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HomeMy WebLinkAbout08/16/1994, C-8 - GRANT MANAGEMENT POLICY MEETING DATE: ��� i11111111�pns��l1 city of San lues OBISpo s-/6- 9¢ COUNCIL AGENDA REPORT MM NUMBER: FROM: Bill Statler, Director of Finance SUBJECT: GRANT MANAGEMENT POLICY CAO RECOMNMNDATION Adopt a resolution approving the City's grant management policy. DISCUSSION Overview With State takeaways and continued decreases in key general fund revenues, grant sources have become. an even more important part of the City's overall resource picture, especially in funding capital improvements. Although grant programs themselves are being reduced and becoming more competitive, actively seeking out grant revenues that assist in achieving identified City goals and objectives should nonetheless play a key role in the City's overall financial health strategies. The purpose of the proposed policy is to set forth an overall framework for guiding the City's use and management of grant resources by: ■ Setting forth the importance of grant programs in accomplishing City goals and objectives. ■ Establishing general concepts and framework for seeking and managing grant programs. ■ Identifying roles and responsibilities .in managing grant programs. ■ Establishing criteria for evaluating the desirability of grant programs. ■ Setting forth the City's policy in complying with single audit act requirements. Background As part of the 1993-95 Financial Plan process, a Grants Task Force was established and charged with comprehensively reviewing how the City can more aggressively pursue grant funding in financing projects and programs in light of the financial constraints currently facing the City. In addition to identifying functional areas where grant opportunities appear to be the most promising, the task force offered several recommendations on how we can most effectively use grant resources. The task force also recommended that the City adopt a grant management policy that clearly sets out a process and identifies responsibilities for assuring that grants are properly analyzed prior to submitting an application, properly managed after receipt, and properly closed out. ���� ��n►► pn � N city of San lues OBISpo i COUNCIL AGENDA REPORT The proposed policy has been prepared accordingly, and reflects the other key task force recommendations regarding the most effective areas for focusing our efforts - capital improvement projects - and the need for developing a simple, department-based system for tracking grant funding opportunities more aggressively on an ongoing basis. The proposed policy also provides for preparing a simple summary form when grants are awarded that highlights key program and financial areas regarding the program. FISCAL UAPACT There is no direct fiscal impact associated with adopting this policy; however, it will result in improved fiscal operations and more effective management of grant programs. ATTACHMENT Resolution approving the City's grant management policy EXHIBITS A. Proposed grant management policy B. Grant summary.form C. Findings from the grants task force RESOLUTION NO. (1994 Series) A RESOLUTION OF THE COUNCIL OF THE CITY OF SAN LUIS OBISPO ADOPTING THE CITY'S GRANT MANAGEMENT POLICY WHEREAS, grant sources are becoming an even more important part of the City's overall resource picture in light of state takeaways and decreased General Fund revenues; and WHEREAS, the Council desires to establish an overall framework for guiding the City's use and management of grant resources; NOW THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo that the grant management policy provided in.Exhibit A and attached hereto is hereby adopted. On motion of seconded by and on the following roll call vote: AYES: NOES: ABSENT: the foregoing Resolution was passed and adopted this day of , 1994. ATTEST: Diane Gladwell, City Clerk Mayor Peg Pinard APPROVED: fl G. rge , C' Attorney C'-0 -3 Uhlbit= _.. ... GRANT MANAGEMENT POLICY OVERVIEW With state-takeaways and continued decreases in key General Fund revenues, grant revenues have become an even more important part of the City's overall resource picture, especially in funding capital improvements. Although grant programs themselves are being reduced and becoming more competitive, actively seeking out grant revenues that assist in achieving identified City goals and objectives should nonetheless play a key role in the City's overall financial health strategies. The purpose of this policy is to set forth an overall framework for guiding the City's use and management of grant resources. GOALS ■ Set forth the importance of grant programs in accomplishing City goals and objectives. ■ Establish general concepts and framework for seeking and managing grant programs. ■ Identify roles and responsibilities in managing grant programs. ■ Establish criteria for evaluating the benefits and costs of grant programs. ■ Set forth the City's policy in complying with Single Audit Act requirements. GENERAL CONCEPTS AND FRAMEWORK ■ The City will aggressively pursue grant finding from federal, state, and other sources, consistent with identified City goals and objectives. ■ Aside from entitlement grants, the City should focus its efforts on securing grants for capital improvements. This approach