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TO:

Honorable Mayor and Members of the Common Council

FROM:

Mark Rohloff, City Manager

DATE:

August 14, 2024

SUBJECT:

Res 24-471 Approve Amendment of Terms of Approval for American Rescue Plan Act (ARPA) Funds to Operation DREAM North

BACKGROUND

On July 9, 2024, the Common Council approved a grant in the amount of $126,000 for Operation DREAM North. Their original grant request was for over $275,000, with a project budget that indicated they would also raise $77,000. After I discussed the lower recommended grant amount with Operation DREAM North President Rodney Bourrage, he asked if his fundraising amount could be lowered to $30,000 given the reduced level of the grant. I thought that was a reasonable request and incorporated this reduced amount into the grant award recommendation. In my view, the $30,000 of donations should be viewed as a grant match, and I communicated that intent with Council in my memo recommending the grant.

As Mr. Bourrage and I have been discussing the terms of his contract following the grant approval by Council, he indicated that it was not his expectation to provide that $30,000 as a match for the grant. In fact, Mr. Bourrage had assumed that he would receive the entire $126,000 up front. Future discussions included trying to find a way to provide a slight upfront disbursement of funds, but Mr. Bourrage has indicated that he needs more funds up front in order to begin his fundraising and to begin his program by September 1st. This represents a significant departure from how we have done previous ARPA grants, as well as other federal funds that we have dispersed to community groups, such as our Community Development Block Grant (CDBG) program. Given that I had represented to Council that there would be matching funds, and that there would be no upfront disbursement, I believe that Council should approve the revised conditions.

ANALYSIS

I had asked Mr. Bourrage to provide me with a revised request for disbursement of funds. This request is incorporated into the revised contract and accompanying exhibit that sets the terms of approval for the grant. Operation DREAM North is requesting upfront funds of approximately $74,900. I have amended the proposed grant agreement to allow that initial disbursement, with a subsequent disbursement of the remaining funds after documentation for the initial $74,900 disbursement is received and approved.

As I have previously indicated, this manner of disbursement is a significant departure from what we have done with other grant recipients. If approved, this may set a precedent for other groups with whom we are currently providing drafts of their ARPA agreements. With that said, some of the community groups who have been awarded ARPA funds may be in a different financial situation than other more well-established nonprofit groups, who may have more financial resources to be able to absorb costs until such time as they are reimbursed. As a result, I may be receiving additional requests of this nature and would need to bring those agreements to Council for approval if this amendment is authorized.

FISCAL IMPACT

From a financial accountability standpoint, disbursing funds without prior documentation is a departure from our practices with other grants. If a group approved for upfront distribution of funds fails to provide documentation, after the fact, it may be difficult to recover these funds if they are disallowed per our agreement. This may result in funds being withheld for future disbursements, and may also result in us not having final full documentation for these grants. I want Council to understand the risks that we are running should we award these grants in this fashion.

Attachments

RES 24-471

Operation DREAM North Grant Agreement