All On A Page: Warrant Committee Producing Brief Budget ‘Explainers’ For Town Meeting Members, Public

Photo: The new Belmont High School auditorium where Town Meeting is expected to take place.

With the budget season underway, the Warrant Committee – the financial watchdog for Town Meeting – has begun creating a series of one-page “explainers” on a variety of topics of interest to Town Meeting members and the public as the town prepares for the annual gathering of the town’s legislative body in June when the budget is taken up.

The first of the one-pagers explores the $7.8 million allocation to Belmont from the $1.9 trillion American Rescue Plan Act (ARPA) to be used over the next two fiscal years. In addition, a further $1 million is heading to the Belmont School District from the Elementary and Secondary School Emergency Relief Fund III.

The ARPA can be viewed here: https://www.belmont-ma.gov/sites/g/files/vyhlif6831/f/uploads/arpa_explainer_-_2_8_22.pdf

While how the ARPA funding is parceled out does not require a vote by Town Meeting, Town Administrator Patrice Garvin will present a draft plan for spending the majority of ARPA funds at a Monday, Feb. 14, 7 p.m. virtual meeting of the Select Board, which has already allocated some ARPA funds to the Board of Health for items such as COVID testing.

Direct all questions to Warrant Committee member Paul Rickter at rickter@gmail.com.

Change To ‘Final, Final’ Rules Frees Up Covid Funds For Unrestricted Town Use

Photo: The American Rescue Plan signed on March 11, 2021

It’s true: the squeaky wheel did get greased.

A last-minute reversal of state regulations which likely would have forced Belmont to hand back a substantial portion of millions of dollars in federal Covid-19 relief funding will now allow the town to spend the entire $7.6 million as it sees fit.

“As of Thursday afternoon … we were informed that the interim final rule changed yet again. I’m told this is the final, final interim final rule, which puts the town in a great position,” said Patrice Garvin, Belmont Town Administrator who with the town’s state and federal elected representatives.

After a quick word with the town auditor, “we were able to all of our money as revenue loss if we choose and we can use it as unrestricted as we’d like,” Garvin told the Select Board on Monday, Jan 10.

“We were concerned that we had to return [the 7.8 million],” said Adam Dash, select board chair. “This is phenomenal.”

While the grant does nothing to solve the massive structural deficit looming over Belmont, it will allow the town’s planners breathing room for at least the next two budget cycles as the funds will come in two $3.9 million segments with the second available next fall.

In mid-March 2021, Belmont received $8.8 million as part of the Biden Administration’s $1.9 trillion COVID relief plan – dubbed the American Rescue Plan Act – with $1 million going off to the schools. But as Belmont was preparing to incorporate the funds to replace revenue lost during the pandemic, it became apparent regulations imposed by the state would placed a stranglehold on the funds.

After a careful reading of the rules and regulations, the town’s auditor – Craig Peacock, a partner with Powers and Sullivan – determined that during the tight 18 month window the state is using to calculate lost revenue, the 2018 voter-approved debt exclusion used to finance the building of Belmont’s new Middle and High School, as well as the state’s partial reimbursement of expenses constructing the building was seen by Beacon Hill as a revenue “gain” for the town.

“As you remember, we had the town auditor come in and report out that … we could not find any revenue loss calculation” under the then final interim regulations, said Garvin on Monday.

While he could not give the town a financial balm, Peacock suggested a more political avenue of relief. “As they say, the squeaky wheel gets the grease so I don’t think it ever hurts to try to contact” state legislators, said Peacock at the time.

And that’s what Belmont did.

At the urging from the Select Board to air its consternation of the rules, Garvin sent a letter before Christmas “prompted by a lot of the town’s frustration with the final interim rule” to the town’s elected officials – State Sen. Will Brownsberger and State Rep. Dave Rogers – as well to [US Rep.] Katherine Clark, “letting her know that we are we’re in a really tough position with revenue lost calculation given the interim final rule,” said Garvin.

The result was a letter from the entire Massachusetts Congressional delegation to the US Secretary of the Treasury asking to provide relief to Belmont and a number of other small and mid-sized municipalities which found themselves in a similar predicament.

On Thursday, Jan. 6, came the good news from the state that the new change will allow any community to use up to $10 million in ARPA funds to recover revenue lost which has no bearing on each town’s final calculation.

“We will be able to take all of the money that we received from ARPA … and not have any restrictions for it,” said Garvin.

Belmont Secures $1.1 Million In State American Rescue Plan Funds For Something Extra

Photo: Monies to help plan for a new library is part of the recently received $1.1 million in state funds.

With thanks to state legislators and town officials, Belmont has received $1.1 million from the state of Massachusetts to fund some of the town’s “extra” expenses that would have been waiting until the next budget cycle.

