There’s something for everyone in Round XII of the Regional Economic Development Council initiative.

Apply using the NYS Consolidated Funding Application by July 29 at 4 p.m. for a variety of funds to help your community thrive.

To help you quickly identify potential funding, we created the following cheat sheet, summarizing and categorizing funding available. Please note: While every effort has been made to ensure accuracy, you can see complete details at REDC Round 12 Program Fact Sheets. Also, a few items fall into more than one category, so you’ll see them posted a couple of times in the table that follows.

If you need a little extra time to explore the funding available, call RBT CPAs. You’ll have a trusted partner to take care of your taxes and accounting so you can focus on learning about and securing funding for your community.

ROUND XII
REGIONAL ECONOMIC DEVELOPMENT COUNCIL INITIATIVE CHEAT SHEET

Thanks to New York’s Aid and Incentives for Municipalities (AIM) program, since 2006 New York state has provided AIM funds to cities, towns, and villages for use as they deemed fit – for anything from water and sewer to police and fire services. In part, AIM was designed to provide extra support to fiscally challenged local governments. Over time, it has done a lot more.

Often referred to as revenue sharing, in 2019-20, the Great Recession hit, and AIM funding partially shifted from the state’s general fund to local sales tax collections.  The Comptroller’s Office took over responsibility for doling out these shifted funds.

For the 2022 State Fiscal Year (SFY), as the 2023 Executive Budget Impact Report notes, “Currently, 846 towns and 479 villages receive a total of $59.1 million in AIM-Related payments funded through local sales tax collections. The Executive Budget ends this practice and resumes State General Fund support for these towns and villages through the traditional AIM program, allowing county governments to retain a greater amount of local sales tax revenue annually.”

For information about 2022 AIM funds by municipality, click here. The NYS Office of Comptroller website has numerous resources with additional information, including how to account for AIM funds. Of course, if you need any accounting or tax assistance or advice related to AIM or other funding, RBT CPAs is always here to help — just give us a call.

To recap: The Coronavirus Local Fiscal Recovery Fund will provide $19.53 billion to support tens of thousands of non-entitlement units (NEUs) of local government as a part of the American Rescue Plan Act (“ARPA”) funding passed through New York State. The funding was allocated to NEUs using a specified formula based on population. The allotment is capped at 75% of the annual total operating budget in effect as of Jan 27, 2020. By now, all of the NEUs should know their allocation and have received the first traunch.

The second payment will be made no earlier than 12 months later, expected in July 2022

Generally, funds must be spent by December 31, 2024. Alternatively, contract funds obligated by December 31, 2024, may be spent through December 31, 2026, meaning that contracts should be signed, and funds encumbered by December 31, 2024, if not already spent. Funding can be used for eligible costs beginning March 3, 2021.

Now that the Final Rule has been issued, determining eligible costs can be much simpler. The Final Rule included a $10M safe harbor or minimum cap on eligible spending for government purposes. This broadens eligible costs and simplifies documentation. Above and beyond this limit, there are options to improve your community. Specific eligible uses include:

• Respond to the COVID-19 public health emergency or its negative impacts
• Respond to workers performing essential services during the COVID-19 public health emergency by providing premium pay to eligible workers or grants to eligible employers
• Replace lost public sector revenue
• Invest in water, sewer, and broadband infrastructure (water includes stormwater)

For reference, ineligible uses include:

• Directly or indirectly offset a reduction in revenue due to tax cuts enacted from March 3, 2021, through last day of fiscal year in which funds have been spent
• Deposit to a pension fund (extraordinary contribution)
• Debt service

While you may still be working through the planning process, keep in mind that, as a NEU, you have reporting responsibilities to the U.S. Treasury. NEUs who receive more than $10 million in ARPA funding must follow the quarterly reporting schedule and NEUs receiving less than $10 million will follow an annual reporting schedule. As it is named, the Project and Expenditure Report requires information to be provided pertaining to project description and status, such as not started, completed less than 50%, more than 50% or completed. Some of the items included in the report are current period and cumulative obligations, and current period and cumulative expenditures. In addition, NEUs will be required to submit a copy of the signed terms and conditions agreement and the signed assurances of compliance with Title VI of the Civil Rights Act of 1964, both of which had to be submitted to NYS when the application for funding was made. A copy of the actual budget documents validating the top-line budget total provided to NYS must also be included.