will allow the City to compete for projects we might not otherwise be able to afford while maintaining financial independence should fixture grant sources diminish. Grants for operating purposes may be considered on a case-by-case basis after careful consideration of the benefits of the program and the ongoing impacts on the City if grant finding is no longer available. ■ Until the City's financial situation significantly improves, we should avoid grants that fiord "pilot" operating programs or short-term staffing enhancements to existing programs. Taking on these programs could ultimately aggravate the City's fiscal position should the desire for the program remain once the grant finding is no longer available. ■ The City will only seek grants when sufficient staff resources are available to effectively administer the program in compliance with grant requirements and successfully perform the grant workscope. ■ Indirect costs of administering grant programs will be recovered to the maximum extent feasible. ■ Operating departments have the primary responsibility for seeking out grant opportunities, for preparing effective grant applications, and for successfully managing grant programs after they have been awarded. ■ Operating departments should develop a simple system that tracks grant funding availability in their functional areas. Using this system, all capital improvement plan project requests will evaluate and document the ability of grants to assist in finding the project. ROLES AND RESPONSIBILITIES A. City Council 1. Approves grant management policies. 2. Approves all grant applications and delegates receipt and contract execution to the CAO if delegation is allowed by the grantor agency. B. City Administrative Officer 1. Receives grants and executes related contract documents when delegated to do so by the Council. 2. Develops, recommends and maintains grant management policies. C. Operating Departments 1. Develop systems for maintaining ongoing information regarding grant availability within their functional areas of responsibility. 2. Evaluate benefits and costs of specific grant programs on a case-by-case basis: a. Purpose of the grant program and its consistency with identified City goals and objectives. b. Additional staffing, office space, facilities, supplies or equipment that will be required if the grant is awarded. C. Ongoing impacts of the grant program after it is completed. d. Responsibilities of other departments and impacts on them in preparing the grant application or performing workscope if the grant is approved. C. Amount of indirect costs to be recovered from the grant. f. Total program costs, including portion funded through grant revenues and any required City contribution. g. Source of funding for any required City share. h. Compliance and audit requirements. 3. Prepare grant applications. a. Work with the grantor agency in identifying special program requirements and developing strategies for preparing a successful grant application. b. Complete grant application documents. C. Coordinate with affected departments as necessary. d. Prepare a Council agenda report requesting authorization to seek grant funding. This report should describe the grant program's conformance with this policy, including the results of the cost/benefit analysis. �-O 'J 4. Administer grant programs if awarded. a. Prepare a CAO report (or Council agenda report if required by the grantor agency) accepting grant award, including grant summary form, budget amendment request, and any other required City forms or documents. b. Coordinate execution of grant documents by the CAO and return executed documents to grantor agency. C. Notify affected departments of grant award. d. Maintain financial and other records in accordance with grant requirements. C. Complete and submit required reports, including requests for funds. f. Monitor grant expenditures and receipt of revenues. g. Coordinate on-site management reviews by the grantor agency during the grant term. h. Perform the grant workscope. 5. Complete grant close-out. a. Complete the grant workscope. b. Notify affected departments that the project is completed and schedule a "close-out" meeting if necessary to resolve any final procedural issues. C. Ensure final receipt of grant revenues. d. Prepare and submit any required grant close-out documents. e. Review grant file for completeness. f. Retain all necessary program and financial records for the period of time required by grantor agency. g. Coordinate any on-site management reviews or audits after the grant is completed. h. Resolve any audit findings. i. Ensure that the City's policy regarding single audit act requirements is implemented as discussed below. D. Department of Finance 1. Provides technical assistance to operating departments in preparing grant applications, submitting reports and maintaining records. 