The Fox Cities Transit Commission met 03/09/2021. There were no action items, but there were several information items.
The first information item was a review of the “CARES Act Fund Balance”. This item was placed on the agenda at the request of one of the commission members at the last meeting. He thought it would be a good idea to get an overview of how Valley Transit has used the money that came its way in 2020. It was a lot of dollars, and he thought it would be good to be informed about what they’ve done with it and what they’re thinking of doing with any unused funds.
I was interested in listening to this meeting and hearing this review because it sounded like it was, in part, probably prompted by the discussion at the 12/08/2020 Transit Commission meeting in which then commissioner Dan Wilson expressed concerns that Valley Transit management was not following proper procedures when making purchases with CARES Act funds.
I was expecting a brief overview in which it was clearly stated what things were purchased with CARES Act funds and how much those things cost. That did not happen, however.
Valley Transit General Manager Ron McDonald requested that City of Appleton Finance Director Tony Saucerman report to the Commission on the use of CARES Act funds.
Director Saucerman said that CARES Act money was provided to the whole city in various areas, but he was going to keep the discussion on the Valley Transit portion of those funds. The CARES Act was passed in March and when the money first came out, Valley Transit was awarded $7.4 million. They weren’t given a check for that amount but were essentially awarded a line of credit and told “If you need it, this is the amount we’ve allocated to you.” After that, Valley Transit submitted an application saying that based on their own estimates, they thought that $2 million would be enough to cover the Covid expenses that they were going to incur. That cushion was finalized and approved, and that $7.4 million became $2 million. Valley Transit also submitted an amendment to the Finance Committee for $500,000 to give them purchasing authority at the local level. Through that act, they were essentially authorized to spend $500,000 on Covid-related expenses. By the end of the year, they had spent a little over $300,000. They will then apply to the Federal government to be reimbursed for those expenses.
Director Saucerman explained that the grant is a reimbursement grant, so they have to pay up front and then get reimbursed for their expenses.
At the end of 2020, Valley Transit had $308,902 of expenses to be reimbursed for. This year, Valley Transit will request the remainder of the budget amendment–the difference between $2 million they thought they would need and the and $500,000 purchasing authority that the Finance Committee granted them in 2020. So they’ll be asking for a purchasing authority of $1.5 million for 2021.
On top of that, the Federal government had initially granted them a line of credit of $7.4 million so there’s roughly $5.4 million additionally available if Valley Transit needs it.
They opened things up for questions.
One commission member asked if there is a timeframe for access to the remainder of those dollars.
Per Ron McDonal, at this point there is no definitive end date; however, they’ll have to wait and see what the legislation is because they change things with each bill. The particular grant Valley Transit has no definitive deadline, but they have been told by the Federal Transit Association to spend it down and not sit on it.
There were no other questions.
[I was surprised that there were no other questions. All in all, the presentation seemed lacking to me. I don’t understand why the Covid related purchases were not clearly itemized. Presumably they know what they are because they gave a specific total of $308,902 in spending. In past meetings, there was mention of them having bought plexiglass dividers and some kind of air filtration/purifying devices, but there’s no word on whether that was all they purchased. There was also no explanation as to what Valley Transit plans to purchase with the remainder of the grant funds available to them. I didn’t understand why they were going to ask for $1.5 million in purchasing power from Appleton or what they planned to use it for.]
Mr. McDonald moved on to discussing other funds that are available to Valley Transit.
On December 27, 2020, the Coronavirus Response and Relief Supplemental Appropriations Act of 2021 (CRRSAA) was signed into law. Through this act, Valley Transit was allocated $32,146 in the form of a 5310 grant. A section 5310 grant is a grant that can go toward providing enhanced mobility for seniors and people with disabilities. Valley Transit has not applied for that grant yet, but it is out there.
Mr. McDonald went on to explain that the previous grant that Director Saucerman discussed was a 5307 grant. 5307 grants are what they typically use most from the Federal government.
At the time of the meeting, the American Rescue Plan Act of 2021 had not been voted on by the House or been signed into law; however, Mr. McDonald stated that once it was passed, his best estimate was that Valley Transit would be eligible for about $3.3 million through it. He stated that that money should come through as a 5307 grant just like the CARES Act money came through as. He said that there is a deadline attached to this particular grant, and it will need to be spent before the end of fiscal year 2024.
He opened things up for questions again.
One commissioner asked, in light of the deadline attached to this American Rescue Plan Act money, if they were in the middle of a notable capital project that was not completed but there had been commitments made to a certain cost for that project, could those dollars be held in reserve for the final payments or did all these expenses have to be incurred before the deadline.
Mr McDonald said they had been told they had to spend the $3 million before the end of 2024. He said that they would keep an eye on that. If necessary, they could spend the $3 million first because it has a deadline attached to it before they finish spending the $7.4 million that doesn’t have a deadline attached. There are no regulations saying you have to spend one pot first.
A commission member asked if Ron McDonald could provide some information about what the other uses of the CARES Act monies could be?
Per Mr. McDonald, it can be used to offset holes in revenue from operating and can also be utilized for capital expenditures. They can use it for whatever they use their current 5307 grant for which is basically their entire operations.
A commission member asked if the money specifically had to address pandemic needs?
Mr. McDonald said that it’s a 5307 grant, so there are no guidelines specifying what it can be used for other than whatever 5307 grants are normally allowed to be used for.
[This is not necessarily a criticism of Valley Transit, but I was surprised to learn that, if I correctly understood the information presented, the government has handed Valley Transit $10 million in Covid relief money that doesn’t even have to be spent on Covid related expenses. Of that $10 million, it sounded like Valley Transit only spent $308,902 on Covid related expenses. They didn’t outline what they planned to spend the remainder of the money on, but it didn’t sound to me like they had ongoing Covid expenses.]
View full meeting details here: https://cityofappleton.legistar.com/MeetingDetail.aspx?ID=834830&GUID=8E3DB36D-A779-4D59-B952-3175AAA77CEE&Options=info|&Search=
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