Charlottesville is using leftover money from the first federal coronavirus relief stimulus package to give wiggle room in covering city expenses.
The City Council approved using close to $1 million to reimburse public safety payroll costs during its meeting Monday.
The city received about $8.25 million in two rounds of stimulus funding. Any money unused by Dec. 31 must be returned to the federal government.
City staff said $921,523 remained unspent, including $7,000 in interest.
The biggest chunk of unallocated money, $429,302, will go toward employee support. Other unallocated money is $258,275 for operational modifications, $126,972 for technology, $96,420 in a contingency reserve and $3,554 in business support.
City staff recommended that the money be used to partially reimburse the city for a portion of previous public safety payroll costs for coronavirus mitigation efforts of the Police Department, Fire Department and Sheriff’s Office since July 1.
A staff report indicates the city has spent $11.5 million in payroll expenses for those departments in that timeframe. The funds would cover about 8% of the expenses.
Essentially, the public safety money already has been spent. Therefore, reimbursing the expenses will free up $921,523 in the budget to cover revenue shortfalls.
The money will help an increasingly bleak revenue picture as the pandemic continues to impact the economy.
In approving its budget for the current fiscal year, which started July 1, the city was able to use guaranteed money from its revenue-sharing agreement with Albemarle County to support its operating budget.
The revenue-sharing agreement was approved by referendum in 1982 in a deal to prevent the city from annexing valuable county land, requiring the county to share some of the tax revenue generated by that land with Charlottesville. Through a complex funding formula, the county is projected to provide $14.5 million to the city in fiscal 2021.
The initial budget proposal called for $6.8 million of the money to go toward the city’s operating budget, roughly in line with fiscal 2020, with the rest typically going toward capital projects. However, the final budget increased that amount to $13.3 million.
In financial discussions at the beginning of the meeting, city staff indicated about three-quarters of the $6.5 million will likely be used by the end of the fiscal year.
“We’re in a situation where the ability of the city to cover expenses is an unknown question,” Councilor Michael Payne said. “We’ve been trying to do a lot looking at a lot of need, but the brutal reality is if we don’t get any relief from the federal government, then we’re not going to be able to meet it all.”
Congress passed another major relief bill this week, but the amount of support it might provide local governments is not clear.