This Week in Federal Funding

Route Fifty's This Week in Federal Funding newsletter provides weekly updates on what's happening with the pandemic-era aid dollars the federal government is sending to states and localities. The newsletter goes out on Tuesdays and Route Fifty Today subscribers receive it automatically. If you don't subscribe to Route Fifty Today and would like to receive This Week in Federal Funding, you can sign up for it here.

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Welcome to Route Fifty’s This Week in Federal Funding! I’m Senior Editor Bill Lucia.

From R50 this week: Dan Vock dives deep on the federal funding flowing to water and sewer projects. Managing editor Jean Dimeo was at the National Association of Counties conference in Maryland over the weekend and reports on discussion there about investing American Rescue Plan Act funds with an emphasis on equity. And Kate Queram covers Montana’s plans to use federal aid for expanding access to child care.

What we’re watching: On Friday, I spoke with Mark Poloncarz, county executive of Erie County, New York, home to Buffalo. Poloncarz last month unveiled a spending plan for the first half of the county’s ARPA funding, as well as restored state aid, which together totals nearly $124 million. The plan cleared the county legislature last week on a 7-4 vote. (Local GOP lawmakers objected to the plan, for more on those disagreements see here.)

What caught my eye with the Erie County package is how it serves as an example of the ways local governments are spreading the federal funds (here with state money mixed in) across different priority areas. About $47.5 million is available to backfill lost revenue and support general spending. Beyond that, there’s about $31 million for water and sewer projects and $14 million for park upgrades. And the plan will fund a new nine-person office of health equity. 

It also covers restoring about 100 of 287 positions cut during the pandemic (the county has about 4,000 full-time employees) and it includes $5 per hour premium pay for some workers who reported in-person between March and June of 2020. “We wanted to reward those individuals,” Poloncarz said of the bonus pay, adding that some of these employees were coming into contact at work with people sick with Covid-19 and “went above and beyond the call of duty.”

One way Poloncarz puts the money in context is by comparing it to how much the county typically borrows for capital projects—about $35 million annually, of which $5 million to $6 million is for sewers. The roughly $31 million for water and sewer projects in the new spending plan is five or six times that amount, Poloncarz pointed out. “It’s been a game changer,” he said of the money. “It’s the largest investment in a short period that the county has seen, truthfully, since the tobacco settlement was done over 20 years ago.”

One widely cited best practice for the one-time ARPA funds is to not use them for recurring costs that will extend beyond the 2026 timeframe for when the money must be spent. I asked Poloncarz about ongoing spending in his plan—like the new health equity office, restoring dozens of cut jobs and adding about two dozen positions in areas like parks, EMS and the DA’s office. He said these types of expenses are limited in scope, that budget projections show that the county will be able to afford them in future years and that he took the one-time nature of the funding into consideration. 

“One thing I told our department heads is, ‘you can think big but remember this money runs out,’” he said. “I didn’t want to saddle the county with $90 million of operating costs in the future because we received $90 million this year.” 

Elsewhere… Virginia Gov. Ralph Northam on Monday proposed $353 million to support small businesses and sectors, including tourism, that were hard-hit by the Covid-19 downturn. 

In St. Louis on Tuesday, Mayor Tishaura O. Jones’ office released a law department memo that raises concerns that a proposal from Board of Aldermen President Lewis Reed to direct ARPA funding toward certain economic development initiatives could run afoul of Treasury Department rules. [Memo here, coverage from St. Louis Post-Dispatch here].

Milwaukee, Wisconsin Mayor Tom Barrett, has rolled out a series of ARPA spending proposals in recent days, including $30 million for housing programs, $13.8 million for job training and other workforce initiatives, around $6 million for street upgrades to discourage reckless driving, $10 million for streetlight improvements, $7.5 million for local business assistance and $3 million for violence prevention activities, including “violence interrupters.” The city’s Common Council will be reviewing the mayor's proposals in the coming weeks.

Meanwhile, in Alabama, Attorney General Steve Marshall on Friday highlighted letters he wrote to state and local officials urging them to prioritize ARPA funds for combating violent crime, or what he described as “the fight against this dangerous lawlessness.” Earlier last week, 42 churches and other groups in the state wrote to Gov. Kay Ivey, calling for ARPA investments in areas like housing, education, nutrition, broadband, public transportation and Medicaid.

The deadline to comment on Treasury’s ARPA rules is this Friday, July 16. The docket for the rules is here.

That’s it for this week. In the meantime, if you have news tips or feedback on what we should be covering, if you want to share your community’s story, or if you just want to say hello, please email us at: editor@routefifty.com. Thanks for reading!

This week's federal funds stories from Route Fifty:

• For States and Localities, a Sudden Rush of Federal Water and Sewer Funding
• How Local Governments Can Spend Their Federal Funds To Boost Equity
• How One State Plans to Use Federal Relief Money to Shore Up Child Care Options

For last week's edition, which looks at how states have approached their American Rescue Plan Act allotments, click here.