In December 2019, a novel coronavirus (COVID-19) was first detected in Wuhan City, Hubei Province, China. The Centers for Disease Control and Prevention (CDC) declared the virus to be a severe public health threat. On March 15, 2020, the City Manager declared a state of emergency in the City of Sparks related to the global outbreak of COVID-19. On April 1, 2020, Governor Sislolak issued a stay at home order for Nevada. As of December 28, 2020, the World Health Organization (WHO) reported nearly 80 million confirmed cases of COVID-19, leading to 1,761,381 deaths in 206 countries. As of December 29, 2020, Washoe County reported 35,132 confirmed cases and 474 deaths.

On July 27, 2020, the City Council considered conceptual uses of CARES Act funding received by the City of Sparks and directed the City Manager to work with other entities in the region to determine the best uses for the funds. Based on that direction, in November of 2020, the City of Sparks, City of Reno, and Walgreen Co. (Walgreens) began discussions regarding using CARES Act funds to pay for rapid COVID-19 testing for the public at Walgreens locations. Those discussions resulted in an agreement between the three parties, the terms of which are discussed in the Analysis section below. Because time was of the essence, the City Manager approved the agreement on December 7, 2020. Testing under the agreement became available on December 28, 2020. This agenda item provides City Council the opportunity to ratify the City Manager’s approval of the agreement.

The agreement contains the following terms:

1. Walgreens will provide up to 30,000 rapid COVID-19 tests, which will be provided to the public in the region at no charge.
2. Sparks and Reno will pay Walgreens $125 per test, or a total of $3,750,000, divided as follows:
   1. Sparks will pay Walgreens $1,125,000, or 30% of the total fee.
   2. Reno will pay Walgreens $2,625,000, or 70% of the total fee.
3. Tests will be available at four Walgreens locations in Sparks and four Walgreens locations in Reno.
4. Walgreens expects to have test results within 24 hours of testing and will communicate test results in accordance with applicable guidance.
5. In the event Walgreens does not administer all 30,000 tests before February 28, 2021, the parties may agree to extend the term of the agreement or Walgreens will refund the Cities for the unused tests at $125 per test, divided 70% to Reno and 30% to Sparks, like the original payment.
6. If the Cities want Walgreens to provide additional testing after the initial 30,000 tests, the Cities will pay $125 per test going forward.

Sections 1.30.010 and 2.20.025 of the Sparks Municipal Code empower the City Manager to proclaim the existence of a local state of emergency and to request state and federal assistance when the City of Sparks is affected by a public calamity and the City Council is not in session. State law authorizes local governments responding to an emergency to “enter into contracts and incur obligations necessary to combat such an emergency or disaster, protect the health and safety of persons and property and provide emergency assistance to the victims of such an emergency or disaster.” NRS 414.090(3). Because the COVID-19 emergency is ongoing, these emergency provisions apply to contracts necessary to respond to the COVID-19 pandemic.

On December 7, 2020, the City Manager approved the agreement for the following reasons. The terms and conditions of the agreement were reviewed by staff and deemed acceptable. The agreement expands the availability of COVID-19 testing in the region, a service desperately needed in the community due to the COVID-19 pandemic. Improving access to testing is in the best interests of the health and safety of residents of Sparks. The testing services provided through the agreement are needed and time is of the essence. 

In addition, the use of CARES Act funds is appropriate to pay the costs of the agreement because: (1) the contract is a necessary expenditure due to the public health emergency; (2) the costs were not accounted for in the City’s FY20 or FY21 budgets; (3) the costs will be incurred during the period between March 1, 2020, and December 31, 2021; and (4) the CARES Act funds are not being used to offset a revenue shortfall caused by the COVID-19 pandemic.

1.   City Council may ratify the agreement as recommended by staff.

2.   City Council may reject the agreement and provide further direction to the City Manager.

I move to ratify the agreement (AC-5725) between the City of Sparks, City of Reno, and Walgreen Co. to provide up to 30,000 point of care tests for COVID-19 at Walgreens locations, with Sparks's share being $1,125,000.00.