To: Honorable Mayor and Members of City Council
From: Jessica Lowe, Public Works Director
Prepared By: Patrick Melgar, Management Analyst II
TITLE:
Title
Fiscal Year 2026/27 Capital Improvement Program Amendment - America Rescue Plan Act (ARPA) Funds
LABEL
RECOMMENDED ACTION:
Recommendation
Adopt a resolution amending the Fiscal Year 2026/27 Capital Improvement Plan; and reallocating a portion of the City’s American Rescue Plan Act Funds as documented in Council Budget Amendment No. 2P4; and determining that the actions authorized by this resolution are exempt from CEQA.
Body
DISCUSSION:
On October 1, 2024, the City Council approved the most recent American Rescue Plan Act (ARPA) funds expenditure plan (Resolution No. R2024-094). Under federal requirements, all ARPA funds must be fully expended by December 31, 2026. To maximize the use of available ARPA funding before this deadline, staff proposes to reallocate unspent balances from capital and non-capital ARPA projects that are complete or otherwise have unspent funds to other previously approved and eligible ARPA projects with remaining funding needs.
This reallocation is permitted under the U.S. Department of the Treasury’s State and Local Fiscal Recovery Funds (SLFRF). Specifically, SLFRF Frequently Asked Questions, FAQ 17.19, provides that funds initially obligated for an eligible activity but ultimately not expended may be reclassified to another eligible activity, provided the replacement activity was also obligated by December 31, 2024.
Staff is recommending:
For ARPA Funded Capital Improvement Projects (CIP):
Funding will be reallocated from a completed project with remaining ARPA funds to another active, eligible project that can use the funds before the December 31, 2026, expenditure deadline.
• Generator for Facilities - Corporation Yard project (33FC23PW05): This project included the purchase and installation of an emergency generator to support continuity of operations at the City’s Corporation Yard.
o Status: The generator has been installed and is currently in the warranty phase. Project closeout activities will occur at the end of warranty period in 2027, after the ARPA expenditure deadline.
o Funding Revision: The remaining $8,799.42 of ARPA funds will be de-obligated from the project. To support final project close out activities, a new $5,000 allocation from the CIP Facility Reserve is recommended.
• Public Works Lucity and GIS Advancement Project (30ARPA06):This project advances enhancements to the City’s Lucity asset management system and GIS capabilities, supporting improved data integration, workflow modernization, and operational efficiency.
o Status: The project is active and includes ARPA-eligible expenditures planned before December 31, 2026.
o Funding Revision: The $8,799.42 in de-obligated funds from the Generator for Facilities - Corporation Yard project will be reallocated to this project.
For other ARPA Funded Project (non-capital):
For non-capital projects, the proposed changes similarly reallocate existing ARPA resources among previously approved and eligible projects. Because these changes are limited to reallocating existing ARPA resources within the same fund and do not increase appropriations or change the City’s overall ARPA allocation, no formal budget action for non-capital projects is required. The proposed reallocations are presented to the City Council for acknowledgment and transparency as the City works to fully expend its remaining ARPA funds by the federal deadline.
The table represents projected project balances as of June 30, 2026, and their proposed reallocations. Remaining balances and the reallocation amounts shown are subject to change.
|
Project |
Project Name |
Current Allocations |
Remaining Budget |
Reallocation |
Revised Allocations |
|
15ARPA01 |
COVID Related Employee Costs |
220,000.00 |
5,813.50 |
(5,813.50) |
214,186.50 |
|
22ARPA02 |
Emergency Operations Related Plans |
85,000.00 |
24,025.63 |
(24,025.63) |
60,974.37 |
|
12ARPA04 |
Street Outreach Housing Readiness |
303,056.00 |
0.33 |
(0.33) |
303,055.67 |
|
19ARPA09 |
Community Recovery Bank |
1,150,000.00 |
35,403.62 |
(35,403.62) |
1,114,596.38 |
|
11ARPA07 |
Records Inventory |
101,240.00 |
6,547.87 |
(6,547.87) |
94,692.13 |
|
12ARPA08 |
Homeless Related Studies Service Gaps |
546,944.00 |
77,438.24 |
71,790.95 |
618,735.30 |
FINANCIAL IMPACTS:
The proposed Fiscal Year 2026/27 Capital Improvement Project Plan amendment as documented in Council Budget Amendment No. 2P4 will revise the Generator for Facilities - Corporation Yard project (33FC23PW05) and the Public Works Lucity and GIS Advancement Project (30ARPA06) budgets as listed below. There is no net impact on the ARPA Fund Balance. The $5,000 CIP Facility Reserve obligation will be funded from reserves.
Generator for Facilities - Corporation Yard (33FC23PW05)
• De-obligate $8,799.42 in ARPA Funds
• Obligate $5,000 from CIP Facility Reserve
Public Works Lucity and GIS Advancement (30ARPA06)
• Obligate $8,799.42 in ARPA Funds
CEQA:
City staff recommends that the City Council determine that the Recommended Action is exempt from CEQA, pursuant to CEQA Guidelines Section 15378(b)(4) (fiscal activities that do not commit to a direct physical change in the environment). Each potential project that is funded through this Recommended Action will be subject to environmental review in accordance with CEQA at the earliest feasible time prior to approval consistent with CEQA Guidelines Sections 15004 and 15352.
DOCUMENTS ATTACHED:
ATCH 1 - Resolution
EX A - Council Budget Amendment No. 2P4
NOTIFICATION:
None.