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Home My WebLink About08-08-2022 ARP Revenue Replacement AppropriationCITY OF SOUTH BEND, IN American Rescue Plan Revenue Replacement August 8, 2022 CITY OF SOUTH BEND, IN Allowable Uses of ARP Funds CITY OF SOUTH BEND, IN Revenue Replacement •Part of the City’s plan to effectively utilize the American Rescue Plan funding is to increase flexibility on use of funds by utilizing revenue replacement. •Revenue replacement funds appropriated by this bill will be used to pay for expenditures that are normally paid for from the General Fund. •This frees up funds in the General Fund to be used for spending on priorities identified as the “ARP-related budget” during the 2022 budget process. •Revenue replacement does not change that planned spending nor does it remove Council’s role in appropriating ARP funds. Council is required to appropriate funds in both the General Fund and the ARP Fund. CITY OF SOUTH BEND, IN ARP-Related Budget 2021 Budget 2022 Budget Total Budget Strong Neighborhoods 1,000,000 17,170,000 18,170,000 Home Repair Assistance Programs 2,500,000 2,500,000 Housing Financing 2,500,000 2,500,000 Home Buying Assistance 1,000,000 1,000,000 Additional Neighborhood Infrastructure 2,500,000 2,500,000 City-wide Comprehensive Plan 500,000 500,000 Plan Implementation 300,000 300,000 Land Bank Startup Costs 250,000 250,000 Demolitions (Vacant & Abandoned / Commercial)500,000 3,670,000 4,170,000 Neighborhood Development Assistance 150,000 150,000 Vacant Building Development Financing 500,000 1,500,000 2,000,000 Neighborhood Recovery Grants 200,000 200,000 Neighborhood Main Streets (Bike Racks, Trash Cans, etc.)500,000 500,000 Athletic Court Repair 1,600,000 1,600,000 Safe Community for Everyone 1,700,000 11,710,000 13,410,000 Homelessness Strategy Implementation 200,000 200,000 County Partnerships on Homelessness & Mental Health 5,800,000 5,800,000 Gun Violence Intervention 500,000 500,000 Public Safety Technology Upgrades 1,500,000 1,500,000 COVID Response 1,500,000 1,500,000 COVID Facilities Upgrades 200,000 1,800,000 2,000,000 ARP Premium Pay 1,910,000 1,910,000 Robust, Sustainable Infrastructure 1,625,000 1,625,000 Green Infrastructure -Greener Homes 100,000 100,000 Green Infrastructure -Solarize, Switch & Save 300,000 300,000 Green Infrastructure -Commercial Recycling Partnership for CBD’s 75,000 75,000 Green Infrastructure -EV Plan & Deployment 150,000 150,000 Green Infrastructure -Distributed Solar/Storage 1,000,000 1,000,000 Equitable Access to Opportunity 3,600,000 5,350,000 8,950,000 Small Business Assistance 1,750,000 1,750,000 Utility Relief 3,500,000 2,000,000 5,500,000 Streamlined Assistance 100,000 500,000 600,000 Opportunity Fund 1,000,000 1,000,000 Immigration Support 100,000 100,000 Youth and Workforce Development 3,500,000 12,350,000 15,850,000 Workforce Development 250,000 250,000 Dream Center 1,000,000 10,100,000 11,100,000 Pre-K Centers 2,500,000 2,000,000 4,500,000 Grand Total 9,800,000 46,295,000 58,005,000 Total Award: $58,910,047 Total Budgeted (unrelated to this bill): $58,005,000 CITY OF SOUTH BEND, IN ARP-Related Budget Total Budget Spent / Encumbered Committed Capital Projects Total Spent / Committed Strong Neighborhoods 18,170,000 2,445,702 3,855,719 6,301,421 Home Repair Assistance Programs 2,500,000 --- Housing Financing 2,500,000 --- Home Buying Assistance 1,000,000 --- Additional Neighborhood Infrastructure 2,500,000 691,059 -691,059 City-wide Comprehensive Plan 500,000 209,537 -209,537 Plan Implementation 300,000 --- Land Bank Startup Costs 250,000 --- Demolitions (Vacant & Abandoned / Commercial)4,170,000 800,825 3,000,000 3,800,825 Neighborhood Development Assistance 150,000 --- Vacant Building Development Financing 2,000,000 --- Neighborhood Recovery Grants 200,000 --- Neighborhood Main Streets (Bike Racks, Trash Cans, etc.)500,000 --- Athletic Court Repair 1,600,000 744,281 855,719 1,600,000 Safe Community for Everyone 13,410,000 4.366.611 5,800,000 10,166,611 Homelessness