title
ADOPT A RESOLUTION APPROVING RECOMMENDED ADJUSTMENTS TO THE AMERICAN RESCUE PLAN ACT PROGRAMS AND PROJECTS
recommended action
RECOMMENDATION
It is recommended that the City Council adopt a resolution approving the recommended adjustments to the American Rescue Plan Act Programs and Projects:
a. Allocate $65,000 to complete work already in progress on the Arena Scoreboard Project
b. Allocate $300,000 to add an additional year of services to the Non-Profit Capacity Building Program
c. Allocate $300,000 for the Essential Worker Premium Payment shortfall adjustment
d. Allocate $200,000 to support a co-location Data Center as part of the City’s Disaster Readiness Plan
e. Allocate $1 million to complete the Emergency Generator Installation Project, adding six firehouse locations
f. Allocate $4.124 million to support the Stockton Animal Shelter Renovation Project revised budget estimate
g. Allocate $2,011,000 to the Revenue Loss Fund
h. Allocate $2,000,000 to the Council Contingency Fund
i. Authorize the City Manager to reallocate funds among approved ARPA projects to meet the obligation deadlines and close out completed projects.
Authorize the City Manager to take necessary and appropriate actions to carry out the purpose and intent of this resolution.
body
Summary
On Wednesday, February 28, 2024, the Stockton City Council held its third American Rescue Plan Act (ARPA) Study Session Workshop at the San Joaquin Council of Governments building. During this meeting, Council members were provided an update on each project funded by ARPA and provided with recommended adjustments to the funding plan. All ARPA funds must be obligated by December 31, 2024, and expended by December 31, 2026.
Additional information regarding ARPA projects and plans, financial reports to the Department of the Treasury, workshops, and any supplementary actions taken by Council can be found on the City’s website at:
www.stocktonca.gov/government/city_manager/american_rescue_plan_act.php <http://www.stocktonca.gov/government/city_manager/american_rescue_plan_act.php>
DISCUSSION
Background
The American Rescue Plan Act (the Act) established the Coronavirus State Fiscal Recovery Fund and Coronavirus Local Fiscal Recovery Fund (CLFRF), which provides a combined $350 billion in assistance to eligible state, local, territorial, and Tribal governments to support COVID-19 economic recovery efforts. Of the $350 billion, $19.53 billion was allocated to non-entitlement units of local government, ultimately allocating $78,052,072 to the City of Stockton based on the City’s 2019 Census data. The Treasury’s intended goal is to provide substantial flexibility for each government to meet local needs - including support for households, small businesses, impacted industries, essential workers, and the communities hit hardest by the COVID-19 public health crisis. These funds can also be used to make necessary investments in water, sewer, and infrastructure. Funding objectives include relief to:
• Support urgent COVID-19 response efforts to continue to decrease the spread of the virus and bring the pandemic under control;
• Replace lost revenue for eligible governments to strengthen support for vital public services and help retain jobs;
• Support immediate economic stabilization for households and businesses and
• Address systemic public health and economic challenges that have contributed to the inequal impact of the pandemic.
Local governments received funds in two tranches. Half of the funding, or $39,026,036, was received by the City on June 1, 2021, with the balance arriving in July 2022. Funds must be obligated by December 31, 2024. The period for performance ends December 31, 2026.
The City of Stockton, like most communities throughout the country, was negatively impacted by the COVID-19 public health emergency. In particular, the city experienced severe revenue losses due to reduced business patronage, recreational activities & events, and outside travel, in addition to experiencing numerous business closures. However, the City continued its operations throughout the pandemic and maintained essential services for its residents - while adhering to the local and state-wide health mandates/directives to ensure proper safety for its employees and allowing adequate time-off for COVID-19 related issues. Furthermore, City staff continued to remain at work and provide essential services to the community throughout the pandemic.
The City received the first half of ARAP funds on June 1, 2021 and submitted the first iteration of proposed projects to the City Council on June 22, 2021, as New Business Item 15.1, which was approved by motion 2021-06-22-1501.
