REPORT TO THE CITY COUNCIL FROM: JENNIFER CLARK, Director Planning & Development Department THROUGH: PHIL SKEI, Assistant Director Planning & Development Department BY: MAYRA MERINO, Senior Management Analyst Planning & Development Department SUBJECT ..Title Approve an Interagency Agreement between the City of Fresno and the Department of Planning and Development in an amount not to exceed $3,261,614 in State and Local Fiscal Recover Funds (SLFRF) part of the American Rescue Plan Act (ARPA). ..Body RECOMMENDATION Staff recommends that the City Council approve an Interagency Agreement between the City of Fresno and the Department of Planning and Development for a total amount not to exceed $3,261,614 in State and Local Fiscal Recover Funds (SLFRF) part of the American Rescue Plan Act (ARPA). This allocation is necessary to meet the United States Treasury's obligation deadline of December 31, 2024, for the SLFRF ARPA funding. EXECUTIVE SUMMARY The proposed Interagency Agreement (Agreement) between the City of Fresno (City) and the Department of Planning and Development (Department) will facilitate the timely implementation and completion of the Department's SLFRF ARPA-funded projects. Under the terms of the Agreement, the City will allocate $1,980,000 to the Department for the Weldon Homeownership Project, which involves the development of 18-acres of land. This project aims to construct up to 113 single-family homes for sale to low-income households, 70 of which would be ARPA-supported for sale to Very Low- to Low-Income households. Additionally, the City will allocate $1,281,614 to the Department for the Garage 9 Renovations Project. These funds will be used to upgrade the existing site into a "move-in-ready" office space to relocate staff from the Community Development, Housing Production, Finance, Homeless Assistance Response Team (HART), and Homeless Divisions under Planning & Development. BACKGROUND The Coronavirus State and Local Fiscal Recovery Funds (SLFRF), established under the American Resue Plan (ARPA), provides $350 billion in funding to State, local, and territorial and Tribal governments to support response and recovery efforts related to the COVID-19 public health emergency. In 2021, the City of Fresno was awarded American Rescue Plan Act funding in the amount of $170,808,029. Through the budget process in both FY 2024 and FY 2025, Council has identified and approved projects to be funded by the City's ARPA funding. Staff has been working to obligate all projects in accordance with the United State Department of the Treasury (Treasury) guidelines. These guidelines include an obligation deadline of December 31, 2024, and an expenditure deadline of December 31, 2026. If both deadlines are not met, the City will be required to return the un-obligated funds back to the Treasury. In November 2023, the United States Department of the Treasury (Treasury) issued the Obligation Interim Final Rule, clarifying the definition of "obligation". Under this rule, all awarded funds must be obligated by December 31, 2024, and spent by December 31, 2026. Any un-obligated funds as of the December 31, 2024 deadline, will be required to be returned to the Treasury. This recommended Agreement is an eligible method of obligating SLFRF ARPA funding for the respective projects. The Agreement outlines specific deliverables and scope of work for each project. The Weldon Homeownership Project involves the development of an 18-acre parcel for the construction of up to 113 single family homes, with a focus on affordable housing for Very Low- to Low Income households. The project is currently in the Initial Study phase and is progressing toward meeting scheduled deliverables. Construction is expected to commence in October 2025, with the project on track to construct up to 70 units and meet the funding expenditure deadline of December 31, 2026. The Garage 9 Renovation Project involves transforming an existing site into office space to accommodate various staff from the Community Development, Housing Production, Finance, Homeless Assistance Response Team (HART), and Homeless Divisions under Planning & Development. This project is on schedule and expected to be completed by August of 2025. ENVIRONMENTAL FINDINGS This action is not considered a "project" as defined by the California Environmental Quality Act (CEQA) Guidelines, Section 15378. LOCAL PREFERENCE Local preference does not apply to this action, as it does not involve a bid or the award of a construction or services contract. FISCAL IMPACT This action will not impact on the City's General Fund. The Agreement will obligate State and Local Fiscal Recovery Funds part of the American Rescue Plan Act. Attachment: ARPA Interagency Agreement - Planning and Development Department