Strategy Implementation 200,000 --- County Partnerships on Homelessness & Mental Health 5,800,000 -5,800,000 5,800,000 Gun Violence Intervention 500,000 --- Public Safety Technology Upgrades 1,500,000 2,223 -2,223 COVID Response 1,500,000 1,448,093 -1,448,093 COVID Facilities Upgrades 2,000,000 1,026,635 -1,026,635 ARP Premium Pay 1,910,000 1,889,660 -1,889,660 Robust, Sustainable Infrastructure 1,625,000 461,453 -461,453 Green Infrastructure -Greener Homes 100,000 --- Green Infrastructure -Solarize, Switch & Save 300,000 297,000 -297,000 Green Infrastructure -Commercial Recycling Partnership for CBD’s 75,000 --- Green Infrastructure -EV Plan & Deployment 150,000 14,453 -14,453 Green Infrastructure -Distributed Solar/Storage 1,000,000 150,000 -150,000 Equitable Access to Opportunity 8,950,000 4,904,460 -4,904,460 Small Business Assistance 1,750,000 --- Utility Relief 5,500,000 4,631,794 -4,631,794 Streamlined Assistance 600,000 221,317 -221,317 Opportunity Fund 1,000,000 --- Immigration Support 100,000 51,348 -51,348 Youth and Workforce Development 15,850,000 1,664,162 14,154,038 15,818,200 Workforce Development 250,000 218,200 -218,200 Dream Center 11,100,000 1,383,970 9,716,030 11,100,000 Pre-K Centers 4,500,000 61,992 4,438,008 4,500,000 Grand Total 58,005,000 13,842,388 23,809,757 37,652,145 Total Award: $58,910,047 Total Budgeted (unrelated to this bill): $58,005,000 Total Spent or Committed (as of 8/4/2022): $37,652,145 (~64% of total award) CITY OF SOUTH BEND, IN Federal Government ARP Fund City Funds General Fund Spending on Strategic Initiatives Revenue Replacement (Bill 37-22) ARP-Related Budget (Unaffected by Bill 37-22) Frees up $46,080,405 in the General Fund $13,010,000 $44,995,000 Total Current Budget = $58,005,000 $58,910,047 CITY OF SOUTH BEND, IN Calculation of Amount of Revenue Replacement •Total Revenue Loss (Four Step Process) CITY OF SOUTH BEND, IN Base Year Revenue Category Name 2019 ACTUAL Property Taxes 82,604,579 Charges for Services 61,314,069 Local Income Taxes 34,643,723 Intergov./ Shared Revenues 16,173,802 Interest Earnings 7,211,297 Donations 5,116,150 Other Income 4,346,239 Intergov./ Grants 3,776,748 Licenses & Permits 1,994,397 Fines, Forfeitures, and Fees 1,084,943 Interfund Transfers In - PILOT - Interfund Allocation Reimb - Debt Proceeds - Entity-Wide Total:218,265,946 Note that inter-organization payments, debt service, and several other types of revenue are excluded from this calculation CITY OF SOUTH BEND, IN Calculation of Amount of Revenue Replacement •Total Revenue Loss (Four Step Process) CITY OF SOUTH BEND, IN Counterfactual 2020 Revenue General Revenue Calculation Base Year Base Year + 5.20% Category Name 2019 ACTUAL Counterfactual Revenue -2020 Property Taxes 82,604,579 86,900,017 Charges for Services 61,314,069 64,502,401 Local Income Taxes 34,643,723 36,445,197 Intergov./ Shared Revenues 16,173,802 17,014,840 Interest Earnings 7,211,297 7,586,284 Donations 5,116,150 5,382,189 Other Income 4,346,239 4,572,244 Intergov./ Grants 3,776,748 3,973,139 Licenses & Permits 1,994,397 2,098,106 Fines, Forfeitures, and Fees 1,084,943 1,141,360 Interfund Transfers In -- PILOT -- Interfund Allocation Reimb -- Debt Proceeds -- Entity-Wide Total:218,265,946 229,615,775 CITY OF SOUTH BEND, IN Calculation of Amount of Revenue Replacement •Total Revenue Loss (Four Step Process) CITY OF SOUTH BEND, IN Actual 2020 Revenue General Revenue Calculation Base Year Base Year + 5.20%Calculation Point #1 Category Name 2019 ACTUAL Counterfactual Revenue -2020 2020 ACTUAL Property Taxes 82,604,579 86,900,017 80,188,143 Charges for Services 61,314,069 64,502,401 56,507,268 Local Income Taxes 34,643,723 36,445,197 36,897,937 Intergov./ Shared Revenues 16,173,802 17,014,840 14,783,166 Interest Earnings 7,211,297 7,586,284 2,497,422 Donations 5,116,150 5,382,189 4,629,063 Other Income 4,346,239 4,572,244 3,825,383 Intergov./ Grants 3,776,748 3,973,139 1,493,683 Licenses & Permits 1,994,397 2,098,106 1,619,205 Fines, Forfeitures, and Fees 1,084,943 