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Morrow County finance staff proposes swapping ARPA obligations to avoid federal subrecipient compliance for Heppner projects
Summary
Finance staff recommended de‑obligating SLFRF funds currently slated for a Heppner daycare and city water project and re‑obligating them to ambulance contracts to avoid imposing federal subrecipient monitoring and single-audit burdens on small local partners; the swap would be followed by a general‑fund commitment to the local projects.
County finance staff briefed commissioners on SLFRF (ARPA) and LATCF allocations and recommended a fund-swap to protect federal dollars already awarded to Morrow County.
Staff reported the county received $2,253,747 in SLFRF funds and $731,052.26 in LATCF funds. Three remaining SLFRF commitments — an interim ambulance service allocation, a City of Heppner water improvement project, and a Heppner daycare expansion — together total roughly $932,000 that had been reserved but not yet expended. Staff warned that making the daycare a federal subrecipient would push the nonprofit over the single-audit threshold, create complex monitoring responsibilities for the county, and risk noncompliance or returned funds if the projects are not completed on time.
To avoid that outcome, staff proposed de-obligating the SLFRF commitments for Heppner projects before the SLFRF obligation deadline and re-obligating the SLFRF funds to ambulance-service contracts that are highly likely to be spent. The county would then use general-fund appropriations (or other non‑federal funds) to cover the daycare and water project, removing federal subrecipient obligations from the local partners. Staff said their auditors (named in-session) supported the approach as a defensible method to preserve the county’s federal funding value.
Staff noted the SLFRF obligation deadline (programmatic obligation) is December 31, 2024, with an expenditure deadline of December 31, 2026. Commissioners discussed timing, the need for a supplemental budget and public hearings if they proceed, and the political optics of reallocating federal dollars. Staff emphasized the swap would not increase total appropriations but would change which fund pays which project to avoid federal compliance burdens for small local partners.
Commissioners did not make a final decision during the work session; staff will supply slides and return with specifics and recommended supplemental-budget steps for a future business meeting.
