ARPA was signed into law on March 11, 2021 by President Biden. The ARPA is a broad and far-reaching funding package totaling $1.9 trillion, which provides direct stimulus to taxpayers, advances on child tax credit payments, direct allocations to State and Local governments as well as a myriad of competitive grant programs administered by federal agencies. A summary of the ARPA, including national funding figures, is included as Attachment A for reference.
County History of American Rescue Plan Act Actions
During the fiscal year 2021/22 budget development process, the County Administrator's Office requested information from departments about known impacts from the ARPA for context in assembling the fiscal year 2021/22 Recommended Budget. Because the passage of the ARPA occurred late in the County’s budget process, there was very little information to share in subsequent budget presentations, with the exception of the Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), which was widely being tracked throughout the legislative process by state and local government professional organizations such as the National Association of Counties (NACo). At that time, the County was estimated to receive slightly more than $220 million over a two-year period.
On June 28, 2021, the County Administrator sent correspondence to department heads establishing guidance for reporting impacts of the ARPA on their respective departments. This included an initial assessment of ARPA impacts by program area, a request for information about unreimbursed COVID-19 costs incurred, a survey of one-time needs and templates of required quarterly reporting documents. The results were reported on during a public ARPA workshop hosted by the Board of Supervisors on August 3, 2021 (D.4). In summary, departments reported the following information at that time:
-
Known ARPA Revenue: $317,327,304, of which $127,606,232 has been received by the County
-
Unreimbursed COVID-19 Costs: $16,882,139, including $7,368,000 of unrealized gas tax revenue due to Shelter in Place orders
-
One-Time Needs: $71,655,531, including $4,120,000 that could be leveraged from non-ARPA funding sources
It is important to note that the One-Time Needs figure above reflected projects that could be obligated prior to December 21, 2024, consistent with CSLFRF guidelines discussed further below.
At the conclusion of the August 2021 public workshop, the Board directed the full $112 million allocation of Year 1 CSLFRF funding to the Health Services Department to defray the cost impacts of COVID-19 response activities. Subsequently, on January 25, 2022, the Board acknowledged that the fiscal year 2022/23 Recommended Budget would include $53 million of Year 2 CSLFRF funding in the Health Services Department budget. On April 12, 2022, the Board approved the fiscal year 2022/23 Recommended Budget as presented, including the additional $53 million of Year 2 CSLFRF funding. At the conclusion of fiscal year 2021/22, the Health Services Department had not spent the entire $112 million allocation. $30 million of that amount was re-budgeted in fiscal year 2022/23, making the total amount budgeted $83 million ($53 million of Year 2 funds + $30 million of unspent Year 1 funds).
Review of Primary ARPA Revenue Drivers
There are two ARPA grant programs that provide the majority of funding to the County; specifically, the CSLFRF and a second allocation of Emergency Rental Assistance Program (ERAP) funds. Below are additional details about both revenue streams.
Coronavirus State and Local Fiscal Recovery Fund - $224,058,903
Contra Costa County has been allocated $224,058,903 of CSLFRF funds directly from the U.S. Treasury. The funding has been allocated in two, 50% tranches, the first of which was received by the County on May 18, 2021 in the amount of $112,029,451. The second tranche was distributed to the County in an equal amount on June 8, 2022. The ARPA outlines four specific eligible uses for CSLFRF funding:
• COVID-19 response activities or its negative economic impacts;
• Premium pay to eligible workers performing essential work during COVID-19;
• Government services to the extent of the reduction in revenue due to COVID-19; and
• Infrastructure investments specifically for water, sewer and broadband.
Each category above has several nuances associated with it, which staff has presented on several times beginning in August 2021. The ARPA requires CSLFRF recipients with populations of over 250,000 residents to submit an annual Recovery Plan Performance Report, including descriptions of projects and information on performance indicators and objectives of each award. CSLFRF expenditures must be incurred by December 31, 2024 and ultimately spent by December 31, 2026.
Emergency Rental Assistance Program 2 - $71,605,012 ($38,941,950 Federal + $32,663,062 State)
Contra Costa County was allocated an additional $71,605,012 in ERAP 2 funds directly from the U.S. Treasury and via the State of California through the State’s ARPA funding allocation. This funding complements ERAP 1 funding previously received both from the U.S. Treasury and from the State in the amount of $75,822,311, making a total of $147,427,324 rental and utility assistance funding available to Contra Costa residents, landlords and utility providers. The State of California requested letters of intent from counties and cities slated to receive State allocations of ERAP 2 funds, subject to final approval by governing boards, to secure funding allocations. The County Administrator's Office filed the letter of intent with the State on July 27, 2021 and subsequently received Board approval to continue participating in the State’s Housing is Key program, providing coordinated rental and utility assistance throughout the state, including to Contra Costans.
ERAP 2 funds were to be used largely in a similar fashion to ERAP 1, but also allowed for relocation cost and security deposit assistance to eligible residents. ERAP 1 funds were to be expended by September 30, 2022 and ERAP 2 funds must be expended by September 30, 2025. The State program has concluded and all funds were distributed prior to the deadlines outlined above. For reference, the total amount of ERAP assistance provided in Contra Costa County, among all funding programs, was $220.2 million serving 16,797 households - $73 million above the County's initial allocation amounts.
Fiscal Year 2022/23 2nd Quarter (October-December) ARPA Status Report
As of December 31, 2022, the County has identified $343,051,683 of known ARPA revenue allocations across 22 unique grant programs. Of that amount, the County has received $326,787,131 and spent $215,706,796.
A full accounting of the above figures, by unique grant program, is included in the "American Rescue Plan - Quarterly Report Worksheet," included as Attachment B to this staff report.
Status of ARPA CSLFRF Funding
As of December 31, 2022, the County had received the entire CSLFRF allocation of $224,058,903 and expended $132,817,286. As previously mentioned, the Board of Supervisors has taken action to allocate $83 million to the Health Services Department in fiscal year 2022/23. During a presentation by the department to the Board of Supervisors on September 13, 2022 related to transitioning the COVID-19 response, the department anticipated actual fiscal year 2022/23 expenditures of approximately $60 million* with the remaining $23 million being re-budgeted in fiscal year 2023/24. Based on actual expenditures in fiscal year 2021/22, anticipated expenditures in fiscal year 2022/23 and the anticipated re-budget of unused funds in fiscal year 2023/24, the current amount of CSLFRF funds unallocated is approximately $37.5 million as illustrated below.
*Note that HSD provided a range of $60-$70 million in fiscal year 2022/23 expenditures; however, this does not change the projected, unallocated amount of $37,544,395, since any unspent balance is assumed to carry over into and spent during fiscal year 2023/24 by the department.
The fiscal year 2022/23 2nd Quarter report on the American Rescue Plan Act (ARPA) will not be formally accepted by the Board of Supervisors.