City officials confirmed that Norman could see up to $22 million in federal pandemic aid by as early as May 11, but staff are still waiting for guidance on how to spend it.
Congress approved the American Rescue Plan Act but left the expenditure guidelines to the U.S. Treasury Department.
City Financial Services Director Anthony Francisco said Norman is still waiting on the funding and instructions.
“It was supposed to be in the coming week that we get the guidelines, and it was supposed to be by May 11 that we were supposed to get the first distribution of funds,” he said. “I’m very skeptical that we’re going to get the first distribution of the funds when they said we would. We’ll wait and see.”
If the funds are received before the end of the fiscal year June 30, the money would be deposited into the current budget, he said.
During previous budget presentations for the proposed Fiscal Year 2022 budget, Francisco and City Manager Darrel Pyle suggested ARPA dollars for several one-time purchases or expenditures like voter-approved projects.
The list of project expenses adds up quickly, with $9.5 million for the Emergency Operations Command Center and $11.5 million to finish the widening project at 36th Avenue NW. However, city vehicle fleet replacement needs have outpaced revenue, and the city has long said a fifth fire station — a cost of at least $3.5 million — is needed. Other proposed expenditures included debt service pay off and municipal complex renovations.
While constituents have asked the city to spend the funds on residents who are still experiencing hardship due to the pandemic, Francisco told The Transcript Friday that the list presented to council is a suggestion that would benefit as many people as possible in the city, and the use of one-time funds should be limited to one-time sources of revenue.
How the budget is made
The city’s budget – a proposed $85 million this year – is designed over the course of a year, beginning in September of the previous year, Francisco said.
Its direction is driven by a partnership among city departments and the Norman City Council through a series of meetings, retreats and committees.
“There’s a capital budget retreat in November where they (council) give direction on changes to or any additions they want to see, things to be emphasized in the capital budget and the budget in general,” Francisco said. “It’s at that point that staff work really begins putting together the forms for next year’s budget that goes out to the various departments. At that point, there’s, citywide, a couple of hundred staff hours involved. Then when the forms come in, there’s probably four-person, full time staff work for about a month in January.”
Next comes the management team budget retreat. City spokesperson Annahlyse Meyer said this process is highly collaborative.
“After everyone submits their requests, the management team goes through the budget, item by item, and we really talk through what’s needed in the overall picture,” she said. “We rank them by, ‘how do you think this serves the mission and goals of the city?’ ‘Is it something residents are needing right now, is this something that maybe there’s a bigger need in another department?’ If someone has a budget request that can wait a little bit, there’s quite a bit of adjustment that goes on. Hugely collaborative process.”
Challenges to revenue
While the overall budget outlook is looking up on paper, Francisco said the reality is that revenue growth is flat.
The 2020 COVID-19 pandemic and subsequent business closures and capacity restrictions, canceled events and sparse sporting stadium seating presented wide swings in revenue.
“Because of the COVID downtime of last year, when we are comparing the coming fiscal year with what happened in the last fiscal year, it could paint a falsely positive picture,” Francisco said. “If we were down 10% last year, and then we’re showing we’re up 10% from last year, what that would really indicate is that we’re flat because we were down 10% and up 10% from there. We’re back to square one.”
Continuing challenges to revenue include online shopping. State law requires out-of-state online retailers to collect and remit sales tax — municipalities’ only funding source — to the state, which has not installed the systems to enforce it.
Use tax, the tax collected from out-of-state trade, is up, but has not risen to the same degree that traditional sales tax has fallen, Francisco said.
Challenges to the budget include an aging fleet of vehicles, growing personnel needs and capital and infrastructure needs like stormwater mitigation.
Public hearings on the budget will continue throughout the next few weeks, with the next one scheduled for May 25.
The council is expected to adopt the budget by June 15, the last day allowed according to state law.
A copy of the proposed budget is available on the city’s website.