TO: ADAM PIRRIE, CITY MANAGER
FROM: JEREMY STARKEY, FINANCE DIRECTOR
DATE: NOVEMBER 10, 2026
Reviewed by:
City Manager: AP
SUBJECT:
Title
AMERICAN RESCUE PLAN ACT (ARPA) UPDATE AND REALLOCATION OF UNSPENT FUNDS (FUNDING SOURCE: AMERICAN RESCUE PLAN ACT FUND)
Body
SUMMARY
On March 11, 2021, the American Rescue Plan Act (ARPA) was signed into law and established the Coronavirus State and Local Fiscal Recovery Fund (SLFRF) program to assist local governments in responding to the impacts of the COVID-19 pandemic. The City of Claremont received a total allocation of $8,675,598 from the U.S. Treasury in two installments received in July 2021 and July 2022. The City subsequently elected to utilize the standard allowance for revenue replacement pursuant to the Treasury's Final Rule, allowing the full amount of the City's allocation to be used for government services.
Beginning in May 2022, the City Council appropriated ARPA funding to numerous community programs, infrastructure improvements, technology modernization efforts, public safety projects, economic development initiatives, and human services programs. Throughout the 2022-24 and 2024-26 budget cycles, the City Council approved additional allocations and reallocations of ARPA funds.
In November 2024, the City Council formally confirmed the City's use of the revenue replacement provision, approved additional reallocations of unspent funds, and authorized a series of Inter-Agency Agreements (IAAs) to obligate all remaining ARPA funding prior to the December 31, 2024 federal obligation deadline. These agreements were executed in accordance with the Treasury's Obligation Interim Final Rule and established the criteria for projects and programs eligible to utilize ARPA funding through December 31, 2026.
On April 28, 2026, the City Council approved additional reallocations of projected savings from several programs and projects to the Police Department Women's Locker Room Addition Project and authorized a contract amendment associated with implementation of the City's Enterprise Resource Planning (ERP) system. At that time, staff reported that $7,537,839 had been expended and $1,137,759 remained to be spent prior to the federal expenditure deadline.
The purpose of this report is to provide the City Council with a final update regarding the expenditure status of ARPA funding, identify any remaining balances projected to be unspent by December 31, 2026, and recommend reallocations among previously obligated projects to maximize expenditure of available federal funds and avoid returning any funding to the U.S. Treasury.
RECOMMENDATION
Recommended Action
Staff recommends the City Council:
A. Receive and file the American Rescue Plan Act Final Expenditure Update;
B. Reallocate and reappropriate $114,498.64 of projected unspent ARPA funding from projects identified in this report to previously obligated projects authorized under existing Inter-Agency Agreements;
C. Authorize the City Manager to execute any necessary amendments to existing Inter-Agency Agreements to implement the recommended reallocations;
D. Authorize any necessary budget adjustments to facilitate the expenditure of remaining ARPA funding prior to December 31, 2026; and
E. Authorize the City Manager to execute any related contract amendments necessary to complete expenditure of obligated ARPA funds.
Body
ALTERNATIVE TO RECOMMENDATION
In addition to the recommendation, there is the following alternative:
• Request additional information from staff.
FINANCIAL REVIEW
The staff cost to prepare this report is estimated at $1,012 and is included in the operating budget of the Financial Services Department.
ANALYSIS
ARPA Program Overview
The City of Claremont received a total allocation of $8,675,598 in ARPA funding through the SLFRF program. In November 2024, the City Council confirmed the City's election to utilize the standard allowance for revenue replacement under the Treasury's Final Rule. As a result, the City's full allocation qualified for use on government services with streamlined reporting requirements.
Prior to the December 31, 2024 obligation deadline, the City Council approved Inter-Agency Agreements with multiple City departments to obligate all remaining ARPA funding in accordance with Treasury guidance. These agreements provide the mechanism for reallocating funds among already obligated projects or programs but do not allow creation of new projects after the obligation deadline.
