The American Rescue Plan (ARP) has presented a great opportunity for public sector entities and has provided $350 billion to help state and local governments make up revenue losses related to the COVID-19 pandemic. Baker Tilly’s practice hosted a webinar to discuss ARP reporting standards, funding for revenue loss allowances and to hear how the following four municipal leaders have maximized ARP funding for their communities.
Listening, then deciding
Tom Dermody, the mayor of La Porte, Indiana, is a man on a mission. Speaking during the webinar, Dermody noted that when he took office in 2016, half of the residents of La Porte, located an hour east of Chicago, lived in rental housing, managed by “landlords and slum lords who had been taking advantage of our community for far too long.” Ironically, the most impoverished city residents lived in aged housing located right next to city hall. “The living conditions were unacceptable,” he said.
Members of Dermody’s administration, along with the city’s housing committee, set out to change the trajectory of the lives of their city’s poorest residents by improving the quality of their housing. Central to that effort was Dermody’s forward-looking approach to obtaining the necessary funds and his willingness to actively look for funding from new sources, including the American Rescue Plan (ARP), enacted in March 2021.
Although ARP offers a vital financial lifeline, it involves substantial policy considerations and compliance requirements. Dermody told his La Porte constituents that although their opinions were welcome, he alone would make the final decisions about how the city would spend any funds they were able to obtain. “We looked at the ARP funds as one-time use funding for things we couldn’t do with our current budget,” the mayor recalled. “Instead of having 22,000 people give me their opinions of what to do with the money, I decided our council and I would come up with these target items then present them to the public. I told them if they have questions or concerns, we’ll listen, but you elected us to make decisions. So far, we’ve had great support from our community.”
The mayor championed an effort to increase the population of LaPorte, which has held steady at around 22,000 for 45 years. To help attract new residents, the city is working to boost tourism by revamping the 100-year-old Civic Auditorium, adding new seating, air conditioning and roof. Last January, the auditorium hosted the area’s first national basketball tournament, a three-day contest that included the nation’s Top 10top-ten high school teams, and coverage by ESPN. Beyond serving as a sports and entertainment venue, the building will now also be available for emergency shelter when needed. Beyond serving as a sports and entertainment venue, the building will now also be available for emergency shelter when needed.
The city of LaPorte expects to receive nearly $11.5 million in ARP money during FY 2022.
Road rebuilding
Meanwhile, in northern Wisconsin on the shores of Lake Superior, Mark Abeles-Allison, the administrator of Bayfield County, is waiting to hear if his application for ARP funding this year was successful. He applied for a grant through the U.S. Department of Transportation’s Rebuilding American Infrastructure with Sustainability and Equity (RAISE) project. This year, the annual RAISE program received ARP funds that increased the total grant money available from $1 billion to $1.5 billion, with an additional emphasis on rural projects. The administrator explained that his team applied for funding the past two years without success, but “we hope the third time’s the charm.”
In the heavily forested Bayfield County, nearly all the roads have load limits and, during the annual spring thaw, loggers are prohibited from driving their heavily laden trucks on county roads. The county wants to build an all-season road along a core transportation route where county forest meets national forest but “the project didn’t fit the parameters of the usual funding sources,” Abeles-Allison explained.
The administrator mentioned that during the past five years, two separate national disasters closed off two major highways, limiting access through the county. The all-season roadway, he said, “is aimed at creating alternate routes in the event of major washouts and major road closures that negatively impact our community.”
Utility safety net
In Indiana, Lane Young, the utility director for Evansville Utilities, is trying to construct a safety net for vulnerable residents in the state’s third-largest city. Evansville, which is located between Nashville and Chicago, boasts a large stadium that hosted touring musicians until COVID-19 stopped the shows. They also have a casino that has been badly impacted by COVID-related closures. Today, Young said, “Some 25% of residents have incomes at or below the poverty level.”
The city received $64.5 million in ARP funding, based on a survey of community needs the mayor completed before applying. The funds will be divided to expand mental health services in partnership with a local hospital, create affordable housing, improve storm water drainage and fund a utility bill assistance program that will cover power bills when residents can’t pay.
“We’re looking to partner with the groups here in our city that are doing great work in the areas of need and give them some of this funding,” Young said.
Doubling their money
Finally, in St. Paul, Minnesota, Laura Logsdon, who administers federal funds, said the city received $166.6 million in ARP funding, which “is about what the city collects each year in property taxes, so we basically doubled our money in one year. It was a hugely significant amount of funding.”
The mayor and the city council members identified five key priority areas of investment for these ARP funds: neighborhood safety, housing, jobs and works progress, modernization of city services and city financial stabilization, and administration of the funds themselves.
The city is partnering with Ramsey County to accomplish shared objectives. At the top of that list is the construction of 1,000 units of what is known as “deeply affordable housing” to house people who earn just 25%-35% of area median income. Also at the top of the priority list are programs like technology investments to help working people who were negatively impacted or lost their jobs because of the pandemic. The city hopes to re-hire librarians and lifeguards who can restore city services that were shuttered during the pandemic.
Utilize ARP for your community
Webinar host Paige Sansone, CPA, a principal in the Municipal Advisory practice, explained that the fiscal year (FY) 2022 ARP funding program, administered by the Economic Development Administration, is now closed, but new funding will be available in FY 2023. She suggested anyone interested in applying should act now or contact Baker Tilly, then spend the summer identifying projects for funding and preparing information to be ready when funding opportunities open in the fall.
She mentioned that Baker Tilly consultants can help applicants determine their eligibility for ARP funding, identify projects likely to be funded, and complete the applications.
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