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Committee weighs options for reallocating remaining ARPA funds; sanitary sewer lateral program may free $300,000
Summary
City staff reported a likely $300,000 projected underspend in an ARPA-funded sanitary sewer lateral lining pilot and presented three options for obligating those funds before federal deadlines: expand the lining geography, convert the funds into a citywide program, or reassign the dollars to other ARPA-eligible uses such as social-service grants.
City staff updated the Committee of the Whole on remaining American Rescue Plan Act (ARPA) obligations, timing rules and options for re-obligating unspent funds before the federal deadlines.
Key points from staff - Obligation mechanics: Staff reminded the committee that ARPA funds must be obligated via a signed contract or an interagency agreement with a clear scope of work by the city’s deadline for obligation (staff noted the requirement that projects must have documented deliverables and contract-like terms to meet Treasury guidance). - Eligible period: ARPA expenses must be for costs incurred beginning March 3, 2021 for items that were eligible under original rules; expenses eligible under later Treasury guidance can only be reimbursed back to the effective date of those updated rules.
Sanitary sewer lateral project update and options - Staff reported that the sanitary sewer lateral lining pilot (Ella subdivision and related work) appears likely to underspend its award by about $300,000 based on current participation and the cost estimates tied to eligible properties. - Options presented to the committee for the potential $300,000 were: 1) amend and expand the same lateral-lining project geography (extend to another neighborhood); 2) reduce the award and convert the remaining funds into a program model (for example, citywide lateral assistance paired with future eligible construction projects), with the caveat that funds must still be obligated by the Treasury deadline and used by program rules; or 3) reduce the award and transfer the dollars into the pool of ARPA funds that must be obligated by the end of this calendar year for other eligible projects (staff suggested social-service grants or the Equal program as possible destinations).
Why it matters - Timing: Staff emphasized the need to obligate funds by the end of the calendar year and flagged a practical timeline for contracts, interagency agreements and any necessary budget amendments. Staff said some flexibility exists — for example, an interagency agreement can document a scope of work that meets Treasury guidance — but council direction is needed. - No immediate cuts planned: Staff told the committee they do not plan to reduce funding for projects that have existing signed contracts and are progressing toward eligible expenses; the $300,000 is a projection tied to estimated participation in the pilot lateral program.
Next steps and committee discussion - Committee members asked for details about what made individual properties eligible or ineligible for the lateral program and requested maps showing other neighborhoods with similar infrastructure that could be included if the committee elects to expand the program. - Several members expressed preference for expanding or preserving similar infrastructure projects or funneling the money into ARPA-eligible social-service grant programs rather than returning funds to general purpose. - Staff said they will circulate the project-level participation and eligibility details, refine the projection and return with a recommended path for final obligation.
Ending - No final decision was made. Staff will provide maps, property-eligibility detail and a refined estimate of remaining funds and return to committee with recommended ordinance or interagency agreement language to obligate the funds.