In December the Treasury Department issued a guide to accessing the Treasury portal, setting up the municipality’s account and submitting documentation. The current version of Treasury’s guidance is available at set up guidance. Reporting guidance is contained in the SLFRF Compliance and Reporting Guidance, the most recent version of which was issued February 28, 2022.

For NEUs receiving less than $10 million in funding, the first annual Project and Expenditure Report is due April 30, 2022 and covers the period from March 3, 2021 through March 31, 2022. The Project and Expenditure Report is required to be filed annually; however, it is important to note that, while the first report covers slightly more than a year, the following annual reports cover the fiscal year which ends on March 31.  It is critical, then, to make sure that your accounting system can provide the information within that time frame and that appropriate accruals are made through March 31 and reversed in the following month to avoid over-inflating the expenditures at the following May 31 or December 31, depending on your fiscal year.

Finally, be aware that this funding is subject to Single Audit Act (“Uniform Guidance”) requirements. Your municipality may never have had a single audit before. If you expend $750,000 or more of federal funding from ALL sources in a fiscal year (including ARPA), you will be required to have a single audit. Expenditures are determined on an accrual basis, meaning that the expenditures are evaluated based on when the cost was incurred, not when the payment was actually made.  Note that the period under consideration is your fiscal year, not the federal fiscal year. Also note that when you receive the funds is not part of the determination.

ARPA funding is a tremendous chance to invest in your community. Proper accounting and reporting is key to maintaining compliance, and maximizing the impact of this once in a lifetime opportunity. Give RBT CPAs a call to partner with you on all your ARPA funding matters.

Over the next five years, the Federal government will invest $1.2 trillion to fix, maintain, and upgrade aging roads, bridges, railways and railroads, airports, water systems, broadband, cybersecurity, the electricity grid, and a lot more. What can you do now to maximize the impact IIJA can have on your local community and residents?

Get to know IIJA, so you’re ready to maximize opportunities.

Here’s an overview. To learn what to apply for, contacts, and how to get ready to rebuild, visit Building a Better American: A Guidebook to the BiPartisan Infrastructure Law for State, Local, Tribal and Territorial Governments and Other Partners (it was created to ensure all communities know how to qualify for funding, no matter their size or politics). For insights on how to make the most of IIJA locally, The New York State Conference of Mayors website has a number of resources to help you maximize IIJA benefits locally. You may also want to review A Federal Investment Guide for Local Leaders, created by Accelerator for America, the United States Conference of Mayors, and Drexel University.

You’ll also want to stay up-to-date on what’s happening in New York by following Governor Kathy Hochul and connecting with your congressional representatives. Governors are encouraged to appoint staff to manage the flow of funds; get input from Tribal leaders, county officials, civil rights and territorial leaders; identify how American Rescue Plan (ARP) funds can help maximize IIJA funds (i.e., use ARP funding to train workers to build the infrastructure; rehire public sector workers to manage funds; and start water, sewer and broadband projects to complement IIJA investments); contact the State Department of Transportation for highway and bridge formula funding; and identify priorities for competitive grants.

In addition, consider creating or updating a capital needs assessment plan to identify and prioritize potential projects for IIJA funding. For example, look at potential projects to fix, maintain, and upgrade roads, bridges, rails, and airports. Start mapping and taking an inventory of lead pipes that are part of your water delivery system. Identify gaps in broadband and opportunities to install electrical vehicle chargers. Evaluate environmental resilience and remediation plans.

Concurrently, you may want to create or update your own operation’s infrastructure needs assessment. Do you have a streamlined bidding and project management system? What about the systems and capacity to manage, track, and report on funds to meet compliance requirements (and be prepared should an audit be required)? Are there processes you should move online (for example, permit applications)? Is your cybersecurity ready to protect more data and handle more traffic?

There’s also talent to consider. With the great resignation underway, employers are challenged to create work environments and employment deals that help attract, engage and retain valued talent. Do you anticipate having to increase staff to support extra demands or new capabilities needed as a result of the IIJA? Now is the time to identify staffing needs and get recruiting activities underway.

