By Mary Hladky
The massive $1.9 trillion American Rescue Plan is providing much-welcomed relief to southeastern Palm Beach County cities and towns strained by the COVID-19 pandemic, but they aren’t rushing to spend the money.
They are proceeding carefully and deliberately, soliciting input from their communities on what the biggest needs are and matching that against U.S. Department of Treasury guidance on what they can use the money for.
Cities and towns are heeding advice from both the Treasury Department and the National League of Cities to take it slow so they make the best use of the money and avoid errors that would compel them to return funds spent on ineligible projects.
They are not under pressure to make decisions quickly. The Treasury Department gives them until Dec. 31, 2024, to obligate the money and until Dec. 31, 2026, to spend it.
Municipal leaders are awaiting final rules on how the money can be spent from the Treasury Department, which accepted comments on how they would like to see the rules changed until July 16.
“We will be cautious. We will vet it out,” said Boynton Beach City Manager Lori LaVerriere.
“We are going at a measured pace,” said Boca Raton Mayor Scott Singer. “We are not rushing to spend it all immediately. We are going to take the appropriate amount of time to get it right.”
Ocean Ridge Town Manager Tracey Stevens said she told her town commission, “You don’t want to make your decisions quickly. Let’s wait for the final rule and then we can move forward.”
But that doesn’t mean municipal officials are sitting on their hands. They already have good ideas on what they would like to use the money, and at least some have projects that could be implemented quickly.
But the process hasn’t been easy. The initial Treasury guidance issued in May was 151 pages long, and its list of answers to frequently asked questions kept growing over the summer.
“We have spent hours and hours reading this,” LaVerriere said. “It is really intense.
“It is going to be a tremendous amount of work. But it will also be, if we do it right, a tremendous impact on the community. We can do some amazing things with it.”
South Palm Beach Town Manager Robert Kellogg said in early July that he had read the guidance at least four times and finds it understandable.
His issue is that the rules provide his town with limited opportunities to spend the money, and he hopes the Treasury Department makes them more flexible.
Kellogg thinks that other small towns likely are facing the same problem. “I am hopeful as this progresses, they will ease up on restrictions,” he said.
Stevens was considering hiring a grants administrator to ride herd over the process and keep up with reporting requirements. The legislation allows cities to use some of the money they receive to do that.
For Briny Breezes Town Manager William Thrasher, any headaches that come along with ARP funds are manageable considering the town stands to gain about $242,000.
“I am sure I can work through the problems for that,” he said. “That is a lot of money for Briny.”
The ARP allocates $130.2 billion for cities and counties, with cities and towns receiving half of that. The first tranche of money already has gone out, with the rest arriving next year. Of that, southeast Palm Beach County cities and towns will get almost $48 million.
The amount going to the biggest cities has been revised from the initial estimates released by the House Committee on Oversight and Reform. Boca Raton will receive $12.2 million, Delray Beach $11 million and Boynton Beach $13.6 million.
The process is different for small towns. The Treasury Department is sending money they will receive to the state, which will divvy it up largely based on population and send it out.
The ARP allows municipalities to use the funds to cover costs incurred responding to the COVID-19 public health crisis and to replace tax dollars lost during the pandemic. If cities laid off workers because of budget shortfalls, the money can be used to bring them back to work.
Money can go to provide “premium pay” for essential workers who worked long overtime hours and were subjected to health risks because they could not work remotely.
The ARP supports economic recovery by allowing municipalities to provide financial assistance to households, small businesses and nonprofits, and to impacted industries such as tourism, travel and hospitality.
Municipalities also can make investments in improving water, sewer and broadband infrastructure. But since these types of infrastructure aren’t necessarily neatly located within a city’s boundaries, a regional approach might be needed.
One example of the range of expenses and programs that can be paid for under the bill, approved by Congress on March 10, is the category of COVID-19 mitigation efforts.
They include vaccination programs, testing, contact tracing, isolation or quarantine expenses, personal protective equipment, giving vulnerable populations access to medical or public health services, surveillance of coronavirus variants, enforcement of public health orders, communication to the public, expanding health care facilities, prevention programs in schools and congregate living facilities, improving public health data systems, and ventilation improvements in health care facilities.
The ARP also spells out what the money can’t be used for.
Cities can’t cut taxes and then replace the lost revenue with ARP money.
They can’t make a deposit into a pension fund to reduce an accrued, unfunded liability. They can’t use it to pay off financial indebtedness such as a loan.
Other ineligible uses include using the money to fund debt service, pay legal settlements or judgments, or to put the money into rainy day or reserve accounts.
Infrastructure spending is limited to water, sewer and broadband.