TO: Honorable Mayor & Members of the North Port Commission
FROM: A. Jerome Fletcher II, City Manager
TITLE: Discussion and Possible Action Considering Using Coronavirus State and Local Recovery Funds for the One-Time Standard Allowance of Revenue Loss, Allowing Expenditure Flexibility
Recommended Action
Approve using Coronavirus State and Local Recovery Funds for the one-time standard allowance of revenue loss, allowing expenditure flexibility.
Background Information
The City of North Port, a direct recipient of Coronavirus State and Local Fiscal Recovery Funds (SLFRF), received $4,213,679.50 on June 7, 2021, from the U.S. Department of the Treasury (U.S. Treasury) and is expecting the second tranche of $4,213,679.50 this June for a total of $8,427,359.00.
The interim final guidance, released on May 10, 2021, outlined the following eligible funding uses:
• Respond to the COVID-19 emergency and address its economic effects, including through aid to households, small businesses, nonprofits, and industries such as tourism and hospitality.
• Provide premium pay to essential employees or grants to their employers. Premium pay cannot exceed $13 per hour or $25,000 per worker.
• Provide government services affected by a revenue reduction resulting from COVID-19.
• Make necessary investments in water, sewer and broadband infrastructure.
Commission, during the fiscal year 2021-2022 budget process, approved the use of SLFRF for the following eligible use projects:
• Sumter and I-75 water and sewer extension: $3,400,000.00
• Toledo Blade and I-75 water and sewer extension: $ 813,679.50
In January, the U.S. Treasury released the final guidance on how the funds can be used. The most beneficial change is that we may choose a one-time standard allowance for revenue loss for up to $10 million. This standard allowance does not require any calculation or justification. This one-time option must be selected by April 30, 2022.
Selecting this option does not change the priorities already selected and approved by Commission. In fact, selecting this option will allow greater flexibility with the existing projects. For example, we can use the funds to install conduit for future broadband without providing the broadband, as required in the guidance for broadband.
By selecting the standard allowance for revenue loss, Commission may choose projects during the budget process that reflect the spirit of the funding purposes or other general government priorities. Funds may not be used for:
• Deposits into pension funds.
• Debt service or replenishing financial revenues.
• Satisfaction of settlements and judgements.
• Projects that undermine COVID-19 mitigation practices or conflict with the purpose of the American Rescue Plan Act (i.e., projects that do not benefit the community/support general government services).
Again, selecting the standard allowance for revenue loss is a one-time option. If the City does not select this option by April 30, 2022, the City can only use the funds for the funding priorities outlined in the interim final guidance.
Funding is subject to the December 31, 2024, obligation date and will need to be fully expended by December 31, 2026.
Strategic Plan
Efficient and Effective Government
Financial Impact
Commission will decide on how to use SLFRF funds in the budget process.
Procurement
Not applicable.
Attachments:
1. Coronavirus State and Local Fiscal Recovery Funds: Overview of the Final Rule
Prepared by: Valerie Malingowski, Grant Writer
Department Director: A. Jerome Fletcher, II, City Manager