1,141,360 1,073,088 Interfund Transfers In --- PILOT --- Interfund Allocation Reimb --- Debt Proceeds --- Entity-Wide Total:218,265,946 229,615,775 203,514,357 Reduction in Revenue 26,101,418 CITY OF SOUTH BEND, IN Calculation of Amount of Revenue Replacement •Total Revenue Loss (Four Step Process) CITY OF SOUTH BEND, IN Actual 2020 Revenue General Revenue Calculation Base Year Base Year + 5.20%Calculation Point #1 Category Name 2019 ACTUAL Counterfactual Revenue -2020 2020 ACTUAL Property Taxes 82,604,579 86,900,017 80,188,143 Charges for Services 61,314,069 64,502,401 56,507,268 Local Income Taxes 34,643,723 36,445,197 36,897,937 Intergov./ Shared Revenues 16,173,802 17,014,840 14,783,166 Interest Earnings 7,211,297 7,586,284 2,497,422 Donations 5,116,150 5,382,189 4,629,063 Other Income 4,346,239 4,572,244 3,825,383 Intergov./ Grants 3,776,748 3,973,139 1,493,683 Licenses & Permits 1,994,397 2,098,106 1,619,205 Fines, Forfeitures, and Fees 1,084,943 1,141,360 1,073,088 Interfund Transfers In --- PILOT --- Interfund Allocation Reimb --- Debt Proceeds --- Entity-Wide Total:218,265,946 229,615,775 203,514,357 Reduction in Revenue 26,101,418 •A few notes: •Under the final rule, “any diminution in actual revenue calculated using the formula above would be presumed to have been ‘due to’ the COVID-19 public health emergency”. The City has no need to prove that the revenue loss is directly related to the pandemic. •The term “adjusted for tax changes” above refers only to tax cuts or tax increases that are adopted after the adoption of the final rule (January 6, 2022). This does not apply to the City. CITY OF SOUTH BEND, IN Repeat four steps for 2021: General Revenue Calculation Base Year Base Year + 5.20%Calculation Point #1 Base Year + 5.20%2 Calculation Point #2 Category Name 2019 ACTUAL Counterfactual Revenue -2020 2020 ACTUAL Counterfactual Revenue -2021 2021 ACTUAL Property Taxes 82,604,579 86,900,017 80,188,143 91,418,818 87,866,397 Charges for Services 61,314,069 64,502,401 56,507,268 67,856,526 59,584,410 Local Income Taxes 34,643,723 36,445,197 36,897,937 38,340,347 35,736,715 Intergov./ Shared Revenues 16,173,802 17,014,840 14,783,166 17,899,611 15,868,667 Interest Earnings 7,211,297 7,586,284 2,497,422 7,980,771 1,958,341 Donations 5,116,150 5,382,189 4,629,063 5,662,063 4,581,762 Other Income 4,346,239 4,572,244 3,825,383 4,810,000 3,709,611 Intergov./ Grants 3,776,748 3,973,139 1,493,683 4,179,742 436,298 Licenses & Permits 1,994,397 2,098,106 1,619,205 2,207,207 1,821,899 Fines, Forfeitures, and Fees 1,084,943 1,141,360 1,073,088 1,200,710 662,297 Interfund Transfers In ----- PILOT ----- Interfund Allocation Reimb ----- Debt Proceeds ----- Entity-Wide Total:218,265,946 229,615,775 203,514,357 241,555,795 212,226,397 Reduction in Revenue 26,101,418 29,329,398 Total Reduction in Revenue 55,430,816 Therefore, the total possible amount of revenue replacement would be $55,430,816 (based on the first two calculation points). CITY OF SOUTH BEND, IN Why $46.08 million? •This appropriation is based on the total award (plus interest earnings earned to date), minus programs intended to be spent from the ARP Fund #263. That will give us the amount planned to be spent from the General Fund. ARP Award: $58,910,047 Fund 263 Interest Earnings:160,018 Spending directly from Fund #263 Dream Center (Budget)(11,100,000) ARP Premium Pay (Actual)(1,889,660) 46,080,405 CITY OF SOUTH BEND, IN Summary •To effectively utilize the American Rescue Plan funding, part of the City’s plan is to increase flexibility on use of funds by utilizing revenue replacement. •Revenue replacement funds appropriated by this bill will be used to pay for expenditures that are normally paid for from the General Fund. •This frees up funds in the General Fund to be used for spending on priorities identified as the “ARP-related budget” during the 2022 budget process. •This bill does not change the planned spending on ARP dollars, nor does it remove Council’s authority over appropriation of all City spending.