While you may not be ready for any groundbreaking ceremonies, there is still plenty to do. Take advantage of the time you have now to prepare the plans, infrastructure, systems, and staff you need to maximize the difference IIJA can make in your community for years to come.

Remember, your partners at RBT CPAs are available to help you maximize Infrastructure Law opportunities from accounting, tax, and auditing perspectives. Find out how – contact us today.

President Biden signed the American Rescue Plan Act (ARPA) into law on March 11, 2021, in order to support the U.S. economy that continues to feel the impacts of the ongoing Covid-19 pandemic.

The pandemic continues to impede tax revenues and increase costs across the nation along with highlighting disparities amongst the most vulnerable in the country. The ARPA stimulus package of $1.9 trillion dollars of federal funding brings communities an unprecedented opportunity to strategically plan for how to leverage the funds to rebuild a stronger, more resilient country with a long-term vision of a more equitable environment for all Americans.

The federal funding is to be used to support a sustainable economic recovery from the pandemic; allocated funds for under the ARP Act, in the State and Local Fiscal Recovery Funds (SLFRF) can address municipal infrastructure issues in four eligible use categories according to the US Department of the Treasury’s Final Rule, just released on January 6, 2022, and it goes into effect April 1, 2022.  Until that time, the Interim Final Rule remains in effect after which the Treasury can take action to enforce Final Rule to ensure compliance and accountability. The Final Rule Overview is here for reference.

The Treasury began distributing funds to governments in 2021 and were encouraged to spend it under the Interim Final Rule.

To date, according to a 2022 press release, the Treasury has distributed more than $245 billion to state, local, and tribal governments as a part of the SLFRF program, accounting for over 99% of funds eligible to be disbursed in 2021. The expeditious allocation of these federal resources must address state and local communities’ most urgent and critical needs in a maximized manner that is lasting and inclusive, and must have powerful positive impacts on public services that will spur economic growth benefits for those most impacted during the pandemic. The Center on Budget and Policy Priorities found that state governments have appropriated nearly 70% of their available funds as of November 2021. According to a January 6, 2022 statement of compliance, such significant steps include “initiation of procurement or grant making actions, detailed planning of projects or programs, appropriation of funds, and other significant planning steps.”.

The allocation of the federal funds provides the governing bodies with the flexibility to address unique budget challenges associated with the ongoing pandemic.

Each municipality must determine and commit to addressing their specific needs and  consider the most advantageous solutions with a clear understanding of their particular community’s needs. The key is to align the funding with the diverse and evolving needs of their  citizens to ensure a broad scope and depth that can allow coverage of essential government services. It is essential to stay on top of the evolving regulations and forthcoming updates on how to comply and report,proceeding with caution, carefully maintaining compliance.

In response to carefully considered feedback, the Treasury’s Statement of Compliance on the SLFRF, approved uses of the funds have been clarified to support strategic planning:

• Replacing lost revenue to maintain public services in decline,
• Restoring the state unemployment trust fund or paying back advances from Title XII under the Social Security Act for payment of benefits
• Providing premium pay to retain essential workers
• Hiring up to 7.5% more employees above pre-pandemic levels
• Investing in water or sewer projects, including dams or reservoir rehabilitation issues with stormwater, private wells, or remediation of lead in water
• Modernizing broadband infrastructure and cybersecurity along with offering access to affordable programs to access the internet
• Investing in neighborhoods with abandoned or vacant properties
• Determining presumptive eligibility for low to moderate income households
• Offering public health insurance subsidies and paid family and sick leave

Scrupulous planning that complies with federal standards will pay off in the future.

The heart of the ARP’s vision relies on policies, and the implementation of those policies by all stakeholders who must carry them out fairly and equitably. Be sure to maximize your allocation by building net worth in this once in a lifetime opportunity to invest wisely. Moreover, feel free to contact our dedicated team of professionals at RBT who specialize in helping government clients. We look forward to providing you with personalized services and answering industry-specific questions.

