By Debbie Adams
Vinton Town Council focused on finances at its meeting on June 15. Members adopted an ordinance approving the budget for FY2021-22 presented by Finance Director Anne Cantrell.
The budget has been under development and discussion for months with multiple briefings at council meetings, a work session, and a public hearing on June 1. The balanced FY22 budget for all funds totals $14,179,981. The new budget represents an increase of $2.5 million (21.57%) over the FY21 budget. That figure is misleading in that the FY21 budget was significantly reduced due to fears over the effect of the pandemic on the economy.
The highlight of the council meeting was a briefing by Assistant Town Manager Cody Sexton on the federal American Rescue Plan Act (ARPA) of 2021 which will bring almost $8.4 million to the town over two payments, one year apart. The town expects to receive the initial payment of $4.2 million this month, in fact “any day now.”
Town staff has been receiving guidance and input from the U. S. Department of the Treasury, the Government Finance Officers Association (GFOA), and other regional localities regarding distribution and spending of the funding.
Sexton presented a succinct, but comprehensive, “high level overview” of the ARPA funding and its projected impact on the town—based on what is known at this time. Council will be updated as more information becomes available.
“We are currently in the planning phase of identifying and prioritizing a list of projects that appear to meet the approved uses of the ARPA funding.” Sexton said. “(Town Manager) Pete Peters has indicated that he anticipates sharing these projects with Town Council for their consideration and direction in the near future, potentially being ready to move forward with several of them by early fall.”
Sexton noted that there seems to be more latitude, “a much larger window of opportunity,” on how the ARPA funds are spent than with the previous CARES funding, although there are a number of considerations and “a fair amount of restrictions.”
In his presentation, Sexton indicated that the ARPA funds “must be used to meet pandemic response needs and rebuild a stronger and more equitable economy.”
“The funds must be spent on direct services to citizens, employees, or infrastructure in the community,” Sexton said. “We can’t put it in a bank account and sit on it.”
Possible expenditures being considered by the town include investing in water, sewer, and broadband infrastructure; providing “premium pay” for essential workers (especially public safety and frontline workers such as Public Works); addressing negative economic impacts caused by the COVID-19 public health emergency; replacing lost public sector revenue; and supporting public health expenditures.
He noted that funding new water and sewer line development or upgrading existing systems, and additional broadband deployment and partnerships, are the “biggest ones for us” at this point. He said that while those projects won’t be highly visible and involve building new buildings, they will be “transformational investments for the town.”
Sexton explained that if a use of funds is allowable with the CARES funds, it will generally continue to be eligible under the new funding.
There are two ineligible uses of the ARPA funding: government services do not include paying interest or principal on outstanding debt and may not be used to replenish financial reserves, such as a rainy-day fund.
“You can’t put it in savings or pay debt or pension costs; the government expects the funds to be pushed out into projects,” Sexton said.
As for which projects to choose, “We could fund projects that are directly eligible for funding under ARPA in order to move budget capacity around on the back end to fund projects that are not eligible for funding under ARPA,” he said.
“For example, it is like when someone gives you a Kroger gift card for $100,” he explained. “Yes, I would rather have $100 cash to spend on my car payment, but since I was already going to spend money at Kroger regardless, I will use the gift card for the grocery budget and shift what I saved on groceries to spend on my car payment. This is the kind of brainstorming we are actively doing: creating what-if scenarios for moving money around the different funds to ensure that we are using ARPA appropriately for eligible projects and seeing what money is left over, on the back end, to pay for non-ARPA projects.”
One of the next steps in preparing for the ARPA funds will actually involve adopting a “wait and see” approach over the summer while the General Assembly and governor make decisions on how to spend state funds. The town would not want to use its own ARPA funds for projects that might be funded by the state. There is also a federal infrastructure bill in Congress currently being debated that might impact options.
“There are lots of balls in the air,” Sexton remarked. “Lots of rules are still being set. You don’t want to jump out too fast, but you also don’t want to wait until all the contractors have been taken up” for projects.
Meanwhile, the town will continue to receive updates from government agencies on the ARPA funds and “engage council and other stakeholders regarding potential projects eligible” for the funding, and “what may rise to the top of the list.”
In other business, Principal Planner Nathan McClung briefed council Vinton’s 2021 annual progress report on specific mitigation projects set forth in the 2019 Roanoke Valley-Allegheny Regional Hazard Mitigation Plan adopted by council.
Completed or in-the-works projects include providing informational brochures on emergency weather events, installation of generators at public infrastructure facilities, emergency shelters, and public buildings (already completed at Vinton War Memorial, and town well lots using CARES funding), maintaining the town’s CRS Class 8 flood insurance rating, maintaining an accurate database and map of repetitive loss properties, seeking funding for site-specific hydrologic and hydraulic studies of areas with repetitive flooding (already completed at Gish Mill and Glade Creek Greenway), construction/streambank restoration projects (as funding becomes available), and identifying locations for IFLOWS (Integrated Flood Observing and Warning System) monitoring and stream gauges. McClung informed council that one of these flood sensors will be installed this summer underneath the bridge over Glade Creek at Gish Mill.
Council authorized the town manager to execute an agreement between the Virginia Department of Housing and Community Development (DHCD) and the town for an Industrial Revitalization Fund (IRF) of $468,750 for the Gish Mill Redevelopment Project. IRF grants leverage local and private resources to achieve market-driven redevelopment of vacant and deteriorated industrial and commercial properties.
Council then adopted a second resolution granting a loan to Gish Mill Davii, LLC, for $468,750 from the IRF grant. The town, in partnership with the Roanoke County Economic Development Authority, will provide the funds to the developers in the form of a 30-year loan with a 2.5% interest rate and a 20-year deferment. The loan must be repaid to the Town of Vinton and will then be reused for other projects.
Peters stated that the loan is “a necessary piece of the puzzle to make the Gish Mill finances work; it’s not feasible without the loan.”
He thanked the DHCD for their generosity to the town over the past several years with a $750,000 downtown revitalization grant, a $35,000 housing planning grant, a $200,000 VIDA grant in partnership with The Advancement Foundation, in addition to the IRF grant—for a total of about $1.5 million.
Councilman Keith Liles pointed out that the town staff has worked extremely hard over the years to obtain these dollars from the DHCD.
Peters said that staff has applied for another grant from DHCD—a $60,000 planning grant which will focus on River Park Shopping Center to determine “its highest, best use.”