On June 30, 2021, the Town of Purcellville received notice from the Commonwealth of Virginia confirming the Town’s total allotted funding, in the amount of $10,559,844, under the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (CSFRF/CLFRF) Non-Entitlement Unit (NEU) distribution. The Town is in receipt of the first tranche of funding ($5,279,922) and will expect the second tranche, in the same amount, to be distributed to the Town in June/July 2022.
Due to the necessity for an initial budget amendment, to formally accept and allocate the first tranche of funding, a public hearing was held July 13, 2021 to provide an opportunity for public comment on the preliminary proposed uses of the ARPA Funding (CSFRF/CLFRF). To ensure the community had an opportunity to provide input prior to the public hearing, Town Council directed the release of a community survey on June 25, 2021 to garner further input.
As noted in the June 22, 2021 staff report, many aspects of the ARPA funding usage, and associated guidelines, remain in flux. On May 10, 2021, the Treasury released the Interim Final Rule (IFR), which provides guidance and interpretation of the CSFRF/CLFRF established under the ARPA. This IFR is not the final version of the guiding document. We are still awaiting the final Final Rule. While the IFR and the Treasury’s Frequently Asked Questions documents have provided a general framework for the use of the funds, we expect additional changes and/or further clarifications will be made prior to the finalization of the IFR document. With this in mind, staff will continue to review and evaluate information as it becomes available in order to be able to provide the most up to date information available to the Town Council and to ensure we remain aware of other separate options and opportunities, through the ARPA.
At the September 28, 2021 worksession, staff noted a comprehensive spending plan was under construction and would be provided to the Council at the meeting this evening. The attached DRAFT Town of Purcellville ARPA Spending Plan (Plan) was developed as a result of multiple internal meetings with staff over the last 2-3 months. This document is intended to be a more comprehensive spending plan, providing detailed information on the individual projects. Many of these projects were identified in the the draft allocation and spending plan spreadsheets provided in previous Town Council meetings. Additionally for your review, profiles for projects quantifiable under the Revenue Reduction category have been added. It is important to note that there are project profiles that do not have the detailed information provided at this time. The background and justification information for these projects will be updated and a revised document will be provided at a subsequent Town Council meeting. As we work with Town Council and the community to engage in additional discussions on the use of the funding, this Plan will continue to evolve. It would also be beneficial for staff to have the opportunity for continued discussions with Town Council to ensure that staff and the Plan are in sync with the spending philosophy and expectations of the Council and community.
As a reminder, as we are still awaiting the final federal guidance, it is important to understand that additional time will be needed for staff to finalize the actual amount of reduction in revenue. The Finance Department completed the initial calculation estimating revenue loss, as of December 31, 2020 as approximately $500,000. This calculation is consistent with the formula as prescribed by the Interim Final Rule, further clarified by the Government Finance Officers Association’s ARPA Revenue Replacement Calculator. Subsequent discussion with the Town’s auditor, Brown Edwards, indicated modifications to the accounting basis will be required and are still being assessed; therefore, the amount of revenue reduction noted in the Plan remains an estimate and is expected to change upon final calculation.
While formal action associated with the development of this plan is not necessary this evening, the adoption of a budget amendment appropriating the specific funding for each project will be required prior to the use of the funds.