2. Coordinates preparation and distribution of single audit reports. E. Other Departments Provide assistance to the managing department as identified during the grant application and award process. SINGLE AUDIT ACT REQUIREMENTS Background The City is subject to the financial and compliance requirements of the Single Audit Act of 1984, which is applicable to all local and state governments receiving federal financial assistance exceeding $100,000 fora fiscal year. The purpose of the Act is to: ■ Improve the financial management and accountability of state and local governments with respect to federal financial assistance programs. ■ Establish uniform requirements for audits of federal grants. ■ Promote efficient and effective use of audit resources. ■ Assure that federal departments and agencies rely upon and use audit work performed during a single audit rather than performing the audit work themselves. Under this Act, federal grants are included under an inclusive single audit program which is incorporated into the City's annual audit and financial report preparation process. During the audit, tests are made to determine the adequacy of the internal control structure, including that portion related to federal financial assistance programs, as well as to determine that the City has complied with applicable laws and regulations. City's Policy Regarding the Single Audit Approach For federal grants included in the scope of the City's single audit approach, it is the City's policy that all financial and compliance issues have been met through the single audit, and follow-up audits to determine these issues are not necessary unless specifically related to findings or recommendations included in the single audit report As noted above, the purpose of the Act is to establish uniform audit requirements, promote efficient use of audit resources, and assure that federal agencies rely upon audit work already completed; its purpose is not to audit local agencies twice. Accordingly, the City will strongly resist any efforts by federal agencies to duplicate audit work already performed in complying with Act requirements. As such, whenever federal grantor agencies request final audits, the managing department should notify the Department of Finance in order to ensure a consistent response to these types of requests. MVcn,wTacz.cnR City of San Luis Obispo Exhibit GRANT PROGRAM SUMMARY GENERAL INFORMATION Graaf Title::: ;; Grant No General D hon of Giant WorlCst o e Criaatm n A:<en Contact Phone;I+.xo. Re< alible De artment De artmeat Contact Extension No. :: Coanc A':.: roval`.Date A cation>Date Award Date Est'd.Com Ietiaa Date:. GRANT COST AND REVENUE SUMMARY Pro CostSunmta Total > ;GrantPorttan- Staffing Contract Services Supplies &Other Operating Expenditures Capital Outlay Indirect Costs @ % of Direct Costs TOTAL GRANT COSTS AND REVENUES $ Is Hoerr it. Gtaut:Portu>n Detelm c . Is.aBud :Amdhftent;R ` nest:R' nsred? tf es ttshouldbe::attached OTHER COMMENTS note any significant or unusual compliance requirements) Use Reverse Side MMccssary to Provide Additional Information _. .. .. ....-. .. .. Pre reds ' ,. 72us form does not have to be typed—legible hendwrittee printing is preferred Exhibit MEMORANDUM March 2, 1993 TO: JOHN DUNN, CITY ADMINISTRATIVE OFFICER FROM: DEB HOSSLI, ADMINISTRATIVE ANALYST '�'� SUBJECT: FINDINGS FROM THE GRANTS TASK FORCE Background The Grants Task Force was charged with comprehensively reviewing how we can more aggressively pursue grant funding to finance projects and programs in light of the financial constraints currently facing the City. The Task Force was composed of Terry Sanville, Linda Asprion, Jeff Zimmerman and myself. In order to carry out our charge, each member of the group took responsibility for researching an area of the City. Our research primarily focussed on interviewing our own staff, staff from other government agencies (other cities, the County, the State, and the Federal Government), and the League of California Cities to determine what types of grants are currently available as well as their future funding outlook. Using the information gained from the interviews, the Task Force has developed the following overview that sets out where grants look promising, where they don't, and how they can best be used to augment the City's financial resources. The Task Force also prepared recommendations for encouraging and managing an aggressive grant program. Overview of Task Force Findings In summary the Task Force found that (attachment 1 provides a more detailed discussion of the grants highlighted in this section): ■ Grant opportunities appear to be the most promising in the areas of transportation and community development. The City stands to gain $1 .4 annually in this area by 1994-95. This is primarily the result of the City's recent designation by the Federal Government as an urban area. With this designation, the City will receive a pre-determined amount of entitlement funds for transit capital and operating expenses (between $400,000 and $500,000 annually starting in 1993-94) and community development activities that benefit the low and moderate income sector of the community (eligible projects are typically related to affordable housing and economic stability activities - we expect to receive approximately $800,000 annually starting in 1994-95). In addition, the Intermodal Surface Transportation and Efficiency Act (ISTEA), will provide approximately $185,000 annually for transportation construction projects. ISTEA will also sponsor a grant program that will make $600,000 available to the county on a competitive basis for transportation enhancement . 