Cities, towns, and villages can opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses from locating within their jurisdictions, but legalization is a done deal. Adult-use cannabis possession and use by adults 21 years of age or older following the Marijuana Regulation & Taxation Act (MRTA), is legal throughout New York State. Less than a month away from the deadline, the countdown is on to opt-out of collecting marijuana tax! With just a few weeks left to make a final municipal decision, what are the pros and cons, and what is the tax revenue loss like if your municipality opts out?             

Opt-out Deadline

To opt-out of allowing adult-use cannabis retail dispensaries or on-site consumption licenses, a municipality must pass a local law by December 31, 2021. The impending deadline was designed to give the marijuana markets some consistency and now that the clock is ticking to decide, many towns, cities, and villages are scrambling to schedule public hearings on the issue in the coming weeks before it’s too late. If a municipality does not take any action by December 31, 2021, the municipality will be automatically included, and unable to opt-out at a future date. However, a municipality may opt back in, to allow either, or both, adult-use retail dispensary or on-site consumption license types by repealing the local law which established the prohibition.

Local Control

Except for the opt-out provision, all municipalities including counties are blocked from adopting any law, rule, ordinance, regulation, or the prohibition on the operation or licensure of adult-use, medical, or cannabinoid hemp licenses. However, towns, cities, and villages can pass local laws and regulations governing the time, place, and manner of adult-use retail dispensaries and on-site consumption licenses as long as the local law and regulations do not make the operation of the license unreasonably impracticable as determined by the Cannabis Control Board. For example, cities, towns, and villages are permitted to pass laws and regulations on local zoning and the location of licensees, hours of operations, and adherence to local building codes. Municipalities may not issue local licenses to cannabis licensees.

Taxes

Municipalities that do decide to opt-out will not be eligible to receive any of the revenue generated from adult-use marijuana sales. MRTA establishes a 13 percent tax on adult-use marijuana sales, 4 percent of which is distributed to local governments based on where the retail dispensary is located. 25 percent of the tax revenue goes to the county and 75 percent goes to the cities, towns, or villages within the county as a proportion of cannabis sales. If a town and a village within the town both allow adult-use sales, the revenue will be distributed based on an agreed-upon distribution agreement between the town and village. If no such agreement exists, then the revenue distribution between the town and village will be divided evenly.

Your Municipality’s Decision

Final appointments to the Cannabis Control Board and the Office of Cannabis Management were not made until September 2021—six months after MRTA became law—and the Cannabis Control Board didn’t hold their first meeting until October 5, 2021. The delays have caused a widespread wait-and-see approach by municipalities with many opting to get on board when there is a clearer picture of what retail marijuana operations will look like after further state regulations are announced. Ultimately gaining public feedback and weighing the pros and cons of tax revenue generation should help you make the best decision for your community. If you have questions regarding this deadline, we can help. Contact our dedicated Government group at RBT to schedule a consultation today. Additionally, if you would like to submit feedback or topic ideas for future articles our team produces, please feel free to contact us at TLideas@rbtcpas.com.

Sources: Cannabis.ny.gov, Ny.gov/local-government

With many major revenue sources in decline, there is a heightened interest in exploring innovative ways to control local government and school district costs by eliminating duplicate services. If your community hasn’t yet considered county-wide shared services, what are you waiting for?

Although the concepts of shared services and functional consolidation are not new, they are receiving greater attention in the media and from taxpayers and policy leaders at all levels of government. Just last week, State Comptroller Thomas P. DiNapoli announced 30 local governments that ended 2020 in some form of fiscal stress. Shared services present a viable option for reducing costs or slowing growth in spending without necessarily impacting service quality for local governments, including counties, cities, towns and villages, school districts, and fire districts. Below we will provide tips to local officials interested in exploring greater degrees of cooperation with other local governments.

What is CWSSI?

The county-wide shared services initiative, or CWSSI, expands on New York State’s ongoing commitment to reduce property taxes and modernize local government services by fostering new shared services and enhancing the existing collaborations already in place. The Department of State offers several comprehensive programs to incentivize and aid local government efficiencies. The CWSSI is extended from December 31, 2021, through December 31, 2024, so that each county CEO outside of New York City is required to continue to convene a Panel to:

• Revise or update a previously approved CWSSI Plan or developing a new Plan.
• Provide information the Secretary of State might request under the law.

