Throughout the past several months, RBT dedicated our time to ensuring that non-entitlement units (NEUs) throughout the state were fully aware and prepared to receive Coronavirus Local Fiscal Recovery Funds provided by the Federal American Rescue Plan Act (ARPA) through weekly shows, you can review here. The July 9th application deadline quickly came and passed, and NEUs got to work requesting this unprecedented funding. Thankfully we were able to share the insight from various local leaders throughout Hudson Valley, to answer questions and spark creative eligible funding ideas. So with the historical addition of ARPA funding available to your community, how do you effectively assess your needs? If you haven’t already established a multi-year plan, now is the time to create your community wish-list, and gain valuable public viewpoints.
Whether ARPA funding will be used to address continuing pandemic-related crises and recovery efforts, to improve local infrastructure, or an array of other options is ultimately up to your team. Making informed decisions should not only focus on the needs of the moment but should also consider how today’s decisions will impact the future of the community. Specifically, governing boards need to understand how one-time revenues, like ARPA monies, can have long-term impacts on the future of local government and school district operations. These monies should be used to first fund non-recurring expenditures that meet the requirements outlined in the U.S. Department of Education (DOE) and U.S. Department of Treasury’s (Treasury) resources. While these monies are not prohibited from being used for recurring expenses, be mindful that if used in this manner, a gap will be created in the ensuing year’s budget, as this one-time revenue source will no longer be available. Remember, you have access to this federal money until 2024 to allocate and until 2026 to spend. To effectively manage local capital assets, you must develop a long-term plan to address how you monitor and maintain assets and determine how much you can spend within your budget. By developing a structured approach, you can help avoid unexpected expenses that pop up.
Developing a multi-year plan allows you to:
- Document procedures to help guide management in decision making
- Establish priorities and determine infrastructure needs
- Determine the cost-effectiveness of maintaining existing assets versus financing new assets
- Develop a structured approach for making decisions to fund capital assets
- Identify which assets need attention in any given year
- Inform the public and collect feedback on future capital projects/purchases
When developing a long-range plan, ask your team:
- Who will be responsible for overseeing the plan’s development and implementation?
- How will an asset inventory and requests for capital assets be developed for the plan?
- How many years should capital needs be projected?
- Will property (such as buildings, land, vehicles and equipment) need to be acquired, constructed or reconstructed?
- Who will be involved during the plan’s development (for example, board members, department heads, the general public, special interest groups)?
Your multi-year plan should detail when/how capital purchases will be made and paid for. Include:
- An inventory of assets your municipality owns
- Identification of the new capital assets needed
- The priority in which assets are to be acquired, replaced, or repaired
- Estimated costs of acquisition, replacement, or repair
- The method by which assets will be financed
Together with your governing board, you should review the plan annually as a part of your budget process.
Make necessary adjustments, and monitor plan results over time to track goal progress. The governing board needs to communicate regularly not only with each other but also with the comptroller, controller/treasurer, and various department heads. Communication is key to ensure that those charged with making decisions have all the necessary information they need to be able to fulfill their responsibilities. As there are further developments our Firm will continue to inform local government leaders. Please feel free to contact our dedicated RBT team to discuss your local needs.