The City Council was faced with a difficult financial dilemma at the Thursday, Oct. 28 work session.
As usual the council decided not to decide and then kinda sorta allowed city staff to make the decision anyway.
The problem is, which bucket of money do they want to use to pay for revenue losses caused by the COVID-19 restrictions.
Should they take the money out of the left pocket – the city fund balance, which is full to overflowing – or the right pocket, which is filled with American Relief Plan (ARP) money and will be refilled by the federal government next May whether it is empty or not.
According to Assistant City Manager Larry Davis, the City of Greensboro had about $6.3 million in revenue shortfalls due to the pandemic restrictions. To make the city whole, in its largess the federal government allocated $59.4 million to Greensboro, to make up for that loss.
And yes, those figures are correct, except the City of Greensboro received an additional $10 million for revenue shortfalls at the Greensboro Coliseum, so the Coliseum is not included in the $6.3 million.
Davis told the City Council they could simply take the money from the city fund balance, which is city-speak for savings account, and keep the $59.4 million to spend on other projects, or it could keep the fund balance intact and take the $6.3 million from the ARP funds and still have over $53 million leftover.
Since the City Council plans to give some of the $59.4 million away to for-profit and non-profit organizations in Greensboro that suffered losses from the COVID restrictions, the consensus of the council was to wait until all the applications for funding were received. The deadline to apply for those funds is Friday, Nov. 5.
The three operating funds that make up the $6.3 million are the hotel/motel tax fund, which shows a revenue deficit of $2 million. The parking fund, which showed a deficit of $1.5 million, and the Tanger Center for the Performing Art, which had no revenue but an operating cost of $2.8 million.
The city staff recommended that these three funds be “stabilized” using the ARP funds.
Davis attempted to explain to the City Council that it was not wise to carry these deficits on the books and noted “both hotel/motel and parking have debt service requirements.”
After the council agreed not to make a decision, Davis said that the staff would cover the $2.8 Tanger Center deficit with local funds, not ARP funds, and Mayor Nancy Vaughan said that Davis could do so. Nobody on the City Council objected even though the consensus moments before had been not to make a decision on which fund to use.