Are there other 2021 CWSSI updates to be aware of?

The short answer is yes. The 2021 Amendments to Section 239-bb also made the following changes to add flexibility for State Matching Funds:

• Counties can choose one of two statutory match years for each new action implemented. Each county and its participating local government entities may be eligible for State Matching Funds from each new action that generate net savings from implementation during the statutory match years of either: (i) January 1st through December 31st of the year immediately following Plan approval, or (ii) July 1st of the year immediately following approval and transmission of a Plan through June 30th of the subsequent year.
• Counties will be able to submit one Match Application per year and must choose a match year for each action in the Application. The Match Application will include sections for actions implemented during both the January 1st through December 31st and July 1st through June 30th period. Counties may choose to implement an action for the first time during either period, notwithstanding the implementation period designated in an approved and submitted Plan.
• Actions commencing before the beginning of a selected period are not eligible for State Matching Funds for that period.

Should I consult with residents?

Yes! In fact, it’s a requirement. The CEO, who is the Panel Chair, must hold a minimum of three public hearings to solicit input from citizens, civic, business, labor, and community leaders. Any individuals or groups who will be impacted and can directly or indirectly influence the implementation of the project will have valuable input. Follow these steps to conduct a fruitful shared services survey:

• Identify stakeholders
• Develop a focused mission statement and goals
• Identify viable options for accomplishing goals
• Select realistic programs
• Study options thoroughly and weigh all options
• Deal directly with problems

Ultimately, considering shared services is an investment in your community’s future at a time when it will help to fuel the longer economic recovery from the COVID-19 pandemic. To give you an idea of the savings potential that was submitted in 2018, 23 county-wide shared services plans generated an estimated first year savings of $49 million. Of the 2018 highest savings highlights, three Hudson Valley counties grabbed a spot in the top five, including Westchester ($7.5M), Orange ($5.0M), and Rockland ($4.7M). We hope the information you’ve read has helped to reinforce the importance of cooperation and consolidation in achieving local cost efficiencies, especially during these times of fiscal uncertainty. The Office of the State Comptroller (OSC) can provide specific training and web-based data to assist local officials in exploring opportunities for their communities. As always, our trusted RBT team members are standing by ready to assist you with any personalized questions, or to set up a consultation.

Sources: OSC, NY.gov

In the days and weeks following the sudden Surfside condo collapse, the nation watched in horror as the unimaginable loss of life unfolded.

According to a 2021 Statista Research Department data report, approximately 24 percent of New Yorkers live in apartment complexes. For many residents around the state, it raised safety concerns and questions about infrastructure closer to home. How safe are the apartment buildings and condominiums that house New Yorkers?

As a “municipal home rule” state when it comes to zoning regulations, local New York municipal governments adopt and enforce their own zoning ordinances rather than countywide zoning.

You might be familiar with the NYC Facade Inspection Safety Program (formerly known as Local Law 11), which requires NYC buildings taller than six stories to have their facades inspected and repaired every five years. But depending on what part of New York you call home, the rules will likely be very different. Every local government of the 42 municipalities within Orange County, for example, has its own zoning codes and zoning maps. Your local county Department of Planning likely strives to maintain current versions of zoning maps for all of the municipalities within your respective county. Taking the time to stay current with this information helps to inform planning policies, understand areas where future growth may likely occur, and assess the suitability and compliance of various land use proposals. But still, it’s important to ask: how often are your local leaders following up, or making necessary changes to zoning codes?

The next step would be evaluating the construction of buildings. For example, following the Surfside tragedy, The New York Times reported that “Three years before the deadly collapse… a consultant found alarming evidence of ‘major structural damage’ to the concrete slab below the pool deck…”

At the time the consultant noted, “Though some of this damage is minor, most of the concrete deterioration needs to be repaired in a timely fashion.” Although the engineer’s report helped shape plans for a multimillion-dollar repair project more than two and a half years after the building managers were warned, the collapse preceded any action. For many, the message rings loud and clear: some fixes can’t be delayed and that may mean local protocols need to be updated.

