The American Rescue Plan Act (ARPA) of 2021 was signed into law by the President on March 11, 2021. The bill provides $1.9 trillion to address the continued impact of COVID-19 on the economy, public health, individuals, businesses, and state and local governments. Out of the approximately $350 billion allocated to the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), the Town of Purcellville received a total of $10,559,844.  The first tranche was received in late June 2021. The second tranche of funding was transmitted to the Town, by the Commonwealth of Virginia,  Friday, July 22. 

The second SLFRF payment must be appropriated and allocated to the FY 2023 budget through a budget amendment.  As this second payment of $5,279,922 exceeds 1% of the Town’s total operating budget, a state-mandated public hearing was duly advertised for and held at the Town Council meeting this evening. 

Since receiving and formally allocating the first tranche of funding for FY 2022, the Town Council approved ARPA funding for a total of 15 projects; four of which are specifically for water and sewer infrastructure. A total of $3,959,941 was allocated from FY 2022 ARPA funding for water and sewer projects, with the remaining $4,096,059 FY 2023 ARPA funding requested for Town Council appropriation and allocation this evening.  

Instead of utilizing the complicated formula for calculating revenue loss, the Town chose to elect the “Standard Allowance” of up to $10 million to spend on government services under the Treasury’s expenditure category of Public Sector Revenue Loss for Provision of Government Services.  This enabled the Town greater flexibility to utilize ARPA funding for a broader range of government services.  There are currently 10 approved projects fully or partially funded in FY 2022, totaling $1,319,981, under this category.  One additional project added for formal action this evening is the water meter register upgrade project.  At the June 28, 2022 meeting, Council approved this project and requested it be brought back for action.  It is also included in the attached spending plan (Attachment 4).

A portion of the allocated and appropriated FY 2022 ARPA funding included $210,481 to develop grant programs to provide aid to small businesses, households, non-profits and façade improvement.  The ARPA Team has taken the opportunity to attend webinars and forums dedicated to the subject of grants and the management of subrecipients.  As I shared with Town Council in an email, to provide grant programs utilizing ARPA funding even  with contracted management, it will require an immense amount of coordination, development of intricate program parameters as well as in-depth review and audit processes, with the continued arduous long-term subrecipient monitoring. 

In lieu of utilizing ARPA funding for grant programs, it is staff’s recommendation that the Town Council consider utilizing Town funds.  Staff further recommends utilizing ARPA funding for select (one or more) nonrecurring FY 2023 budgeted items, related to the provision of government services, and reallocate the budgeted funds to FY 2023 grant programs.  This would remove the significant constraints and restrictions associated with the use of federal funding. 

Regardless of the funding mechanism, staff further recommends reaching out to the community to identify the best grant programs to meet the recognized needs. Such as, what and where is the greatest need and might it be best to begin with non-profits?  The Purcellville Non-Profit Expo is scheduled for Saturday, August 20, 2022.  Staff could take an opportunity at this event to speak with representatives from the non-profit community. 

Staff is presenting two FY 2023 budget amendments for Town Council’s consideration this evening; although, only one will need formal approval. Both versions of the FY 2023 draft budget amendments allocate and appropriate the entire 2^nd tranche of ARPA funding revenue, in the amount of $5,279,922 and the remaining balance of approved funding for the following projects:

1. 22-02 Hirst Reservoir Renovations ($1,230,000),

2. 22-03 New Finished Water Storage Tank ($1,346,059),

3. 22-04 Water Treatment Plant to Town Water Main Replacement ($1,520,000),

4. 22-06 Police Department Facility Renovations ($296,100), and

5. 22-15 Water Meter Register Upgrades ($250,000)

The difference in the two budget amendments is specific to the allocation of FY 2023 ARPA funding for grants.   The first FY 2023 Budget Amendment, BA 23-001 version A, (Attachment 2) includes $226,519 in FY 2023 ARPA funding for grant programs.  This allocation will be in addition to the FY 2022 approved funding ($210,481). In consideration of the option to forego utilizing ARPA fund for grant programs, the second Budget Amendment, BA 23-001, version B, (Attachment 3) does not allocate FY 2023 ARPA funding to grant programs, adding it back into the remaining unallocated 2^nd tranche ARPA funds (total unallocated $637,763).  Staff recommends the approval of version B of the budget amendment. 

The ARPA SLFRF is considered supplemental, and is intended to address the continued impact of COVID-19 on the economy, public health, individuals, businesses, and state and local governments.  The use of the funds is subject to conditions set forth by the US Treasury and should be utilized for qualified expenditures incurred between March 3, 2021 and December 30, 2024. As such, there is no negative fiscal impact.

NOTE: The Town is required to file quarterly project, expenditure and compliance reports to the Treasury (July 31, October 31, January 31, and April 30) with the final report due April 30, 2027.    

To Suspend the Rules (if desired)

“I move that the Council suspend the rules to allow action on BA23-001 the same night as the public hearing.” (approval requires two-thirds affirmative vote)

AND THEN (if motion to suspend the rules is adopted)

“I move the Town Council approve FY 2023 Budget Amendment BA 23-001, version B to appropriate and allocate the second tranche of the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund Non-Entitlement Unit distribution, in the amount of $5,279,922 and allocate and appropriate ARPA funding in the aggregate of $4,642,159 for the:

1. Hirst Reservoir Renovations, 
2. New Finished Water Storage Tank,
3. Water Treatment Plant to Town Water Main Replacement,
4. Police Department Facility Renovations, and the
5. Water Meter Register Upgrades.”

.    

OR

“I move the Town Council approve FY 2023 Budget Amendment BA 23-001, version A, to appropriate and allocate the second tranche of the American Rescue Plan Act Coronavirus State and Local Fiscal Recovery Fund Non-Entitlement Unit distribution, in the amount of $5,279,922 and allocate and appropriate ARPA funding in the aggregate of $4,868,678 for the:

1. Hirst Reservoir Renovations,
2. New Finished Water Storage Tank, 
3. Water Treatment Plant to Town Water Main Replacement,
4. Police Department Facility Renovations,
5. Grants for Small Businesses, Households, Non-Profits & Façade Improvement, and the 
6. Water Meter Register Upgrades.”