2021-10-27 WS & Council Meeting Packet

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Other possible uses include: Website Updates Water, Sewer, and Stormwater projects o Pond dredging and backyard drainage issues o Other programs not yet contemplated o Connection Fee Discounts (Water; commercial) EDA Programs o CenterStage o Other programs not yet contemplated The second way is to determine if the city experienced a revenue loss according to a formula. This method assumes that anything less than a 4.1% increase in revenues is a loss for purposes of this calculation. I have used a spreadsheet created by the Government Finance Officers Association to perform our revenue loss calculation. The results show a loss of $351,759 for 2020. I have included the relevant pages from the spreadsheet and our annual financial report in the attachments. The loss of $351,759 exceeds our allocation for 2021. That means that all of our funding $211,739.86 in current year funding may be used to provide general governmental services. Government services can include, but are not limited to, maintenance or pay-go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services. While this does represent a significant financial benefit to the city, it is important to note that one of the foundational ideas for sustainable finance is that one-time revenues should be used to fund one-time expenditures. We want to be careful as a staff that our recommendations don’t come with significant expenditure commitments after the initial funding source is depleted. The guidance specifically prohibits using ARP funding to pay principal or interest on existing debt because that use does not provide current government services. We are able to carry over the additional revenue loss of $140,019.14 to apply against our 2022 allocation. We also get another look at revenue loss from 2020 compared to 2021 for the remaining $71,720.72 of our 2022 allocation. We only increased our tax levy by 0.87% for 2021, so we will likely have revenue well under the 4.1% increase assumed by the formula, which leads to another revenue loss determination. It is important to note that this program can extend for a long time frame. We are obligated to have all the funds committed by December 31, 2024 and expended by December 31, 2026.