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Ione staff outlines ARPA reallocation plan to avoid returning funds; council gives direction to proceed with documented qualifying uses
Summary
City staff presented a proposed reallocation of about $2 million in American Rescue Plan Act (ARPA) funds, identified qualifying categories and asked council for direction to proceed with detailed journal entries and documentation. Council directed staff to continue and to provide full backup for any reallocated items.
City grant staff and finance managers told the Ione City Council the city must reclassify previously spent items and allocate qualifying uses for roughly $2.0 million in American Rescue Plan Act (ARPA) funds to avoid returning funds to the U.S. Treasury.
Grant coordinator Debbie Mackey and Finance Manager Andrea Bonham presented a proposed allocation-by-percentage built from qualifying expenses that can be documented before the Treasury reporting portal opens. Staff said the city discovered that certain items the council previously expected to qualify either did not meet the qualifying-date or documentation requirements, and the Treasury’s guidance and deadlines (including a requirement that funds be under contract or spent by Dec. 31, 2024) constrain options.
Staff recommended using a ‘‘standard allowance’’ (the Treasury’s standard allowance up to $10 million for lost revenue) and reclassifying qualifying past expenses (e.g., wastewater/tertiary work, public safety, parks/public works) rather than attempting to re-document payroll or other categories that trigger more complex reporting. Staff said the approach reduces audit burden but requires detailed journal entries and receipts to be matched to new accounts.
Council directed staff to proceed with the proposed allocation approach for transparency and to prepare the supporting documentation and journal entries for council review. Several council members and public commenters asked for additional transparency, itemized backup and a timetable for the final reporting. Debbie Mackey said the Treasury reporting portal opens in April; staff said most qualifying receipts must be dated on or before Dec. 31, 2024.
Why it matters: Misclassification or failure to document qualifying uses could force the city to return ARPA funds. Staff said the proposed approach is intended to minimize risk and administrative burden while preserving eligible funding already spent on city projects.
Ending: Council instructed staff to proceed with the reallocation using the qualifying-list approach, to compile itemized documentation and to return to council with the detailed journal entries and backup.