The proposed list of projects was identified and categorized to support:
• COVID Mitigation and Prevention
• Community Well Being
• Essential Support to Household
• Small Business Support & Economic Recovery
• Homeless & Housing
• Recovery of City Government
• Digital Divide & Internet Connectivity
• Other Miscellaneous Projects
The Council provided guidance and recommendations for revisions, which were brought back to Council in September 2021 and approved with motion 2021-09-14-1501. This September action also set aside ten percent (10%) of the funds as a Council Contingency allocation.
In December of 2021, Council approved a recommendation to reprogram $6,050,000 from existing projects to provide a match for the Housing Authority of San Joaquin County’s (HASJC) application for Project Homekey funding to support their Calaveras Quarters Project. This reallocation of funding canceled $5,850,000 from the proposed Down Payment Assistance Program and $200,000 from the Coordinated Entry Project. No Contingency Funds were used to complete this action, which was approved by resolution 2021-12-14-1504.
City staff provided the Council with an update on all ARPA-funded projects during the 2022 Study Session on Projects Funded by the American Rescue Plan Act, held at the Civic Auditorium on February 16, 2022.
On April 19, 2022, with motion 2022-04-19-1201, City Council approved a contract under the Recovery of City Government - General Administration, to support procurement activities related to ARAP purchases and reporting. This again, reprogrammed funding from an existing project and did not expend any contingency funds.
In May of 2022, with motion 2022-05-24-1502, City council approved the use of $2.5 million in Council Contingency Funds: $1.5 million would support new video board equipment for the Stockton Arena, $500,000 to support ongoing traffic and safety improvement projects within the Miracle Mile District, and $500,000 to support the unfunded, State mandated COVID-related sick leave. This action reduced the Council Contingency line from $7,805,208 to $5,305,208.
With resolution 2022-06-14-1506, in June 2022, City Council approved the reprogramming of $3.6 million from the existing Low-Barrier Shelter Bed project and $1.8 million from the Safe Camping & Parking project, effectively canceling both existing projects and consolidating them into what is now the Shelter Bed and Enhanced Safety Zone, with a City budget of $5.4 million. This action also instructed the City to apply for additional grant funding from the San Joaquin County to support access to low-barrier shelter beds in the City of Stockton. Staff continues to work with the County and provide updates to Council, most recently with resolution 2022-11-01-1202, and will continue to provide updates to the Council during future meetings.
On July 26, 2022, with motion 2022-07-26-1503, the City approved a contract with Community Medical Centers to launch a pilot community well-being and crisis intervention program - Care Link Mobile Crisis Intervention Response. This partnership shares the objectives of decreasing repeat callers in crisis, increasing follow-up and access to wrap around services, decrease hesitancy to call police, increase community trust, decrease non-emergency calls to 911, and divert individuals away from the criminal justice system.
City staff provided the Council with an update on all ARPA-funded projects during the 2023 Study Session on Projects Funded by the American Rescue Plan Act, held at the Civic Auditorium on February 22, 2023.
With motion 2023-03-21-1503, in March of 2023, the Council authorized reprogramming $3.6 million from the Council-approved low Barrier Shelter Bed category to support the St. Mary’s Pathways project. Pathways is a residential temporary housing community operating under shelter guidelines, comprised of 200+/- modular temporary housing units.
In May of 2023, with resolution 2023-05-02-1208, the Council approved an additional allocation from ARPA contingency to support Uplift Downtown efforts and created a new project to replace the Arena Scoreboard and ancillary Audio/Visual systems.
In addition, the Council approved several actions from May through October 2023 to fund or support different initiatives in the City related to housing and services for the unsheltered population.
• May 2023 - Resolution 2023-05-02-1207 approved reprogramming of $1.8 million from the Low-Barrier Shelter Beds category to support a Homekey - Round 3 application and project that would provide approximately 76 one- and two-bedroom units for individuals are homeless or are at imminent risk of homelessness.
• August 2023 - Resolution 2023-08-03-0401 ratified a local emergency proclamation due to public health and safety related to unhoused individuals. This resolution authorized staff to include ARPA contingency funds as an available resource as the community worked through the closing of the Stockton Shelter, providing services to those clients at risk of losing support, and transitioning services and clients to another provider.