Current Expenditure Status
As of November 10, 2026, the status of ARPA funding is summarized below:
|
Status of Funds |
Amount |
|
Total ARPA Allocation |
$8,675,598 |
|
Funds Expended |
$8,003,455 |
|
Remaining Obligated Funds |
$672,143 |
|
Projected Additional Expenditures Before 12/31/2026 |
$672,143 |
|
Projected Unspent Balance |
$0 |
|
Total |
$8,675,598 |
ARPA Expenditure Progress
|
Category |
Allocation |
Expended |
Remaining |
|
Public Safety Projects |
$3,222,333 |
$2,753,273 |
$469,060 |
|
Housing & Community Assistance |
$1,392,290 |
$1,332,290 |
$60,000 |
|
Technology & ERP Projects |
$1,326,857 |
$1,326,857 |
$0 |
|
Economic Development Programs |
$738,141 |
$738,141 |
$0 |
|
Transportation & Traffic Calming |
$662,605 |
$622,923 |
$39,682 |
|
Human Services & CBO Programs |
$613,300 |
$517,599 |
$95,701 |
|
Workforce Support & COVID Response |
$469,322 |
$469,322 |
$0 |
|
Community Facilities & Recreation |
$225,320 |
$225,320 |
$0 |
|
Other Programs |
$25,430 |
$17,730 |
$7,700 |
|
Totals |
$8,675,598 |
$8,003,455 |
$672,143 |
ARPA Closeout and Expenditure Review
As the December 31, 2026 federal expenditure deadline approaches, staff conducted a comprehensive review of each project and program obligated through the City's Inter-Agency Agreements to evaluate expenditure progress, implementation status, and the likelihood that allocated funding will be fully expended prior to the deadline.
Projects reviewed included:
• ERP Financial System Implementation and related consulting services.
• Police Department Women's Locker Room Addition Project.
• Police Department Seismic Retrofit and ADA Improvements Project.
• Community Based Organization Funding programs.
• Homeless Services Funding.
• Commuter Rebate program.
• Traffic Calming and Transportation Projects.
• ADU Grant program.
Based upon current expenditure projections, staff has identified several projects that may not fully expend their allocation prior to the federal expenditure deadline. The estimated savings are reflected in the following table.
Projects Generating Available Balances for Reallocation
|
Department |
Program/ Project |
Projected Unspent Balance |
|
Community Development |
Commuter Rebate Program |
$2,350.11 |
|
Community Development |
ADU Program |
$60,000.00 |
|
Community Development |
Traffic Calming Projects |
$34,331.42 |
|
Financial Services |
ARPA Funding Administration |
$7,700.00 |
|
Recreation & Human Services |
CBO Funding Program |
$10,117.11 |
|
TOTAL AVAILABLE FOR REALLOCATION: |
$114,498.64 |
Recommended Reallocation of Funds
Staff recommends reallocating projected savings of $114,498.64 from projects that are either substantially complete or not expected to fully expend their remaining allocations prior to the federal expenditure deadline.
Consistent with Treasury guidance and the City's established ARPA obligation framework, staff recommends consolidating these available balances and appropriating them to the Police Department Women's Locker Room Addition Project. The project was obligated prior to the December 31, 2024 obligation deadline, is currently under construction, and has demonstrated the ability to fully expend additional funding prior to the December 31, 2026 expenditure deadline.
The proposed reallocation will maximize the City's utilization of available ARPA funding, reduce the risk of unspent federal funds at closeout, and ensure that all expenditures remain within projects previously authorized by the City Council and obligated through the approved Inter-Agency Agreements.
Staff recommends these reallocations because the recipient project:
• Was previously obligated through approved IAAs;
• Has active contracts or approved work scopes;
• Demonstrate sufficient expenditure capacity before the federal deadline; and
• Represent the lowest risk of ARPA funds remaining unspent.
Staff will continue monitoring all remaining expenditures through year-end and coordinate with departments responsible for implementation of obligated projects.
Based on current expenditure forecasts, staff projects the full utilization of available ARPA funding prior to December 31, 2026.
RELATIONSHIP TO CITY PLANNING DOCUMENTS
Staff has evaluated the agenda item in relationship to the City’s strategic and visioning documents and finds that it applies to the following City Planning Documents: Council Priorities, Sustainable City Plan, Economic Sustainability Plan, General Plan, and the 2026-28 Budget.
CEQA REVIEW
This item is not subject to environmental review under the California Environmental Quality Act (CEQA).
PUBLIC NOTICE PROCESS
The agenda and staff report for this item have been posted on the City website and distributed to interested parties. If you desire a copy, please contact the City Clerk’s Office.
Submitted by:
Jeremy Starkey
Finance Director