Special Board of Aldermen 6-13-2022 Page 6
my home budget if | got a loan or a grant for $25,000 and | went out and bought something and then | had to whatever
| did and then that relied on normal income, those payments would then be in my home budget. If | didn’t get that
grant again the next year, then I’d be hamstrung because | wouldn’t be able to afford it. Does that make sense?
Steve Bolton, Corporation Counsel
No and let me tell you why. When we don’t think we’re going to get the same amount of grants, we reduce the amount
we’re assuming for grants in the next years’ budget. So if you look at what Mr. Griffin has given you, you see that the
amount of grants last year in ’22 was, Special Revenue Funds including grants, last year was approximately $96
million. This year, it's down to approximately $60 million. So you can see when your anticipation of what you’re going
to get in grants changes, you make that assumption in your budget. So in your home budget if you have a $25,000
grant or windfall from something else and you didn’t think you were going to get it the following year, exactly you don’t
plan or spending it the following year just as this budget and this calculation does.
Alderman Sullivan
Okay. | appreciate you pointing that out.
Mayor Donchess
And you’re right, it doesn’t make sense. That's why these ordinances had been passed. Again, | always thought they
helped. | always equated it with Congress passes laws that help to interpret things like the 14 Amendment or
whatever. But the Legislature invalidated ordinances that help make this more workable saying that only the language
of the Charter applies. So we come up a result that has the problems that you've just identified.
Alderman Clemons
Thank you. This bring up something | want to talk about, which is | did a calculation. Just a quick calculation here
and | took the $59 million that we’re budgeting this year for the FY ‘23 budget for grants. | multiplied by a factor of 3%,
so that comes out to be approximately $1.787 million. Are what you're telling me here is that in Fiscal ’24 if the
spending cap calculation is 3%, we cannot accept any grants above $59,581 plus the $1.787 million because we have
to stay under the spending cap?
Steve Bolton, Corporation Counsel
No. You have to stay under the spending cap in the gross budget, but it doesn’t apply line for line.
Alderman Clemons
Assuming the other lines go up by the same 3%, would that be true? In another words, here’s a better way of putting
it. If we come into a $20 million grant or a $16 million grant like we did this year with the ARPA Funds, right, we can’t
take that money? Is that correct or we can take a portion of it only?
Steve Bolton, Corporation Counsel
It would be theoretically possible to get into that situation, but there are things that can be excluded by vote of ten
Aldermen and that would be capital projects. | have to get the Charter out so | can remember exactly what it is. You
can exclude the principle and interest payments on municipal bonds or you can exclude expenditures for capital
improvements. Typically we have a significant amount of expenditures to capital improvement. So if you exclude
that, that gives you some wriggle room but in fact, you do not have an override provision that you can go to for
essentially and unlimited ceiling. There will be a ceiling of debt some level even if you take advantage of excluding
everything that you can exclude.
Alderman Clemons
So would a grant (theoretically) that went to fund let’s say firefighters gear for example, would that be a capital
improvement that could be excluded from the spending cap?
Steve Bolton, Corporation Counsel
| would say probably not unless you were telling me that the gear that you're talking about has a lifespan of 10 or 15