• September 2023 - Motion 2023-09-12-1501 formally appropriated $800,640 from ARPA contingency to operational expenses related to transitioning the Stockton Shelter facility to the care and control of the St Mary’s organization, in response to the shelter crisis outlined in the previous resolution.
• October 2023 - Motion 2023-10-17-1204 appropriated $826,961.40 in ARPA contingency funds to support construction and construction management services to resume/complete the Navigation Center project, previously under the control of the Stockton Shelter. This item was also in response to the emergency declaration established by the August resolution.
Present Situation
The 2024 ARPA workshop was held at the San Joaquin Council of Government’s building on Wednesday. February 28, 2024. A copy of the presentation materials has been provided as Attachment A.
The City has identified approximately $10,000,000 in funds that are eligible for reprogramming in order to meet the December 31, 2024 obligation deadline.
• $2 million from existing project balances
• $5 million in the Revenue Loss Fund
• $3 million in the Council Contingency Fund
Following the project updates, staff recommended the following adjustments to the approved projects and spending plans, ensuring the obligation of all funds.
• Arena Scoreboard Project - $65,000
Additional funding for the close out of the Scoreboard project is requested to cover the cost of permits and labor compliance monitoring costs, not included in the original allocation.
• Non-Profit Capacity Building Program - $300,000
The Nonprofit Capacity Building Program has seen tremendous success. Additional funding would allow for one more year of funding to operate the program as well provide an educational summit for all nonprofits to attend.
• Essential Worker Premium Payment - $300,000
Essential worker payments were provided to City employees in November 2021 for their service to the community during the pandemic. Full-time employees received $2,000, and part-time employees received $500 for a total cost of $3,180,000. This amount was greater than
the budget allocation by $300,000.
• Data Center - Disaster Readiness - $200,000
Funding is needed to establish a new, redundant Data Center initially for Public Safety city systems and then expand to all city Systems. This project will address the single point of failure related to the City’s current Data Center, reducing the risk of downtime and providing business continuity during an emergency, environmental disaster, or cyber-attack. Funding this project will provide the City with the means to implement this new capability that would ensure business continuity, disaster recovery, and resiliency in the ongoing delivery of critical public services and pave the way to maintaining the capability in the City’s long-term financial plan.
• Emergency Generator Installation Project - $1,000,000
Allocating additional funding towards the Emergency Generator Installation project will allow staff to replace backup generators and install Automatic Transfer Switches at an additional six Fire Stations. Currently, Fire Stations 5, 6, 7, 9, 10, and 14 do not have Automatic Transfer Switches, and the generators supplying backup power have surpassed their lifecycle or are not sized adequately to provide power to the entire Fire Station in an emergency. The additional funding would ensure that all Fire Stations in the City are equipped with Automatic Transfer Switches and have new generators that are sized appropriately to run an entire Fire Sation on backup power.
• Stockton Animal Shelter - $4,124,000
Allocating additional funding towards the Stockton Animal Shelter project will provide the necessary funding needed to deliver the base bid (minimum) project. The scope of the project is extensive and includes a cattery, medical facilities, staff offices, restrooms, animal isolation and rehabilitation areas, and conference room space. Updates to the existing Animal Shelter will include network upgrades, backup generators, uninterrupted power supply, a new industrial freezer, and repurposing existing modular buildings on site. To meet the Shelter’s needs, account for increases in construction costs, and deliver a quality project of this nature, additional funding is required.
• Revenue Loss Fund - $2,011,000
Allocate a portion of the remaining funds to the Revenue Loss Fund.
• Council Contingency Fund - $2,000,000
Allocate the remaining $2,000,000 to the Council Contingency Fund.
FINANCIAL SUMMARY
The full $78 million in ARPA funding is budgeted in the 280 Special Grants fund. The recommended action would allocate $5,989,000 to the identified projects. The funding is already appropriated and would be moved from the Council contingency line ($1 million), the Revenue loss category ($3 million), and through the reprogramming of unspent ARPA dollars from completed projects ($2 million). This reallocation of ARPA funds will leave $2 million in the Council contingency and $2 million in the Revenue Loss category.
Attachment A - ARPA Workshop Presentation Materials