Agenda - Council Work Session - 03/08/2022

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U.S. DEPARTMENT OF THE TREASURY Replacing Lost Public Sector Revenue The Cononavirus State and Local Fiscal Recovery Funds provide needed fiscal relief for recipients that have experienced revenue loss due to the onset of the COV|D'19 public health emergency. Specifically, SLFRF funding may be used to pay for""government services" in an amount equal to the revenue loss experienced by the recipient due Lo the[DV0'19 public health emergency. Government services generally include any service traditionally provided by a government, including construction of roads and other infrastructure, provision of public safety and other services, and health and educational services. Funds spent under government services are subject to streamlined reporting and compliance requirements. In order to use funds under government services, recipients should first determine revenue loss.They may,then, spend upto that amount on general government services. DETERMINING REVENUE LOSS Recipients have two options for how to determine their amount of revenue loss. Recipients must choose one of the two options and cannot switch between these approaches after an election is made. 1. Recipients may elect a "standard allowance"of$1O million to spend mn government services through the period ofperformance. Under this option,which is newly offered in the final rule Treasury presumes that up to$10 million in revenue has been lost due to the public health emergency and recipients are permitted to use that amount (not to exceed the award amount)to fund "government services." | | The standard allowance provides an estimate of revenue loss that is based on an extensive analysis of average revenue loss across states and localities, and offers a simple, convenient way to determine revenue loss, particularly for SLFRPs smallest recipients. All recipients may elect to use this standard allowance instead of calculating lost revenue using the formula below, including those with total allocations of$10 million or less. Electing the standard allowance does not increase or decrease a recipient's total allocation. 2. Recipients may calculate their actual revenue loss according to the formula articulated in the final ru|e. Under this option, recipients calculate revenue loss at four distinct points in time, either at the end of each calendar year(e.0, December 3l for years 2O2O, ZQZ1, 2O22, and 2O23) or the end of each fiscal year of the recipient. Under the flexibility provided in the final rule, recipients can choose whether to use calendar or fiscal year dates but must be consistent throughout the period of performance.Treasury has also provided several adjustments to the definition of general revenue in the final rule. To calculate revenue loss at each of these dates, recipients must follow a four-step process: Coronovirus State&Local Fiscal Recovery Funds:Overview of the Final Rule