The source of the funding is from the $5.3 billion the state was allocated from President Biden Administration’s American Rescue Plan Act, the $1.9 trillion funding package to promote recovery from the economic and health effects of the Covid-19 pandemic and the related recession. The $1.1 million is coming from a separate pot of funds than the $7.6 million in ARPA monies distributed as part of the bill’s Coronavirus Local Fiscal Recovery Fund.

“This is funding that the town of Belmont has been able to secure thanks to state Rep. Dave Rogers and state Sen. Will Brownsberger,” Town Administrator Patrice Garvin told the Select Board at its first meeting in December. “This is great news for the town.”

Select Board member Mark Paolillo also thanked Garvin as she started the conversation to find state funds to pay for aspects of the skating rink’s planning and design, leading to this larger allocation.

The funding will be spent on several projects in town outside of the budget:

  • $250,000, the new Belmont Public Library
  • $250,000, the new Belmont skating rink
  • $100,000, economic development
  • $500,000 public housing

The public housing portion includes:

  • $250,000, water and sewer infrastructure improvements at Belmont Village
  • $150,000, improvements at Waverley Oaks
  • $100,000, redevelopment of Sherman Gardens

Interim Regs Places A Wet Blanket On Belmont’s Use Of Fed Covid Rescue Funds

Photo: Belmont Middle and High School is now considered the source of revenue generating debt, according to the state.

When the details were released of the Biden Administration’s $1.9 trillion COVID relief plan – dubbed the American Rescue Plan Act – signed into law this past March that Belmont would be receiving upwards of $8 million for the town and schools, there was a segment of the population in the Town of Homes that cheered the news, not so much as a fiscal salve to a battered budget but as a political accoutrement.

“We definitely don’t need an override now!” came the clarion call on the No Override Now Facebook page of March 16, as the austerity-based group viewed the community-based bail out as a, albeit, short term solution to the worrying structural deficit facing the town.

The news became a game changer in the override battle, making it easier for many voters sitting on the fence on the proposed $6.4 million override to check the “no” box on the ballot less than a month later.

While town executives and elected officials cautioned at the time it was far too premature to assume the funds were heading into town coffers until there was more clarity of the rules, others were eager to champion – and begin spending – the windfall.

“This money can, in part, be used to offset revenue shortfalls and operating expenses,” proclaimed the No Override Now campaign in ads and opinion articles.

Well, it turns out, maybe not.

Under recently released interim final rules written by the state for allocating ARPA funds by cities and towns, Belmont is facing the prospect of have little to no leeway to use any of the $7.8 million to offset the substantial lost public revenue the town incurred since March 2020.

“What we found was a little troubling … because what we’re showing is no revenue loss based on the state guidelines,” said Town Administrator Patrice Garvin at the Monday, Dec. 6 meeting of the Select Board.

And the reason the state has pulled the ARPA rug from under the town’s feet is located at 221 Concord Ave.

After a careful reading of the rules and regulations, the town’s auditing firm determined that during the tight 18 month window the state is using to calculate lost revenue, the 2018 voter-approved debt exclusion used to finance the building of Belmont’s new Middle and High School, as well as the state’s partial reimbursement of expenses constructing the building is seen by Beacon Hill as a revenue “gain” for the town.

So in the ultimate example of bad timing, while Belmont has shown where revenues had fallen off a cliff, in the eyes of the state which dictates the funding, Belmont was awash in dough during that year-and-a-half reporting period because it borrowed funds to pay for a new school.

As Homer Simpson would put it: “D’uh!”

“We’ve had the issue of a … short-term budget distortion from the high school because it’s such a large number just as Covid hits … seems totally unjust to be counting that as revenue because that’s not what it is,” said Adam Dash, chair of the Select Board.

As the town seeks to have its state and federal legislators attempt a hail Mary to convince the state to reconsider its regulations, the prospect of a revenue shortfall for the upcoming fiscal 2022 budget has become only all too real.

Under the provisions of the ARPA, Belmont’s $7.8 million allocation can be used in one of four ways; pay for Covid-related expenses, make premium payments to essential workers, and invest in water, sewer and broadband infrastructure. It was the fourth “bucket,” the replacement of “lost public sector revenue” caused by the pandemic, which austerity groups and town officials saw as getting plugged into the budget. Just how much of the town’s share can be used in an unrestricted manner is based on a formula provided by the state’s Division of Local Services.

It was this rule making from the state – dictated in the federal law – is when Garvin said she and other municipalities began “hearing rumblings” as state officials began writing the regulations.

“I had been concerned from the beginning … [that] sometimes the state does like to get involved in defining how the money can be expended,” said Garvin. One such red flag from as far back as the first days of summer was how the rule makers first defined as revenue.

Is a debt exclusion a revenue windfall? The state thinks so

“At that point, I decided it was important to get the auditors involvement” and allow them to do a “deep dive” into the town’s revenue figures in regards to the state regulations, said Garvin.

