The town of Stowe will use nearly half a million in federal dollars to help fill municipal coffers that lost more than twice that amount during the first few months of the COVID-19 pandemic.
The estimated $440,000 the town expects to receive from the federal American Rescue Plan may ease some of the financial pain the town’s utilities have felt, but that’s only for the prior fiscal year. Revenue for the year that ends June 1 could be down more than twice that.
Town manager Charles Safford said his inclination for using the federal money is to recover some of that lost revenue, rather than plugging it into any future infrastructure projects.
“It will not fill that gap entirely, but it will help out,” Safford said last week.
According to figures released by town finance director Cindy Fuller, the town lost $458,481 in expected revenue for the previous fiscal year, the last quarter of which marked the beginning of the pandemic.
The bulk of that was from the $138,300 decline in rooms, meals and alcohol sales — the town levies a 1 percent local option tax on those, and collects a portion of the tax. That revenue is split between paying down bonded debt and funding municipal projects not otherwise paid for in the town budget.
Here are the other municipal departments’ revenue picture for last year:
• Emergency Medical Services, down $76,000
• Parks and Recreation, down $27,400
• Stowe Arena, down $90,000
• Water department, down $76,000
• Sewer department, down $50,700
The town estimates the loss of revenue for the current fiscal year — which continues to experience the peak of the pandemic — could top $1.1 million.
Stowe Electric Department, a separate municipal entity dependent on ratepayer revenue, reported a $624,476 loss on the commercial rate side in 2020, but no loss in residential revenue. The American Rescue Act money earmarked for Stowe will be split proportionately among the town and electric department, Safford said.
Stowe Electric Department manager Ellen Burt reported that the utility’s late charge revenue is down $11,243 because the utility has not assessed late fees since March 2020. She said the actual loss is much higher because late charges in the past year would have been based on past due amounts that “are significantly higher than ever.”
Safford said there are a few other ways the town could have spent the money:
• Pay for costs related to assistance to households, small business, non-profits and affected industries such as tourism, travel and hospitality.
• Boost pay for government workers who perform essential work during the public health emergency (up to $13 per hour in addition to base pay up to $25,000).
• Provide grants to employers with employees who perform essential work.
• Make investments in water, sewer or broadband infrastructure.
“Sometimes, you get into federal programs and processes, and it can be very challenging,” Safford said. “If we can simply recover our money and if there is a fund balance or something going forward, we can figure out how to re-appropriate that within the municipality” rather than get mired in federal bureaucracy.