TO: Board of Supervisors
FROM: Minh C. Tran, County Executive Officer
REPORT BY: Becky Craig, Assistant County Executive Officer
SUBJECT: American Rescue Plan Act Update
RECOMMENDATION
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County Executive Officer requests the following actions regarding the U. S. American Rescue Plan Act (ARPA) allocating approximately $15.8 million:
1. Provide an update on the U.S. Treasury’s Final Rule for State and Local Fiscal Recovery Funds and report that Staff will develop uses for the $10 million of revenue recovery funds to be used for provision of government services under the standard allowance;
2. Discussion and seek direction to expand the County’s FY 2022-23 Master Settlement Agreement (MSA) grant program by $3 million over three years;
3. Discussion and approval of the proposed scope of work for the Child Care Gap Assessment allocating $3 million for investment, including solicitation of a consultant for up to $25,000;
4. Discussion and seek direction on the proximity housing loan and accessory dwelling unit incentive programs and opportunities for investment of $5 million;
5. Approval of and authorization for the County Executive Officer (CEO) to sign an Agreement with the Lake Berryessa Resort Improvement District (District) for the term February 8, 2022 to December 31, 2026 for a maximum of $1,350,000 to finance critical water and wastewater infrastructure projects; and
6. Approval of a budget adjustment increasing appropriations in the ARPA subdivision (Fund 2460, Subdivision 1020050) by $4,826,825 from its available fund balance and transferring to various departments in the General Fund, Health & Human Services Agency Fund, Housing and Homeless Fund, Child Support Services Fund, and the Lake Berryessa Resort Improvement District to reimburse department expenditures for supporting the pandemic response and complete various water and sewer projects. (4/5 vote required)
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EXECUTIVE SUMMARY
Napa County received a federal grant allocation totaling $26.76 million in May 2021 and continues to evaluate how to provide for its local public health response and economic recovery. The Board has an opportunity to elect a standard allowance for revenue recovery, to allocate funds to MSA, to proceed with a childcare gap assessment, learn of housing program opportunities, and amend the budget to reimburse departments for its pandemic response.
PROCEDURAL REQUIREMENTS:
1. Chair introduces item
2. Staff presents information on ARPA
3. Public comment
4. Direct Staff to develop uses for the $10 million standard allowance
5. Support allocation of $3 million over three years to expand the MSA program
6. Consider approval of the Child Care Gap Assessment scope of work and support allocation of $3 million toward solutions
7. Support modification and expansion of housing programs with allocation of $5 million
8. Motion and second to approve agreement with Lake Berryessa Resort Improvement District to finance critical water and wastewater projects totaling $1.35 million
9. Motion and second to approve proposed $4,826,825 budget amendment for County’s public health response (4/5 vote required)
FISCAL & STRATEGIC PLAN IMPACT
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Is there a Fiscal Impact? |
Yes |
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County Strategic Plan pillar addressed: |
Livable Economy for All |
ENVIRONMENTAL IMPACT
ENVIRONMENTAL DETERMINATION: The proposed action is not a project as defined by 14 California Code of Regulations 15378 (State CEQA Guidelines) and therefore CEQA is not applicable.
BACKGROUND AND DISCUSSION
Staff presented information to the Board in 2021 regarding the County’s ARPA allocation and the U.S. Treasury’s Interim Final Rule including a discussion of then-eligible uses of funding. The Final Rule was issued in January 2022 and will take effect April 1, 2022. The categories of eligible and ineligible uses remain, and the guidance indicates further flexibility in the use of funds. Of note, the U.S. Treasury now provides for a standard allowance of $10 million in lieu of the complex revenue recovery calculation. Entities may elect either the standard allowance, the calculation, or neither. The funds may be used only for the provision of the types of services “traditionally provided by government” (some of which are enumerated by Treasury) and are not subject to further ARPA eligibility and compliance requirements.
Staff presented information to the Board in 2021 regarding the County’s ARPA allocation and the U.S. Treasury’s Interim Final Rule including a discussion of then-eligible uses of funding. The Final Rule was issued in January 2022 and will take effect April 1, 2022. The categories of eligible and ineligible uses remain, and the guidance indicates further flexibility in the use of funds. Of note, the U.S. Treasury now provides for a standard allowance of $10 million in lieu of the complex revenue recovery calculation. Entities may elect either the standard allowance, the calculation, or neither. The funds may be used only for the provision of the types of services “traditionally provided by government” (some of which are enumerated by Treasury) and are not subject to further ARPA eligibility and compliance requirements.
Staff recommends the Board direct development of a use list for the standard allowance and return in March for review. The information would be reported to the U.S. Treasury for the April 30, 2022, report and be included in the FY 2022-23 Recommended Budget.
The Board has been presented the following uses to date:
1) Grant to Napa Valley Community Foundation for rental assistance navigation services totaling $100,000;
2) Pledge to Burbank Housing for conversion of Wine Valley Lodge for affordable housing apartments totaling $2 million, a commitment of funds will return for Board consideration if the State provides a grant award; and
3) Appropriation of $1.5 million to fund salaries and benefits for operation of Isolation and Quarantine facilities.
Today’s reporting to your Board requests further allocations from the ARPA recovery funds as follows:
1) A proposed appropriation of $3,476,825 to reimburse departmental expenses incurred since July 1, 2021 to support response to the pandemic, including public health response, isolation and quarantine shelters, and the emergency operations center; and,
2) A proposed transfer of $1.35 million for Lower Berryessa Resort Improvement District (LBRID) water/ sewer infrastructure improvements. This proposal is the subject of a separate board report/action on this agenda under Special Districts item 6A.
In November 2021, staff presented community public health and economic recovery needs identified through public workshops and supplemental communications. The Board prioritized tackling the community’s complex childcare needs by identifying the gap across users, providers, and resources. There is not one repository of information to review or a clear consensus where to dedicate one-time monies. Assistance is needed to gather, assess, and recommend redirection or solicitation of funds to make the biggest impact for the community. Staff recommends a proposed scope of work (attached) for a consultant who will return with both the gaps and recommended actions identified to then determine where best to invest resources. The County investment of ARPA funds could total $3 million.
The County uses Master Settlement Agreement (MSA) monies to partner with local service providers to enhance delivery of community-based services that align with County health and human services priorities. The amount appropriated annually is $1.1 million; however, the County increased this general fund allocation in FY 2021-22 to $2.1 million to recognize the additional services needed in response to the pandemic. These needs continue and Staff recommends the Board direct use of one-time ‘ARPA-governmental use’ monies totaling $1 million to supplement the MSA grants program for FY 2022-23 and $1 million per year for the next two years, totaling $3 million. The revised grant guidelines will return to the Board for consideration next month.
The County administers a Proximity Housing Loan Program that assists local workers with home ownership in Napa County. Staff will present the Program’s guidelines (attached) and share the economic factors currently limiting its use. Staff recommends the Board consider modifications to the guidelines that will expand eligibility for its intended use and Staff will return in April with proposed revisions. In addition to economic factors limiting the loan program, there is limited housing stock available for the workforce. The County offers financial assistance for property owners who install junior accessory dwelling units (JADUs); however, the program has experienced minimal interest. Staff will share research to consider development of an accessory dwelling unit program that would return for approval in the Spring.