In the wake of this disastrous event, three New York state senators are pushing for stiffer building inspection requirements to prevent a repeat tragedy.

Legislators from Nassau County, Brooklyn, and Staten Island proposed a law requiring building owners to pay for periodic inspections of their properties, according to the news outlet The Patch. “How much do we know about the structural integrity of our buildings here?” asked Sen. Todd Kaminsky at a news conference announcing the plan. Little else is known about the proposed law or when the group of senators, which also includes Diane Savino and Roxanne Persaud, plan to introduce it. The group wrote a letter to New York’s Code Council, a body of 17 gubernatorial appointees empowered to update the fire and energy conservation codes and to adopt more restrictive local standards upon the recommendation of local governments.

The New York Department of State, which oversees the Division of Building Standards and Codes, said it has been reviewing building codes since the Florida collapse.

“We are reviewing the senator’s letter and will also carefully review the final investigative report regarding the building collapse in Miami to examine whether any changes may be warranted in New York State to prevent a similar tragedy from happening here, and to help keep New Yorkers safe,” state officials said in a statement. State officials said local governments are responsible for enforcing state codes, including building permits, construction inspections, fire safety, and property maintenance inspections.

Even if your hometown does not have oceanfront erosion to contemplate, every neighborhood faces its own set of unique environmental factors and challenges.

The Surfside condo collapse acts as a somber reminder for local government to take very seriously its responsibility to residents. Proactively maintaining the structural integrity of the buildings that make up your community today could save a life, tomorrow.

Sources: Forbes, The Real Deal, Statista

Ninety-nine percent of counties, cities, towns, villages, and fire districts in New York State use OSC’s electronic filing software for preparing and filing their Annual Update Document (AUD).

However, recently OSC updated the AUD filing software, moving from version 5.95 to 5.96, to assist with the implementation of GASB 84. Now that it has, it’s time to ensure your implementation is complete. As you may be aware, the Government Accounting Standards Board (GASB) has been issuing new standards over the last few years in a bid to improve the financial reporting of U.S. and local governments. The GASB’s goal is to provide better information to financial statement users. OSC has determined that Statement 84 should be implemented for AUD filling purposes. As a refresher, GASB 84 outlines the specific criteria needed to determine which activities are fiduciary. Local governments and school districts must assess which activities are fiduciary under the new standards because there are significant changes in the way items can be reported in the future.

There are three types of fiduciary activities defined in Statement 84:

• Fiduciary component units, which include certain pension and other post-employment benefit (OPEB) arrangements and other component units that are fiduciary
• Pension and OPEB arrangements that are not component units
• Other fiduciary activities

Previously, agency fund activities only required balance sheet entries.

Now, however, activities that are reported in the governmental funds will need to also be included in the results of operation (revenues and expenditures). For example, when recording payroll expenditures in a governmental fund, local governments, and school districts will need to record a liability for withholdings and keep the related cash in the governmental fund until those amounts are cleared. While these concepts are not new from an accounting perspective, local governments and school districts need to be mindful of the differences between how assets were previously recorded in an agency fund and how they will now be recorded in a governmental fund. Should activities currently classified as fiduciary still be considered fiduciary in nature or should these activities now be reported in a governmental fund, as a business-type activity, or not even reported at all? Additionally, consider if any current unrecorded activities would now meet the fiduciary activities definition and need to be reported.

RBT CPA’s wants you to be prepared for crucial financial news that impacts you and your municipality.

We understand keeping up with these complex changes can sometimes be overwhelming. Our goal is to alleviate your stress by breaking down these important changes and making sure you can implement best practices for the most common situations you’re bound to run into. It’s important to start identifying your organization’s fiduciary funds as soon as possible, if you haven’t already done so. While complying with GASB 84 may be complicated initially, don’t worry—we’re here to help. We want to assist you in analyzing various activities and change the way you think about fiduciary activities so you’re never unprepared. You can click here to view our GASB 84 webinar with your team or contact our professional team to schedule an appointment and connect. Additionally, if your local government or school district would like to share examples of how you have implemented these changes successfully, please email me at lhannigan@rbtcpas.com – we would love to hear your insight.