In June 2021, the Town of Purcellville received notice from the Commonwealth of Virginia confirming the Town’s total expected funding, in the amount of $10,559,844, under the American Rescue Plan Act (ARPA) Coronavirus State and Local Fiscal Recovery Fund (SLFRF/CLFRF) Non-Entitlement Unit (NEU) distribution. The Town received the first tranche of funding ($5,279,922) and will expect the second tranche to be distributed to the Town in June/July 2022.
At the October 12, 2021 Town Council meeting, staff presented a preliminary comprehensive Draft Town of Purcellville ARPA Spending Plan (Plan) which was developed as a result of multiple internal meetings with staff. This Plan was developed to provide a framework for the Town as both a resource and an evolving formal spending plan document. As noted previously, this Plan will continue to develop over the ARPA funding period as the Town Council moves through the process of evaluating eligible projects and formally allocating the ARPA funding to the Council approved projects and initiatives.
After incorporating the comments and recommendations from the Council’s discussion of the Preliminary Plan at the October 12, 2021 meeting, a revised version of the Plan (V2) was presented for Council’s review and discussion at the November 17, 2021 Budget Worksession. As a result of this discussion, staff completed further updates to the Plan. The December 14, 2021 Plan revision (V3) incorporated the four (4) Water and Sewer Infrastructure priority projects; 1) Upgrade and Expansion of WWTP SCADA System; 2) Hirst Reservoir Rehabilitation; 3) New Finished Water Storage Tank; and 4) WTP to Town Watermain Replacement.
As a result of the action taken by Town Council at the December 14, 2021 meeting, staff completed an additional Plan revision (V4), to delineate the four (4) approved infrastructure projects. Additionally, since the last meeting, the U.S. Treasury released the much-anticipated Final Rule (FR) in early January 2022. Prior to this, the Treasury’s Interim Final Rule (IFR), released in May 2021, served as the primary guiding document for use of the SLFRF. As a result of feedback provided to the Treasury through its outreach and public comment process, the FR was drafted to provide broader flexibility and greater simplicity for the recipients.
One of the most significant changes with the FR is, in lieu of utilizing the complicated formal for calculating revenue loss, recipients may elect a “Standard Allowance” of up to $10 million to spend on government services. In order to avoid expending additional resources to manage the annual revenue loss calculation provided in the Treasury’s FR formula, the Town may choose to accept the standard allowance. With this in mind, staff placed the remaining projects in the Plan under the Public Sector Revenue Loss for Provision of Government Services category, enabling greater flexibility to utilize the remaining funding for a broader range of government services. Additionally, funds spent under this category are eligible for streamlined reporting and compliance requirements.
Since the FR was released, staff took the opportunity to meet to review and prioritize the remaining projects and to discuss the addition of other significant projects or initiatives in light of the information provided within the FR. The updated Spending Plan (V4), provided with this staff report, delineates the projects that have been formally approved thus far by Town Council and re-categorizes the remaining projects under the Public Sector Revenue Loss for Provision of Government Services category. As part of the prioritization process, staff created a focused proposed Plan for Council review and discussion. Out of all remaining projects previously provided, the nine (9) projects listed in the proposed Plan (see pages 8 & 15 of the Plan) were designated as the highest priority by the Town Manager and staff.
The first priority identified is Premium Pay to Public Sector Employees. The requested $272k would enable 58 qualified employees receive a one-time bonus. The amount of bonus is based on a tiered approach:
1st Tier - @ $7,500 ea. – Police
2nd Tier - @ $5,000 ea. – Water, Wastewater, Maintenance, IT
3rd Tier - @ $2,000 ea. ($1,000 PT) – Customer Service Positions
Additionally, a new priority added to the list as a result of the expanded FR guidelines is associated with Public Sector Capacity. The Treasury document Coronavirus State and Local Fiscal Recovery Funds: Overview of the Final Rule (https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf), published in conjunction with the FR, notes “Under the increased flexibility of the final rule, SLFRF funding may be used to support a broader set of uses to restore and support public sector employment.” Further, “Eligible uses include hiring up to a pre-pandemic baseline that is adjusted for under investment in the public sector… providing worker retention incentives, and paying for ancillary administrative costs related to hiring, support, and retention.” In the section delineated as Supporting and retaining public sector workers, it affirms recipients are able to utilize funding to “maintain current compensation levels, with adjustments for inflation” as well as “providing worker retention incentives, including reasonable increases in compensation.” The FR also highlights these updates were in response to requests made by numerous jurisdictions to have the ability to utilize funding to “retain employees through pay increase and other retention programs.” This section of the FR and Overview of the FR represents a defined desire and necessity for local governments to restore and support public sector employment. The ability to retain and compensate the talented and experienced professional municipal staff is critical to maintaining a strong and capable team and as a foundation for success. Employees who are treated well and work in an environment that helps them thrive, increases productivity thus enabling the jurisdiction to provide the best possible service delivery and to meet the goals of the organization and community.
The ability for the Town to provide the services the community needs and expects lies principally on the staff. To support and help retain this phenomenal workforce, for FY 2023 the Town Manager is proposing the use of $217,000 in ARPA funds to adjust pay ranges for 36 positions across the organization to provide equity and to remain consistent with the compensation and classification study completed in 2018. Additionally, $373,000 is requested to fund the FY2023 expense for the Pay for Performance program-initiated July 2021. This program is intended to reward outstanding performance as well as performance that fully meets the standards of each job. Goals and benchmarks are a critical aspect of a performance management program. It is critical to support and reward those achievements. It also plays a role in motivating and retaining staff. Additionally, many employees and departments carry a very heavy workload burden, employees consistently perform at an extremely high level with diminishing resources and should be recognized. While this program helps with employee motivation and retention, it must be consistently funded in order to function effectively. Another option available to the Town, not detailed in this staff report, is the use of ARPA funds for all or a portion of a personnel cost of living increase for FY2023.
Other priorities identified in the proposed Plan are:
- Permanent Pre-Chlorination Building for the Marsh & Jefferies Wells ($600k)
- Replacement of 1,000 Water Meter Registers ($225k)
- Critical Security Enhancements at the Water Treatment Plant, Facilities and Water Resources ($450k)
- Town Facility Security Enhancements (Town Hall, PD, Train Station and Tabernacle) ($50k)
- IT Core Infrastructure – Cybersecurity (organization-wide) ($100k)
- Assistance to Small Businesses, Households, Non-Profits, Façade Improvement Grants ($218k)
Details for each of these priority items/projects are provided in the Plan’s Project Profiles.
No formal action by Town Council, associated with the Plan document is necessary this evening; however, in order to formally allocate ARPA funding to any project or program, Town Council needs to formally approve a budget amendment for each project. It would help expedite the process for the use of the funding for Town Council to approve, at least in concept, the ARPA SLFRF Proposed Allocation Spending Plan as provided on page 8 of the Spending Plan document. If Town Council so desires, direction may be made for staff to present Budget Amendments, for specific projects, to Town Council for action at the February 8, 2022 meeting.