Item:
Title
Approve Certain Adjustments to the County’s American Rescue Plan Act (ARPA) Funds and Approve Grant Agreement Contract Amendment for ARPA Grant to Early Years in Amount of $1,690,296
Body
Date of BOCC Meeting: November 3, 2025
Request for Board Action:
Agenda Text
The Board is requested to approve a change to the County’s American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (CSLFRF), and to approve an amendment to the ARPA subaward agreement with Early Years to increase the allocation for the grant from $2,400,000 to $4,090,296, a $1,690,296 increase. As described below, these changes are necessary due to uncertainty over State legislation regarding guaranteed income programming that has created a substantial risk that the County’s planned ARPA-funded initiative would not be able to be completed within the ARPA period of availability, a change in the contract scope for the ARPA-funded East Durham Market project, and the ongoing need for additional support for income-qualified families to access affordable childcare and related support services.
Following enactment of ARPA in March 2021, Durham County received $62,445,275 under the CSLFRF program to help the County respond to the various health, economic, physical, and revenue impacts of the COVID-19 pandemic. Under U.S. Treasury Department regulations, the County was required to fully obligate its full CSLFRF allocation by December 31, 2024, which the County successfully was able to accomplish through the issuance of over 45 grants, contracts, and interlocal agreements. The County has until December 31, 2026 to fully expend all funds under the agreements.
While U.S Treasury requirements prohibit entities from entering into new grants, contracts, or other agreements after December 31, 2024, the U.S. Treasury Department recognized through its Obligation Final Rule that circumstances may arise during the two-year liquidation period that could result in localities needing to make changes to already obligated ARPA allocations. Accordingly, the Obligation Final Rule permits local governments to make changes to its ARPA-funded initiatives, including canceling initiatives or reallocating funds between initiatives, provided that the entity does not enter into any new agreements using the ARPA funds after December 31, 2024.
As part of the County’s plan for deploying the CSLFRF funds, the Board of County Commissioners allocated $1,690,000 from the County’s CSLFRF funding to support the DCo Thrives Guaranteed Income pilot program. While the County’s selected vendor for the program has made progress in designing and building the program, the North Carolina General Assembly is currently considering legislation that would prohibit the County from implementing a guaranteed income program. While the legislation has not yet been passed and enacted, the uncertainty posed by the bill creates a substantial risk that the County would not be able to expend all of the allocated ARPA funding through the program by the December 31, 2026 deadline. Accordingly, it is recommended that the Board approves a pause and eventual transition of the work on the planned guaranteed income pilot to local funds and a reallocation of the remaining $1,490,679 budgeted for the pilot to allow the County to preserve the work already completed in designing the program while eliminating the risk that the County would be unable to utilize its full ARPA fund allocation.
The Board is also requested to approve a budget adjustment for the County’s ARPA-funded contract with Communities in Partnership (CIP) to operate the East Durham Market. Due to U.S. Department of Agriculture changes to the Supplemental Nutrition Assistance Program (SNAP) registration requirements, CIP will not be able to administer a planned pilot of the County’s Double Bucks program at the market. Accordingly, the County and CIP have agreed to amend the existing ARPA contract to remove $199,590 from the contract budget to remove the funding budgeted for the Double Bucks pilot. It is recommended that the Board approves this reduction to allow the County to reallocate the funding for utilization before the December 31, 2026 liquidation deadline.
Finally, to ensure that the County’s full ARPA allocation is utilized, the Board is also recommended to approve the reallocation of the $1,690,296 that will not be utilized for the DCo Thrives and East Durham Market projects to increase the Build Babies Durham grant award for Early Years from $2,400,000 to $4,090,000. These additional funds will be used to support continuation of childcare subsidies for income-eligible families (including subsidies for the provision of wrap-around services for eligible recipients), as well as associated administrative expenses.
Alignment with Strategic Plan: This item aligns with the following components of the Durham County Strategic Plan: Regional Leadership, RL1 (Connect residents to good jobs and economic opportunities), RL1c (Support small business ecosystem), and RL 4 (Support efforts which ensure that Durham residents of all economic backgrounds have access to housing); Healthy & Inclusive Community, HI 3 (Expand and provide services that support residents across their entire lifespan), HI 3c (Implement technology to improve access to and efficiency of children and family well-being programs); and Empowered Community, EC 2 (Provide access to equitable opportunities for children and youth to learn and grow in different ways), EC 2a (Support early childhood development opportunities for all).
Resource Persons: Claudia Hager, County Manager; John Keefer, Director of Organizational Effectiveness; Samantha Smith, Management Analyst
County Manager’s Recommendation: The County Manager recommends that the Board of County Commissioners authorize the County Manager to transition the DCo Thrives program from ARPA funding to local funding, to reduce the ARPA East Durham Market contract budget by $199,590, and to approve the reallocation of $1,690,296 in ARPA funding to Early Years and the accompanying grant agreement amendment to continue childcare subsidies and associated services.
Signature
County Manager: ____________________________