PITTSFIELD — One possible location for the more than $40 million in federal coronavirus relief money coming to the city through the American Rescue Plan Act is backfilling lost municipal revenue. In Pittsfield, a Treasury Department calculation determined that Pittsfield lost $2.33 million in revenue last year.
The lost revenue accounts for about 1.3 percent of the city’s $175 million in revenue for fiscal year 2020.
Pittsfield Finance Director Matt Kerwood said the lost revenue number isn’t as straightforward as it might seem.
“I don’t want there to be a perception that the city lost $2.3 million, because that’s not accurate — that’s the calculation based on the formula set forth in the interim rule,” Kerwood said.
Kerwood said that because residents continued to pay their property taxes during the pandemic, much of the city’s budget was unaffected by the pandemic.
Cities that received more than $5 million in ARPA money or had populations greater than 250,000 were required Aug. 31 to file a report with the Treasury Department on their ARPA-related spending to date and their calculation for lost revenue.
Kerwood said the first portion of the report was easy: Pittsfield hadn’t spent any ARPA money by the report date. The second part of the report was more complicated.
To figure out how much city revenue might have been lost during the pandemic, cities were told by the Treasury Department to subtract the actual revenue in 2020 from the anticipated revenue for 2020.
To standardize the anticipated revenue number, cities were allowed to calculate their revenue at the higher of two rates: either a 4.1 percent growth rate — that’s the nationally anticipated growth rate — or their average growth rate over the past three fiscal years.
Kerwood said that the city used the 4.1 percent rate in its calculation. The city will be required to recalculate its lost revenue each year on Dec. 31, until 2023.
Pittsfield’s next report to the Treasury Department, on Oct. 31, will detail any projects selected for ARPA money, the amount allocated, the project status and the demographics of the residents expected to benefit from the project.