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Aurora staff caution against passing federal earmarks through city to nonprofits
Summary
City staff advised the Visor Committee that serving as a subrecipient for congressional directed spending (CDS) requests for nonprofits would create heavy compliance, reporting, and liability burdens and could jeopardize existing federal awards.
Aurora staff told the committee they have considered the operational implications if nonprofit organizations become ineligible to apply directly for congressional directed spending and the city must act as a subrecipient.
"If the city was engaged in doing subrecipient grants for nonprofits ... the city would be responsible for ensuring that the nonprofits are reporting everything correctly and spending the money they've been allocated in a way that is in line with federal requirements," Liz said. She warned that if the nonprofit failed to comply and the city did not catch it, Aurora could be flagged as a high‑risk grantee and jeopardize future federal funding.
Staff said last year the House initially announced nonprofits would be ineligible and that the delegation later submitted FY25 requests with the city as the recipient and nonprofits as subrecipients. That late change caused operational strain. Staff said they have resubmitted FY25 projects where possible but that any new long‑term subrecipient relationship could tie the city to nonprofit reporting obligations for three to five years or longer and might require additional staffing.
Committee members also raised political and equity concerns about selecting which nonprofits would receive pass‑through funds and noted the extra oversight and potential need for insurance or other mitigations. City staff recommended against serving as a subrecipient for CDS requests unless the council decides otherwise; staff said the final approach should be brought to full council for direction.
Separately, staff described a proposed congressional directed spending request for wastewater lift‑station improvements: staff said they would request $1,152,000 in CDS to cover 80% of a project with a total cost of $1,440,000 to demolish three old lift stations and rehabilitate one existing station. Staff said two of the stations are in Ward 2 and one in Ward 6, and the rehabilitation site is near I‑70 in Ward 2. Staff said they will pursue advocacy in Washington and coordinate local staff travel in April.
The committee asked staff to prepare a recommendation for full council on whether Aurora should accept subrecipient responsibility and how to vet nonprofits if the city pursues that role; no final decision was made at the meeting.
