Revenue Replacement Eyed for First Batch of Leesburg’s ARPA Money

While some localities are looking to speed up infrastructure projects or invest in better broadband, the Town of Leesburg will use its first batch of funding from the federal American Rescue Plan Act to make up for lost revenue in 2020.

The Town Council unanimously voted Tuesday to make a supplemental appropriation to the General Fund in the amount of $2.96 million. That amount represents the first 50% of ARPA money the town will receive, with the following 50% expected to be doled out in 12 months. 

The ARPA funding comes with restrictions on how it can be used. Allowed uses include supporting a locality’s COVID-19 response; supporting economic stabilization for households and businesses; replacing lost public sector revenue; providing premium pay for essential workers; and building, maintaining or upgrading water, sewer and broadband infrastructure.

Management & Budget Officer Jason Cournoyer said town staff has calculated a $6.4 million revenue loss in calendar year 2020 for the town government. Utilizing the ARPA funding to close the gap on the revenue loss by almost 50% would provide the Town Council the most flexibility going forward, he said in addressing the council Tuesday.

“ARPA funding will be used to fund governmental services in [fiscal year] 2022 resulting in a decreased reliance on local tax funding.  As such, any resulting increase to fund balance or excess revenue in FY 2022 will derive from local tax funding and can be used by the Town Council at their discretion without consideration of the ARPA restrictions,” he said in a follow-up interview.

While there was a required public hearing for the budget appropriation, there were no speakers at the July 13 meeting.

Town leaders in prior months had expected significantly more funding to be at their fingertips. An initial projection by the House Committee on Oversight and Reform shortly after the U.S House of Representatives passed the bill in March showed Leesburg receiving just under $50 million. That figure dropped dramatically, however, when the final U.S. Treasury distribution list was published in early May. This was due to Leesburg’s classification changing to an entitlement community, as opposed to a non-entitlement unit, due to its population surpassing 50,000. Based on a 2019 Census estimate, Leesburg’s population hovers around 53,797.

Mayor Kelly Burk penned a letter to Gov. Ralph Northam asking he and the Virginia legislature to intervene on the town’s behalf. Unlike other entitlement communities, she wrote, Leesburg is not a direct recipient of Community Development Block Grant funds from the Department of Housing and Urban Development. 

The largest town in the commonwealth, Leesburg did not fare as well financially as some of its close, and smaller, neighbors— Herndon (population 24,601, $25.5 million allocation); Purcellville (10,178, $10.6 million); Vienna (16,485, $17.1 million); and Berryville (4,371, $4.5 million).

On a per capita basis, Leesburg is only receiving $110 per resident. Had Leesburg been classified as a non-entitlement unit like some of its neighbors, the town would have received $51.2 million, or $954 per capita.

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