5 L V' projects. ■ On a lesser scale, grants and low interest loans to support fire services appear to be viable sources of funding. Competitive grants are available to offset the costs of specialized training, emergency medical services equipment, and hazardous materials activities. The Federal Government also offers low interest loans through the Department of Housing and Urban Development for fire station construction. Because these types of grants are competitive and funding levels change from year to year, it is difficult to estimate at this time the amount of dollars the City could ultimately receive. ■ At first glance, grants for police services appear promising. However, closer inspection reveals that most grants for police oriented activities primarily fund enhancements to existing programs for a limited period of time and cover costs of staffing and supplies. Examples include grants offered through the Office of Criminal Justice Planning to enhance victim assistance or drug and gang prevention programs. Grants of this nature can be very beneficial if the recipient agency is in the position to continue to fund the enhancement once the grant expires. Given the City's current financial limitations, however, grants that offer short-term commitments for enhancements to operations (e.g., staffing and supplies) will only serve to aggravate the City's financial position if the desire for the program remains once the grant funding is no longer available. ■ Grants opportunities in the area of recreation activities appear to be non- existent. Most grant programs benefitting recreation have traditionally been funded through State Bond Acts. Because these monies are now depleted, very few grant programs remain. Of those still remaining, funding is very limited (e.g., only $500,000 was allocated to all of southern California for Land and Conservation Program grants). ■ As with recreation, grants to fund utilities improvements (e.g., water and sewer) are non-existent. Long-term, low interest loans, however, are available to finance reclaimed water projects or upgrades to waste-water facilities. In summary, the Task Force has concluded that grants from State and Federal agencies represent a viable source of funding for the City to aggressively pursue, particularly in the areas of transportation, community development and fire services. In making this statement, however, it is important to emphasize our research has revealed that almost all the grant programs discussed above are structured to encourage local government to improve services or facilities, not to supplant funding for existing operations. In addition, many of the grants discussed above require some level of matching funds from the City and are expensive to administer due to cumbersome and excessive reporting requirements. Therefore, we should not view grants as a way to solve the City's financial problems as very few of the dollars derived from grants can be applied directly to this purpose. Rather, we should view them as an opportunity, on a case-by-case basis, to ease reductions in services as the City embarks on preparation of the 1993-95 Financial Plan. Task Force Recommendations Based on our research, the Task Force also offers the following recommendations: ■ Aside from entitlement grants, the City should focus its efforts on securing grants. for capital projects. This approach will allow the City to complete projects we might not otherwise afford while maintaining financial independence should future grant funding sources diminish. ■ Until the City's financial situation significantly improves, the City should avoid grants to fund "pilot" programs or short-term staffing enhancements to existing programs. Taking on these types of grants could ultimately aggravate the City's financial position should the desire for the program remain once the grant funding is no longer available. ■ The City should develop a simple, department based system that tracks grant funding availability more aggressively on an ongoing basis. A first step in this direction would be to require departments to evaluate the availability of grants and provide documentation of their potential as part of any capital funding request. ■ The City should adopt a grants management policy that clearly sets out a process and identifies responsibilities to insure that grants are: (1 ) properly analyzed prior to submitting an application (e.g., a cost-benefit analysis), (2) properly managed after receipt, and (3) properly closed out. The Finance Department has already completed a draft grants management policy for your consideration. Attachments: 1 - Grant Availability Listing Attachment 1 Grants Availability Listing The Areas Where Grants Look Promising... ■ TRANSPORTATION A. New Sources iSTEA =The Intermodal Surface Transportation Enhancement Act, funded with monies from the Federal Government, has two primary programs that will benefit the City: (1) STP Program (formerly the FAU Program) will provide approximately 185,000 annually over the next six years for transportation construction programs - this program requires a 12% match; and (2) Transportation Enhancement Act Program (TEA) will provide approximately $50 million annually over the next six years statewide (it is estimated that $600,000 will be allocated to our County annually) for