City grants and finance staff told the council that a mutual termination of a finance enterprise software contract left $217,860 in ARPA funds available for reallocation. Christine Howe (grants manager) explained reallocation options under the U.S. Department of the Treasury final rule, including cost increases on previously obligated contracts, replacement contractors, or substitute projects that meet the Treasury's allowable-activity requirements.

Staff identified three candidate uses: (1) increase funding for mental health subrecipient agreements (though two subrecipients are still completing work), (2) reimburse fund 70 for High Line engineering and cover CEI (construction engineering and inspection) costs associated with the High Line project, or (3) fund a replacement finance software contract (OpenGov budget/grants modules).

Howe and Bonnie Schroeder cautioned that using ARPA for a replacement finance contract could be technically justifiable for the budget module but would require additional backup documentation and might raise audit or monitoring scrutiny if it included the grants module or a different vendor not covered by the original obligation. Council member Dakota and others said they preferred applying the funds to the High Line project as the cleanest and most transparent option, and staff recommended replenishing fund 70 and using remaining funds toward CEI expenses.

No formal action was taken; staff will proceed with the preferred option and adjust budget amendments to reflect council direction if requested at subsequent meetings.