MORGANTOWN — Updated guidelines released by the U.S. Department of the Treasury have essentially removed restrictions on how cities and counties can spend up to $10 million in American Rescue Plan money.
Monongalia County Commissioner Sean Sikora said the change was made to the revenue replacement component of the ARP guidelines, which would allow a government entity to calculate and replace lost revenue.
For example, Monongalia County is looking at about $20.5 million in ARP dollars and has calculated COVID-related losses of about $3.2 million. Under the original guidelines, the county could replace that loss with $3.2 million out of its ARP allocation. That money could be used by the county how it saw fit while the rest would be restricted to the guidelines established by the U.S. Treasury.
Now, the Treasury is allowing a standard loss deduction of up to $10 million.
Sikora said the original formula to establish lost revenue started by calculating a growth rate over the three years prior to the pandemic, then comparing that with a baseline rate set by the Treasury.
“It was a pretty complicated calculation,” Sikora said. “My guess is probably what they were seeing is most entities were having a lot of trouble doing that calculation and they were probably just getting bombarded. So they came out with a standard number you could claim.”
According to Sikora, the commission will go ahead and report the $3,207,660 in losses that it calculated and not the $10 million catch-all, noting, “we had already done all of the leg work.”
Morgantown City Manager Kim Haws said the new guidelines will significantly impact how the city can use the second $5,621,754.50 ARP allocation expected this spring or summer.
All told, the city will receive $11,243,509.
“With the new guidelines, we’re going to have an interesting dilemma when we start determining where the balance of the $5.6 [million] is going to go,” Haws said in response to a question about the interplay of ARP dollars and the city budget.
“Now, it’s not going to have to go to specific projects like the first five did. So we need to be very smart in how we leverage those dollars. If we can use some of the ARP funds to stimulate and bring in additional infrastructure dollars or other kinds of grant dollars, and use it as a match, we’d do that. So there will be more mixing now than we anticipated originally.”
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