transportation enhancement projects (e.g., bike trails, bike racks, etc.) - this program requires a 10% to 12% match and will be made available on a'competitive basis (we are currently applying for the first 1993-94 cycle). Section 9 - With the City's recent designation as an urban area by the Federal Government, we will receive an entitlement of $400,000 to $500,000 annually (beginning in 1993-94) for transit capital and operating costs - capital uses require a 20% match and operational uses require a 50% match. B. Ongoing Sources TDA - The City will continue to get Transportation Development Act monies from the State of California to support transportation activities. We currently receive approximately $560,000 annually, although it is likely that we will see a reduction in the coming year due to the State's fiscal crisis. Partnership Program - The City will continue to participate in this program. It provides reimbursement for roads maintenance projects of up to 50% from the State. The monies are made available on a competitive basis statewide so the reimbursements can fluctuate from year to year (e.g., we will receive a 20% reimbursement for 1990-91 projects which equates to approximately $240,000). ■ COMMUNITY DEVELOPMENT A. New Sources CDBG-With the City's recent designation by the Federal Government as an urban area, we will be eligible to receive approximately $800,000 annually in Community Development Block Grant entitlement monies beginning in 199495. CDBG monies must be used for projects that benefit low and moderate income (eligible projects are typically related to providing affordable housing and economic stability activities). The City must adopt a Comprehensive Housing Affordability Strategy (CHAS) and Housing Element before we can take advantage of the monies. The possibility of becoming an urban county is also being explored in an effort to increase the level of funding from the Department of Housing and Urban Development. HOME - This represents another housing related grant program funded by the Federal Government that the City may be eligible for if we opt to become an urban county. No estimates are currently available as to how large an entitlement grant we could receive. ■ FIRE A. New Sources Competitive grants are available from the State and Federal Government to offset the costs of specialized training, emergency medical services equipment, and hazardous materials activities. The Federal Government also offers low interest loans through the Department of Housing and Urban Development for fire station construction. Because these types of grants are competitive and funding levels change from year to year, it is difficult to estimate at this time the amount of dollars the City could ultimately receive. However, it does appear that grants represent a viable source of funding to augment fire related resources. The Areas Where Grants Look Less Promising At This Time... ■ POLICE There are still a significant number of State grant programs to support police oriented activities. However, most of these grants primarily fund enhancements to existing programs for a limited period of time and cover costs of staffing and supplies. Examples include grants offered through the Office of Criminal Justice Planning to enhance victim assistance or drug and gang prevention programs. Grants of this nature can be very beneficial if the 9 recipient agency is in the position to continue to fund the enhancement once the grant expires. Given the City's current financial limitations, however, grants that offer short-term commitments for enhancements to operations (e.g., staffing and supplies) will only serve to aggravate the City's financial position if the desire for the program remains once the grant funding is no longer available. ■ UTILITIES Apparently there is a general recognition that most utilities are funded through enterprise funds, and as such, grants are seldom made available. Low interest loans, however, are available to finance reclaimed water projects or upgrades of waste water facilities (we are currently taking advantage of a low interest loan to upgrade our waste water treatment facility). ■ RECREATION All State Bond Act monies for recreation activities have been committed, and as such, there are very few grants available for recreation activities. Of those that are available, the funding is very limited: (1) the Land and Conservation Program which funds projects to acquire or develop outdoor public recreation facilities sets aside $500,000 annually for all of Southern California (we have received these grants before); (2) the California Department of Forestry sponsors a tree planting program under which a city or county can receive a maximum grant of $200,000 annually (we are currently applying for the 1993 cycle); and (3) the Habitat Conservation Fund sets aside$2,000,000 statewide on an annual basis for habitat protection activities. ■ SOCIAL SERVICES With our urban status, we may be eligible for entitlement McKinney Act monies to support social service type activities (to offset our homeless shelter contribution as an example). However, the EOC currently applies directly for these monies - so unless we could get substantially more dollars - it makes sense for EOC to continue to apply directly.