Craig Peacock, a partner with the town’s auditing firm of Powers and Sullivan, told the board that since the summer what the state has deemed eligible for reimbursement “has been a moving target” resulting in attempting to make calculations “a little confusing.”

What Peacock first had to determine the revenues in fiscal 2019 which the feds was using as the base year and compare it to losses in calendar 2020. While the town did show a decrease in its general funds of $1.6 million, there were two unexpected line items which offset that lost revenue.

One is the on-going cost reimbursements building the new school from the Massachusetts School Building Authority, which is paying nearly $85 million of the $295 million project, a significant amount – $24 million – being received in calendar 2020. Even with the MSBA reimbursement figure removed, said Peacock, the state also views the $213 million debt exclusion the town is using to pay for its portion of the building’s cost as yet another source of revenue, with Belmont “collecting” an additional $11.7 million in calendar 2020. Without these items, Peacock said the town by the state’s reckoning did suffer a revenue shortfall during the 18 months.

The end result is while Belmont can use the funds for the three of the four buckets, ARPA funds will not be going into the one ARPA bucket the town most needs to fill. While the town will have $7.6 million to spend – in two $3.8 million segments with the second available next fall – “it has made it much more difficult for us to use it,” said Garvin.

The news didn’t go down well as Select Board Vice Chair Roy Epstein calling the state’s rules an accounting exercise that “frankly makes no sense to me,” pointing out that the reason the town undertook the debt exclusion was to pay for a school which can hardly be seen as a revenue windfall for Belmont.

“I think the treatment of a debt exclusion that are earmarked for particular capital projects to just really seems nonsensical,” said Epstein as Dash questioned whether the federal government understands the New England-concept of debt exclusion which could have been exempted in the ARPA law.

The Select Board’s Mark Paolillo asked Peacock who in state government can the town question how they rationalize school debt and reimbursement of expenses as “revenue.” The answer was less than encouraging.

“We are not aware of any caveat in the interim final rules that would allow us to remove the debt exclusion and we are not aware of any agency that would be willing to review and discuss that because currently it is in the rules”, said Peacock.

As it currently stands, without the ability to replenish the lost public revenue and if there are no big ticket infrastructure projects ready to go into the ground, Peacock said there is a chance Belmont will return a portion of the ARPA funds back to the US Treasury.

If there is a glimmer of hope, the guidance is being written by the state and there are several communities feeling the same pinch by the state’s rules writers, said Peacock.

“As they say, the squeaky wheel gets the grease so I don’t think it ever hurts to try to contact” state legislators, advised Peacock. “I do know other communities that are contacting their state reps who have very similar attributes” that are preventing them from reporting revenue losses and are “trying to change the rules before the final rules become final.”

Pair Of Public Meetings This Week: Belmont Middle/High Building Committee And American Rescue Act

Photo: Two public forums will be held this week

The Select Board will be joining several committees and groups for two virtual joint public meetings that will effect the lives of every resident in Belmont.

On Tuesday, Aug. 17 at 7 p.m., the Select Board will be joined by the Belmont Middle and High School Building Committee and the School Committee to discuss aspects of the construction of the $295 million 7-12 school that has been in the news. One area that will be brought up will be design and construction concerns at Concord Avenue and Goden Street, the new traffic lights at the intersection, site design review as well as public comments on the evaluation of construction impacts to neighboring properties.

The Transportation Advisory Committee and the High School Traffic Working Group have also been invited to join the meeting.

The meeting will be conducted Via Zoom Meeting. By computer or smartphone, go to:
https://us02web.zoom.us/j/89055600185?pwd=alNQLzVHOFM3bEZuU2dUWjczaTVYdz09 and follow on-screen instructions.

On Wednesday, Aug. 18, the public is invited to join the Select Board’s joint meeting with the School, Warrant Committee, and Capital Budget Committee also at 7 p.m. via Zoom to discussing the how the town will distribute the approximately $7.6 million in American Rescue Plan Act funding the town received earlier in the year.

By computer or smartphone, go to: https://us02web.zoom.us/j/84474554147

Both meetings can be seen live at the Belmont Media Center:
Channel 8 on Comcast
Channel 28 or 2130 on Verizon
Or watch online at belmontmedia.org/watch/govtv

If you have any questions, please reach out to the Town Administrator’s Office at townadministrator@belmont-ma.gov or call 617-993-2610

Public Meeting On Federal COVID Funds And State Aid Set For Wednesday, March 31

Photo: Poster to the meeting

The $8.6 million Belmont will receive from the $1.9 trillion American Rescue Plan has been the topic of a heated debate ever since it was signed into law by President Biden on March 11.

In one corner are those who are attempting to defeat a $6.2 million Proposition 2 1/2 override who see the money filling town coffers with more than enough funds to render the override moot.

