CITY BUDGET GETS A BOOST!
Many of you have heard the news and have responded with valid comments and questions. Yes! The City will receive $1.35b in Federal funding through the American Recovery Plan (ARP). Everyone agrees – this is GOOD news!! However, it doesn’t repair the damage this pandemic has and continues to create. In reality, this money will only allow the City to start the healing process. This week, the CAO presented the 3rd Financial Status Report (FSR) to the Budget & Finance Committee, which included the use of the ARP money to close the budget gap. To summarize:
- The $1.35b is paid directly to the City in two payments; half ($677m) toward the end of this Fiscal Year (June 2021), and the other half, twelve months later (June 2022).
- The revenue loss for FY20/21 remains as projected at $600m.
- The same amount of revenue loss is being projected for next Fiscal Year.
- The City is seeking clarification from the Biden Administration on how flexible or restricted the use of the ARP funds will be.
- The City hopes for as much flexibility as possible so they can use the first payment to replace the FY20/21 revenue loss, stop the use of MICLA commercial paper money (IOUs) for working capital, and restore the City’s Reserve Fund to healthy levels.
- If any funds remain, CAO warns that they should only be used for one-time expenditures and not to restore or initiate ongoing programs.
- The second payment will likely be used in the same manner, especially if the revenue loss is as projected.
The Mayor’s proposed budget for FY 21/22 will be released on 04/20/2021. The Budget & Finance Committee will meet on 04/26/2021 to start their budget process. Lastly, on another slightly positive note, the hard hiring freeze (what the City is calling the “hiring moratorium” has been lifted. This means the Managed Hiring Committee will reconvene and with their approval, critical positions can be filled. It is the Department’s responsibility to initiate the request to fill these positions.
Thank you for all your hard work, patience and solidarity throughout these difficult and trying times. Be sure to save the date and register here for our "Finding Joy During a Difficult Time" Event.
