Special Notice / Hearing: None__
Vote Required: Majority
To: Honorable Board of Supervisors
From: Michael P. Callagy, County Executive
Subject: Final American Rescue Plan Act Funding Allocations
RECOMMENDATION:
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Adopt a resolution:
A) Authorizing an allocation of $18,488,820 from the second tranche of San Mateo County’s American Rescue Plan Act (ARPA) funds to ARPA-eligible housing-related needs; and
B) Authorizing the County Executive, or designee(s), in consultation with the County Attorney, to negotiate and enter into agreements, as necessary and advisable, to obligate and expend the $18,488,820 in specified ARPA funds for ARPA-eligible housing-related needs.
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BACKGROUND:
The federal government has allocated $148,897,819 in Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act (ARPA) funds to San Mateo County. These funds were distributed to support state and local governments in responding to the COVID-19 pandemic and its negative economic consequences by funding a range of eligible uses specified in the ARPA legislation and federal guidance.
The first tranche of these ARPA funds, $74,448,909, was received on May 20, 2021 and appropriated by the Board in the adopted budget on September 28, 2021. The second tranche of $74,448,909 was received by the County on July 25, 2022 and appropriated by the Board in the FY 2022-23 Adopted Budget.
Allocation of the County’s ARPA funds to eligible uses have been guided by community priorities. Over 300 community members contributed to the initial strategic recovery plan, which was developed in the summer of 2020 and covered the distribution of all but $10,000,000 of the first tranche of ARPA funds. Those remaining $10,000,00 in ARPA funds were set aside for programs identified through an update to the community priorities, with an emphasis on input from residents of communities most impacted by the COVID-19 pandemic.
In the fall of 2021, Chief Equity Officer Shireen Malekefzali worked with the Gardner Center at Stanford University to identify the current priorities of these most impacted communities. After assessing survey, focus group, town hall, and community poster data, the Gardner Center found that housing remained the highest priority for almost all respondents, followed by anxiety related to food insecurity. Other priorities included job training and placement assistance, and access to childcare and out-of-school care. Challenges with accessing County programs and the need for expanded communication with the Latino/x community were themes the Gardner Center noted spread across all the priorities.
The next step in the allocation process was to develop specific projects to address the communities’ priorities and incorporate their suggestions by working groups of local partners and subject matter experts. This process was facilitated by the Boston Consulting Group through a contract funded by the Silicon Valley Community Foundation and, in December 2021, resulted in a proposed allocation plan for $84,448,909 in ARPA projects, to be funded by the remaining $10,000,000 from the first tranche of ARPA funds, as well as $74,448,909 from the second tranche payment.
The $84.4 million allocation plan focuses on pandemic response and economic recovery, targeting support for children, families, and vulnerable populations, as well as promoting housing, economic recovery, and infrastructure investments. The plan, initially reviewed by several groups, was refined based on feedback, and the Board approved $10 million from the first tranche in February 2022, followed by the second tranche allocation in May 2022. Some funds were not allocated to specific programs.
The County has funded approximately 43 projects with ARPA funds, of which 21 have been completed or the funding has been fully expended and 16 are still in progress with an expected completion date before December 31, 2026. The remaining projects did not expend the full funding amount due to changed priorities or other circumstances.
To date, the County has spent $100,887,734 and obligated an additional $36,947,251 in ARPA funds to eligible uses.
DISCUSSION:
The residents of the County continue to have pressing needs, particularly in relation to housing, that are eligible to be addressed with ARPA funds. Funding for programs to relieve housing insecurity, develop affordable housing and to provide assistance for individuals and families experiencing homelessness are examples of housing-related ARPA-eligible uses, among others. The County has ARPA funds available for such purposes resulting from the unallocated amount from the recommended project plan of $28,753,909, which is currently $18,488,820.
Under ARPA, funds must be “obligated” by December 31, 2024, which means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment by that date. The ARPA funds must be expended no later than December 31, 2026.
In view of these deadlines, staff recommends that this Board allocate the balance of unobligated ARPA funds in the amount of $18,488,820 to ARPA-eligible housing related needs. Staff further recommends that the Board authorize the County Executive, or designee(s), in consultation with the County Attorney, to negotiate and enter into agreements, as necessary and advisable, to obligate and expend the $18,488,820 in specified ARPA funds for ARPA-eligible housing-related needs.
The County Attorney’s Office has reviewed the memorandum and resolution as to form.
EQUITY STATEMENT:
The allocation of the remaining ARPA funds toward allowable housing related needs will advance equity in San Mateo County by providing support for unhoused individuals, a vulnerable and underserved community, many of whom are immigrants, women, and people of color.
FISCAL IMPACT:
The balance of all received ARPA funds have been included in the Fiscal Year 2024-25 Adopted Budget with no fiscal impact on the County General Fund. There is also no fiscal impact on the County General Fund associated with providing direction to staff on the final allocation of the unallocated funds from the refined recommended project plan.