Title
Adoption of Resolution Amending the Fiscal Year 2024-25 American Rescue Plan Act Fund (Fund 223) Operating Budget Appropriating $87,113 from Available Earned Interest to Project C99300 (American Rescue Plan 2021) Guaranteed Basic Income Pilot Program and Reducing the Appropriation of ARPA Funds by $87,113. (Finance 10024051)
Body
To: Honorable Mayor and Members of the City Council
From: Jennifer Ott, City Manager
EXECUTIVE SUMMARY
The City of Alameda (City) received a total of approximately $28.7 million in American Rescue Plan Act of 2021 (ARPA) funding. These funds must be obligated by December 31, 2024, and spent by December 31, 2026, to avoid forfeiting them.
One project funded by ARPA, the Guaranteed Basic Income Pilot Program (GBIPP), will have unobligated funds by December 31, 2024 which cannot be encumbered through a purchase order (PO) or contract. However, these funds are essential for the program’s success and should remain available. Staff recommends using ARPA earned interest resources to cover these expenditures and reduce the ARPA appropriation to the GBIPP project by the same amount.
BACKGROUND
The City received $28,679,908 in ARPA funding from the United States Department of the Treasury (Treasury). Upon City Council’s direction, these funds were appropriated throughout several eligible uses, or projects, including but not limited to, the GBIPP. A recent audit of APRA appropriations revealed that a total of $28,877,283 was appropriated to ARPA allowable projects, resulting in an over appropriation of $197,375. Additionally, the City was allowed to earn interest on the ARPA funds while they were unspent. The interest earned does not include the same spending restrictions as ARPA funds and represents a small amount of available, unrestricted funds to cover this small over appropriation if necessary.
Guaranteed Basic Income Pilot Program
The GBIPP provides $1,000 per month to approximately 150 households over a two-year period. In May 2022, City Council approved a $4.6 million allocation from ARPA funding for GBIPP, with $3.6 million designated for direct payments to participants. The remaining $1 million was allocated as follows:
|
Item |
Total Budgeted Amount |
|
Program Partners (OD, Abt & Usio) |
$912,887.50 |
|
Benefits Conservation Fund |
$50,000 |
|
Contingency |
$37,112.50 |
|
Total |
$1,000,000 |
DISCUSSION
The City anticipated that participants might lose eligibility for federal, state, county, and/or local benefits due to income limitations. To mitigate this, the City applied for income exemptions through Alameda County’s Social Services Agency for CalWorks and CalFresh and worked with the Alameda Housing Authority to secure federal income exemptions for housing vouchers.
As a precaution, the City set aside ARPA funds of $50,000 for benefits conservation and $37,112.50 for contingency costs. However, under ARPA guidelines, funds must be obligated (i.e., encumbered by PO or contract) by December 31, 2024, and spent by December 31, 2026. Since GIPP’s final payout will occur on December 15, 2025-after the ARPA obligation deadline-the City may not fully understand the impact on participants’ benefits until early 2026.
Given that there is no feasible way to encumber these funds by the deadline, staff recommends appropriating $87,113 from ARPA funds’ earned interest to GBIPP (C99300) for benefits conservation and contingency costs and reducing the ARPA funds appropriation for GBIPP by $87,113.
ALTERNATIVES
• Approve staff’s recommendation to appropriate funds from ARPA earned interest for GBIPP’s benefit conservation and contingency costs.
• Elect not to proceed with staff’s recommendation.
FINANCIAL IMPACT
The use of ARPA earned interest fund in the amount of $87,113 for GBIPP benefit conservation and contingency will have no fiscal impact on the General Fund and will help reduce the over appropriation of ARPA funds.
MUNICIPAL CODE/POLICY DOCUMENT CROSS REFERENCE
This action is in conformance with the Alameda Municipal Code and all policy documents. This action supports the City Strategic Plan Priority to Practice Fiscally Responsible, Equitable and Inclusive Governance.
ENVIRONMENTAL REVIEW
This action is not subject to environmental review as the activity is not a "project" for purposes of the California Environmental Quality Act (CEQA) because it is an organizational or administrative activity of the City that will not result in direct or indirect physical changes in the environment, in accordance with CEQA guidelines, section 15378(b)(5).
CLIMATE IMPACT
There are no identifiable climate impacts or climate action opportunities associated with the subject of this report.
RECOMMENDATION
Adopt a resolution amending the Fiscal Year 2024-25 ARPA Fund (Fund 223) appropriating $87,113 from available earned interest to Project C99300 (American Rescue Plan 2021) GBIPP.
Respectfully submitted,
Angie Nichols, Financial Services Manager
Financial Impact section reviewed,
Margaret O’Brien, Finance Director