Laserfiche WebLink
(AV er iffe 1880 M.in S-4 7NN55038 <br />'EstaffishedI857 657-429-3232., T-6Si429-8629 <br />Memorandum <br />Date: April 27, 2022 <br />To: Honorable Mayor and City Council Members <br />Through: Mark R. Statz, City Administrator/City Engineer <br />From: Bruce DeJong, Finance Director <br />Item: ARPA Revenue Loss Calculation Method <br />The City has received grants from the US Treasury of approximately $430,000 for coronavirus relief <br />under the provisions of the American Rescue Plan Act (ARPA). These funds may be used in a variety <br />of ways specified by the rules enacted by the Treasury Department. The funds may be expended in <br />2021 through 2026 under certain circumstances, but most communities anticipate using the full <br />allotment by 2024. <br />Part of the reporting requirements direct us to choose a method of calculating revenue loss. This <br />revenue loss is a theoretical calculation that compares our actual revenue from years ended December <br />31, 2020, 2021, 2022, and 2023 to projected revenue according to a formula created by the Treasury <br />Department. To simplify things for small communities, the rules allow cities to claim a revenue loss of <br />their full allotment of funds not to exceed $10 million. This is a one-time only choice to be made with <br />the first reporting cycle. <br />Staff believes this choice of that standard allowance is the most prudent as it does not require the <br />annual calculations and additional reporting. The standard allowance choice also allows additional <br />flexibility in the expenditure of the funds. <br />We can use ARPA funds on government services up to the revenue loss amount, whether that be the <br />standard allowance amount or the amount calculated annually. Government services generally include <br />any service traditionally provided by a government. Government services is the most flexible eligible <br />use category under the ARPA program, and funds qualify for streamlined reporting and compliance <br />requirements. <br />Choosing the revenue loss actually expands the categories of allowable use for the funds, but does not <br />preclude the city from spending funds on any other allowable category of specific relief. For this <br />reason, staff believes selecting the standard allowance is the best option. <br />Treasury Rules Explanation: https:Hhome.treasury.gov/system/files/136/SLFRF-Final-Rule- <br />Overview.pdf <br />