HomeMy WebLinkAbout05(D) - Approve American Rescue Plan Act (ARPA) funds expenditure reporting for the Downtown South Street replacement projectCITY COUNCIL AGENDA REPORT
MEETING DATE:
PREPARED BY:
PRESENTED BY:
November 21, 2022
Nicole Klekner, Assistant Finance Director
Cathy Erickson, Finance Director
ITEM: 5D
AGENDA ITEM: Resolution Approving American Rescue Plan Act (ARPA) funds
expenditure reporting for the Downtown South Street replacement
project.
GOAL AREA
OBJECTIVE:
High-Value City Services
1.Establish financial stability for all funds.
RECOMMENDED ACTION:
Adopt a resolution approving the American Rescue Plan Act (ARPA) funds expenditure reporting
for the Downtown South Street replacement project and allocation of cash based on the table
included in the resolution for funding of the Downtown South Street replacement, Fire Station 1
Remodel, and CR21/Revere Improvement projects.
BACKGROUND:
The City has received federal funds under the American Rescue Plan Act (ARPA). Congress
adopted the American Rescue Plan Act (ARPA) in March 2021, which established the
Coronavirus State and Local Fiscal Recovery Fund (SLFRF) to provide aid to local governments.
Prior Lake's allocation was $2,977,000, distributed as shown below:
$ 1,441,281 Initial 2021 Distribution
47,198 Add'I 2021 Distribution
1,488,479 2022 Distribution
$ 2,976,958 Total Award
The covered period for eligible costs begins March 3, 2021, and the deadline for spending is
December 31, 2024.
Based on the Minnesota Management and Budget and the League of Minnesota Cities
recommendation, the city adopted resolution RES21-116 accepting the American Rescue Plan
Act funds on August 16, 2021. The city also adopted resolution RES22-038 approving the
Standard Allowance for Revenue Loss for the Coronavirus Local Fiscal Recovery Fund
established under the American Rescue Plan Act (ARPA) on March 21, 2022.
CURRENT CIRCUMSTANCES:
With Resolution 21 -116, Council directed staff to make recommendations to council regarding
specific use of the funds. The proposed projects previously presented to Council to be funded
with ARPA funds are as follows:
•Downtown South Street replacement project
•CSAH 21/Revere Street improvement project
City of Prior Lake I 4646 Dakota Street SE I Prior Lake MN 55372
Item 5D
Page 12
•Critical public building infrastructure improvements at Fire Station 1 to support the building
renovation to transition to full-time fire staffing while adapting the fire station to implement
COVI D-19 mitigation tactics.
•Purchase of election equipment that follows state guidelines for hardware and software
requirements that provide election cybersecurity.
When these projects were presented to the Council it was with the understanding that use of the
funds would be brought back to Council as part of the approval of the various projects.
Audit information:
Per the Code of Federal Regulations, 2 C.F.R. part 200, subpart F -Audit Requirements, a non
Federal entity that expends $750,000 or more during the non-Federal entity's fiscal year in Federal
awards must have a single or program-specific audit conducted for that year in accordance with
the provisions of this part. However, a technical update was released in April 2022, FR Doc. 2022-
07463, that provides an alternative audit approach (attestation) for eligible recipients that would
not otherwise be required to undergo an audit if it was not for the expenditures of Coronavirus
State and Local Fiscal Recovery Fund (SLFRF) funds directly awarded by Treasury. This
alternative is intended to reduce the burden of a full Single Audit or Program-Specific Audit on
eligible recipients, as well as uphold Treasury's responsibility to be good stewards of federal
funds.
The City is eligible for this alternative in 2022 as the City received under $10,000,000 in SLFRF
funds and spent less than $750,000 in other Federal award funds. If the City is awarded the
Staffing for Adequate Fire and Emergency Response (SAFER) grant for the full-time fire
department in 2023 the City would no longer be eligible for the alternative audit approach as we
would be expending more than $750,000 in other Federal award funds. Therefore, Finance staff
are proposing federal grant reporting of the full SLFRF award of $2,977,000 in 2022 for expenses
for the Downtown South Street replacement project.
In order to be able to use the alternative audit approach (attestation), Finance staff are proposing
reporting the full SLFRF award in 2022 for expenses for the Downtown South Street replacement
project. This will reduce the administrative burden associated with a full single audit as well as
reduce the audit expense for the City.
Operationally, we will continue to use the ARPA funds for the following projects:
•Downtown South Street replacement project
•CSAH 21/Revere Street improvement project
•Fire Station 1 renovations
This approach has been recommended and approved by our audit firm, MMKR.
Proposed Use of ARPA Funds:
See Attachment 1 for a Summary of the Recommended Reporting and Use of ARPA Federal
Funds which includes more information including project descriptions, estimated costs, and
justification.
ALTERNATIVES:
1.Motion and second as a part of the consent agenda to adopt resolution Approving the
American Rescue Plan Act (ARPA) funds expenditure reporting for the Downtown South
Street replacement project
Item 5D Page 13
2.Motion and second to remove from the consent agenda for further discussion.
ATTACHMENTS:
1.Summary of the Recommended Reporting and Use of ARPA Federal Funds
2.Resolution -Approve American Rescue Plan Act (ARPA) funds expenditure reporting for
the Downtown South Street replacement project
ARPA Provision
Category Eligible Use Fund Description
Estimated
Amount
Updated Amount
ARPA reported use
of reserves) *
Required
CashTransfers for
CIP Projects *
Transfer
From:
Transfer
To:
Lost Revenue Government services Construction
DT South Street
Reconstruction - Street
Replacement Cost 1,750,000$ 2,977,000$ 1,750,000$ F265 F501
Lost Revenue Government services Facilities Management
Fire Station 1 renovations
for FT firefighters 400,000 400,000 F265 F440
Lost Revenue Government services Construction
CR21/Revere
Improvements 827,000 827,000 F265 F501
Total 2,977,000$ 2,977,000$ 2,977,000$
rounded to the nearest '000 for presentation purposes
Summary of Recommended Reporting and Use of ARPA Federal Funds