Budget woes were on the agenda at Wednesday's Board of Selectman meeting. Lynn Nenni, Interim Finance Director, appeared before the board to talk about a troublesome deficit in the utility budget that has been a problem since 2018. Most recently, the utility budget ran about $2,261,000 over, and the town has borrowed from the General Fund to make up the balance. Current town policy says the General Fund should hold about 10-14% of the budget (which would be $4.4 million on the low-end for 2023) in unassigned balance. But Nenni's preliminary estimates for 2023 put that balance at just $2.8 million.
"I don't see how you're going to build up your fund balance," said Nenni. The unassigned balance in the General Fund is meant to be a contingency fund for unexpected expenses, and without a plan in place to replenish it, the town's auditors have recommended the balance of the American Rescue Plan Act (ARPA) funds be moved to the general fund to help build it back up.
In 2021, President Joe Biden signed the $1.9 trillion American Rescue Plan Act (ARPA), which included $350 billion in emergency funding for state, local, territorial and tribal governments. Stafford received $3,519,740.29 in ARPA funding, which has been used for projects like the Haymarket Common/Main Street improvements, AED installations, upgrades, and training — including at Town Hall, the library, Olympic field, and more — and Loki, the police rescue and search dog.
Nenni asked the Selectmen to approve moving as much of the remaining ARPA money as possible to the General Fund to help make up for the shortfalls and start building the contingency back up. While they voted to recommend that $500,000 be moved to the general fund, the matter still had to go to the ARPA Commission, which was set to meet Thursday morning.
Amber Wakley-Whaley, Director of Grants and Community Development and member of the ARPA committee, said in Thursday morning's meeting that Stafford has about $865,764 left in unallocated ARPA funds but that she was unsure if this was a permissible use of the remaining funds. That feeling was echoed by several members of the commission. For instance, Rick Harstenstein, Chair of the commission and a Selectman, said, "There's no guarantee this helps us."
David Bachiochi said, "This just doesn't feel like ARPA to me."
Wakley-Whaley asked the obvious question, "What would we do if ARPA didn't exist?" To which Nenni replied, "What would anyone do?"
Steve Geryk, who is on the Board of Finance as well as the ARPA Commission, was concerned that if the town doesn't find a way to shore up the General Fund, it will have a hard time borrowing money in the future. Acknowledging that the commission had other projects and services it wanted to fund with ARPA dollars, he said, "If we don't solve this problem, those services will fall by the wayside."
But the bigger question at hand is, is this even possible? ARPA funds come with a lot of rules and regulations. Recipients are bound by those. Each expenditure has to be tied to a permitted use, and though Wakley-Whaley was skeptical that this fit into any of those parameters, First Selectman Sal Titus said the town's auditors see other towns using the money in a similar fashion. Additionally, there is a "$10 million dollar exemption," which allows small towns with smaller workforces to claim up to $10 million in revenue losses from COVID-19-related reasons without having to account precisely for every one of those losses.
"I don't want to find out we're on the news three years from now for robbing Peter to pay Paul," said Cathy Cannon, commission member. So, after much discussion, the commission decided it could not rule without further details about whether using the funds is even permissible and, if so, what specific expenditures it would need to be tied to. They plan to reconvene in a couple of weeks after Nenni, Wakley-Whaley, and the auditors have had more time to examine possible permitted uses for the money that could help solve the problem.