City consultant urges conservative re‑obligation of remaining ARPA funds to avoid federal clawback

City staff and an outside consultant reviewed the remaining American Rescue Plan Act (ARPA) funds and proposed a conservative plan to obligate the money before federal deadlines to avoid clawback.

Joseph Sheets, a director with Accenture Infrastructure and Capital Projects, told the commission the city originally received about $5.23 million in ARPA allocations and that about $1.10 million remains unspent. Sheets noted there are strict timing rules and said one critical date is the obligation deadline: "the obligation deadline of 12/31/2024, and then, obviously, the expenditure deadline of 12/31/2026." He recommended re‑obligating the remaining funds to categories that can be documented and validated — payroll or contracts for municipal services such as fire, police, and water/wastewater — and suggested splitting the remaining balance across these priorities to reduce risk of nonexpenditure.

Staff presented a recommended distribution that would allocate roughly equal amounts to the Palatka Fire Department and to utility treatment/wastewater projects and police operations; the commission expressed support for returning in August with finalized obligations and documentation for audit purposes. The commission approved the staff recommendation to proceed with obligating the funds and directed staff to return with the necessary contract documentation and reconciliations.