On the other side, proponents of the override contend that most of the cash is restricted to reimbursing town revenue lost due to COVID-19 and can’t be used to as a one-time stop gap for the town’s structural deficit.

And in the past three weeks, “I am seeing some things that are being misreported in regards to those numbers,” Town Administrator Patrice Garvin told the Select Board Monday, March 29.

In an attempt to provide a clearer picture of the funds and how they can be used for, the Financial Task Force II and Warrant Committee are inviting the public to a virtual presentation to share the latest information regarding the new Federal Aid Bill and also provide an update on projected state aid in the coming fiscal year 2022.

When: Wednesday, March 31
Time: 7 p.m.
Zoom: https://us02web.zoom.us/j/87434286149

Questions will be taken at the conclusion of the presentation period
through the Q&A function. The meeting facilitator will inform those
attending when questions can be submitted.

Belmont To Receive $8.6M From American Rescue Plan … With COVID Strings Attached

Photo: President Joe Biden signing the American Rescue Plan. Creator: Adam Schultz | Credit: White House

Not only will most Belmont residents receive a $1,400 check from the $1.9 trillion American Rescue Plan signed into law by President Biden on March 11, but their Town of Homes is also set to be a beneficiary from the same stimulus package created to lessen the economic repercussions of COVID-19.

According to State Sen. Will Brownsberger, preliminary information from the state shows Belmont will receive approximately $8.6 million from the Rescue Plan with $1 million of the total targeted to Belmont schools.

“I would just like to underline that most of this money is coming from the federal government,” Brownsberger told the Belmont Select Board at its meeting held virtually on Monday, March 15. “This is rain comes falling from US Sen. [Elizabeth] Warren, Sen. [Ed] Markey and US Rep. [Katherine] Clark, so credit to them.”

In addition, both Brownsberger and State Rep. Dave Rogers, also at the meeting, said due to revenues coming into state coffers stronger than expected despite the pandemic’s economic downturn due to the pandemic, state aid to cities and towns will be greater than earlier forecast.

But before anyone in Town Hall or the school department begins spending this one-time windfall, Brownsberger told the board “that aid comes with a number of strings in terms of … how it can be used.” And nearly all of the threads have to do with COVID.

Brownsberger said the funding comes with defined eligibility criteria that will determine “how much of that money can be used for general government purposes and how much of it can be used only for particular projects” related to COVID relief.

According to preliminary reports, the money can be spent on one of four categories which includes:

  • Reimburse town funds spent responding to the public health emergency of COVID,
  • Lessen the negative economic impact on the community, (“So it could be broadly used to provide aid to small businesses, households,” Brownsberger said.)
  • Replace town revenue lost to the COVID recession, and
  • Make investments in water, sewer, or broadband.

To receive the funds, the town will commit to a certification process – rather than applying for the money – in which the town tells the state (which is running the program for the federal government for municipalities smaller than 50,000 people) that it understands the constraints of how the funds will be used.

Rogers said regulations are still being written by the US Treasury “on how the money can be spent as much of it is earmarked and targeted in very specific ways.”

Patrice Garvin, Belmont’s town administrator, said she has “not received enough information on how this money can be used.”

On the state side of the fiscal ledger, Rogers said the state budget is “in reasonably good shape given everything that has happened” and the legislature is now expected to have the ability to fund Chapter 70 general education aid formula at a level above Massachusetts Gov. Charlie Baker’s estimate for state aid announced on Jan. 27.

“We’re very committed to funding the Student Opportunity Act designed to increase local school aid to a level that’s really commensurate with a town’s need or actual spending, particularly for Belmont on the cost of health care and special education,” said Brownsberger. The end result is Belmont could see “maybe a few $100,000” more in Chapter 70 aid in fiscal 22.

One area the state is advising cities and towns not to do is make concrete fiscal decisions using these figures.

“[The Secretary of State’s office which distributed the data] said the information … should be viewed as preliminary and subject to change,” said Brownsberger reading from notes. “We’d strongly advise against the town making plans based on this preliminary information as the US Treasury will ultimately calculate the final amounts. So towns should not make plans about overrides based on these estimates.”

And that is the word coming from the campaigners seeking to pass the override on April 6.

Unfortunately, the stimulus money “doesn’t change the fundamentals concerning Belmont’s structural deficit, which is projected to be almost $20 million over three years even after spending down our cash reserves,” said Nicole Dorn, co-chair of Yes for Belmont which is advocating for the passage of a $6.2 million Prop 2 1/2 override on the April 6 town election ballot.

“This one-time infusion of funds won’t cover our operating expenses because it is restricted to certain programs or needed for COVID-related expenses. Every year we delay addressing our budget issues only makes our structural deficit worse, and means we’ll need a bigger override that is more expensive for taxpayers,” she said.