Agenda - Council Work Session - 07/13/2021

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AS OF JUNE 24, 2021 Upon receiving Fiscal Recovery Fund payments, recipients may immediately calculate revenue loss for the period ending December 31, 2020. 3.5. What is the formula for calculating the reduction in revenue? A reduction in a recipient's General Revenue equals: Max {[Base Year Revenue* (1+Growth Adjustment)l12)] - Actual General Revenuet ; 0} Where: Base Year Revenue is General Revenue collected in the most recent full fiscal year prior to the COVD-19 public health emergency. Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient's average annual revenue growth over the three full fiscal years prior to the COVID-19 public health emergency. n equals the number of months elapsed from the end of the base year to the calculation date. Actual General Revenue is a recipient's actual general revenue collected during 12-month period ending on each calculation date. Subscript t denotes the calculation date. 3.6. Are recipients expected to demonstrate that reduction in revenue is due to the COVID-19 public health emergency? In the Interim 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. This presumption is made for administrative ease and in recognition of the broad -based economic damage that the pandemic has wrought. 3.7. May recipients use pre -pandemic projections as a basis to estimate the reduction in revenue? No. Treasury is disallowing the use of projections to ensure consistency and comparability across recipients and to streamline verification. However, in estimating the revenue shortfall using the formula above, recipients may incorporate their average annual revenue growth rate in the three full fiscal years prior to the public health emergency. 3.8. Once a recipient has identified a. reduction in revenue, are there any restrictions on how recipients use funds up to the amount of the reduction? 14