenue recovery mechanism; the Board-approved use of these funds would not change. 
 
Alternatively, the Board could direct staff to apply the revenue recovery mechanism to all remaining funds, totaling approximately $9.6 million. Doing so would end the County’s reporting obligation to the U.S. Treasury. However, this option entails more administrative complexity and may present additional audit complexities.
 
Through the ARP closeout process staff has identified $511,687.04 available for reallocation as summarized in Attachment B, much of which is due to projects coming in under budget. Staff recommends $10,000 be used to cover an overage in the Yolo County Farm to School project with the revenue recovery mechanism being applied to the balance of these funds and then used for County expenditures given the significant fiscal headwinds facing the County.  
 
Finally, the most recent quarterly and/or final project reports are included as Attachment C. To date, $21,510,751.11 has been expended; when combined with the $7,746,268.00 that has been designated as revenue recovery funds, the total ARP funds expended increases to $29,257,019.11 approximately 68.3% of the $42.8 million Yolo County received through ARP.