BACKGROUND: Revenue Replacement Funds Returned
City Council adopted the Fiscal Year 2023 Budget and Appropriation Ordinance on December 5, 2022 for the purpose of defraying the expenses of certain departments and funds of the City of Decatur for the fiscal year beginning January 1, 2023 and ending December 31, 2023.
On June 20, 2023 for Fiscal Year 2023, the City Council approved an ordinance to amend the 2023 budget for the fiscal year that ended December 31, 2023.
On December 18, 2023 for Fiscal Year 2023, the City Council approved an ordinance to amend the 2023 budget to reconcile the budget and appropriate additional funds for operational expenditures for the City to effect provision of services to its citizens which were not anticipated at the time of adoption. Passage of a budget reconciliation ordinance every December is a regular part of closing out and properly ending a fiscal year.
On February 5, 2024 for Fiscal Year 2023, the City Council approved an ordinance to amend the 2023 budget and close-out and finalize the reconciliation of the fiscal year that ended December 31, 2023.
To fully close out FY2023 and final ARPA accounting, the City Council will need to amend the 2023 Budget Reconciliation Ordinance again to allocate the revenue replacement funds back to the original purposes designated by the City Council. These funds are unrestricted in purpose and reside in the general fund. The ARPA grant purposes have been fulfilled for revenue replacement and now are to be spent as originally designated by Council. These are not new funds, but simply using the unrestricted funds as originally intended after the grant restrictions were fulfilled for public safety in fire and police salaries per Ordinance 2023-62. Some of the expenses have already been spent in the general fund and other expenses have been spent in other funds. Most of the $8.5 million in transfer was spent in FY2023.
Remaining unrestricted funds allocated
Of the $2,228,391 transferred back to the ARPA grant fund (Fund 99), FY2023 public safety spending from ARPA funds was $599,544 after audit adjustments. This leaves $1,628,847.71 remaining to be allocated. Since the ARPS grant funds have been spent and filed with the Federal grant agency, the ARPA fund must be closed out and all the funds must be distributed with the FY2023 audit.
Of the $1,628,847.71 remaining balance in the ARPA fund, $600,000 has already been allocated by City Council for the second floor Library construction (Ordinance 2023-36); and discussion during the City council meeting of June 20, 2023 stated that these funds would be allocated from ARPA funds.
Funding for Fire Station 7 was discussed with City Council during the June 20, 2023 meeting that the Administration would be asking for the remaining payment of up to $482,509 be funded from the ARPA funds. The total owed for fire station 7 is $341,180.39.
This leaves $687,667.32 remaining in the ARPA fund. The Administration recommends $687,667.32 be moved to Economic Development (Fund 84) for demolitions and rehab projects, as demolitions continues to be an important part of the City Council’s strategic plan. The amount of transfer to Fund 84 may be different depending upon any additional FY2023 audit entries or adjustments.
ARPA Fund 99 closed
Furthermore, since the ARPA grant funds have been fully expended based on Treasury rules, the auditors require that ARPA Fund 99 be closed out and no longer used. All ARPA grant funds were spent by December 31, 2023. The grant was held open in 2024 in case the auditors required any funds be moved between categories during the audit. The grant will be closed out after the 2023 audit is completed.