In a concerted effort to refill the Town’s water fund without resorting solely to increasing water rates, the Town Council approved a transfer of $300,000, of the Town’s American Rescue Plan Act (ARPA) money, from the Town’s General Fund to the FY-24 Water Fund Operating Budget.
The Town received a total of $3,152,038 through the Federal government’s ARPA funding to combat COVID-19 revenue loss, according to Town Manager Cathy Willets. Designating $300,000 toward the Water Fund will adequately address decreases in revenue production that occurred during prior fiscal years due to the COVID-19 pandemic.
An analysis was performed on a building owned by the Federal Emergency Management Agency, one of the town’s largest water consumers, and found that roughly $300,000 was lost in revenue over the three years following the on-set of pandemic travel restrictions, Willets said.
The $300,000 would be applied directly to all normal Fiscal Year 2024 water operating funds that are non-payroll in nature, including operating and maintenance costs, she said. Those type of funds account for $367,160 of the FY-24 Water Fund budget.
"We have large ticket items that will certainly eat up that $300,000 that will in turn save your utility fees," she said. Such items include operating supplies, chemicals, vehicles, repairs and maintenance.
The $300,000 of ARPA money had been sitting in the Town’s General Fund unallocated. Recently as part of efforts to reduce the Federal deficit, Congress proposed legislation to ‘claw back’ any unallocated ARPA funds sitting in municipal accounts, like the Town’s General Fund. So by officially allocating the money, it can no longer be pulled back.
According to the Department of the Treasury, the fund can be used to assist local governments in upgrading their water systems. The funding cannot be used to offset net tax revenue deposit pension funds, or debt services, nor for human resources or payroll. ARPA funding cannot be utilized to replenish financial reserves or rainy-day funds.
The Council thanked Town staff for their due diligence in creatively thinking.
Commissioner Valerie Turnquist has adamantly voiced against the Council’s recent approval to increase water rates by 36 percent per year for the next five years, and said she would not support a rate increase in next years budget.
Turnquist acknowledged that the transfer of the ARPA funds would go a long way in supporting the Water Fund. "I know we have a lot more digging to do to find the additional money, but I think this is a fantastic start," she said.
