That the pandemic turned the world upside down is an understatement. That it continues to persist and may well into our futures seems more likely than not. “Pivot” has come to summarize the strategy employed by businesses both large and small to navigate from disaster to the new “normal”. But for countless businesses that could not pivot, there was no new normal, instead doors closed and hundreds of thousands lost their jobs.
It is easy to get caught up in the political divisiveness of the day, trying to determine what is true and what is manufactured, separating what is driven by anger and fear from what is driven by fact and altruism.
If you are not consumed by the chaos, you might instead be exhausted by the struggle to stay above the fray, the effort to keep your family functioning in a way every day that is meaningful, fulfilling and sustainable. It would be easy to miss how much the federal government has actually contributed to maintaining some semblance of normalcy.
These are mind-boggling amounts of money, made available to taxpayers, local governments, businesses and schools to help make sure we can continue to live our lives in a productive way in the midst of the most serious health crisis of our time regardless of our political persuasion.
The initial funding in the form of the Coronavirus Aid Relief and Economic Security Act (CARES) signed into law in March 2020 and was worth more than $2 trillion (estimates range from $2.08 - $2.59 trillion). It provided the most obvious individual support. Highlights included $1,200 economic impact payments (EIP) directly to taxpayers, unemployment benefits bumped up by $600 a check and small businesses stretch loans that could eventually be forgiven.
Of that money, $30.75 billion was allocated to the Education Stabilization Fund. $13.2 billion of that allotment was allocated to the Elementary and Secondary School Emergency Relief Fund (ESSER).
On Dec. 27, 2020, the federal government signed into law the Coronavirus Response and Relief Supplemental Appropriations Act (CRRSA) worth $910 billion in pandemic related relief. It provided an additional $54.3 billion for the Elementary and Secondary School Emergency Relief Fund (ESSER II).
Then on March 11, 2021, President Biden signed the American Rescue Plan Act (ARPA) into law. It provided another $1.9 trillion to combat the continued impacts from COVID-19.
Of that money, $65.1 billion was allocated directly to counties across the U.S. based on each county’s share of the U.S. population. $45.57 billion (70%) of those funds went to metropolitan cities and $19.53 billion (30%) went to non-entitlement units (NEU) of local government.
NEU is defined as a local government serving a population of 50,000 or less. The total grant size to NEUs was capped at 75% of the locality’s most recent budget as of Jan. 27,2020. Funds are being allocated in two payments, half in 2021 and half in 2022. Funds must be spent no later than 2024.
The impact of ARPA funds may be less obvious than previous stimulus packages, but just as important aimed at helping local government keep core services operating without interruption until the economy recovers enough to once again shoulder the load.
The truth was, nobody could predict the duration of the pandemic and its impact on each community was different depending on what kinds of businesses made up their economies and how it impacted their workforce, how many jobs did a community lose.
For example, economies dependent on hospitality, tourism and service-oriented businesses were impacted more than tech, communications and finance businesses.
What communities did have was a sort of playbook developed as a result of the Great Recession of 2007-2009.
In New Richmond, the city immediately tightened its belt implementing cost containment strategies including hiring freezes, cancellation and postponement of non-essential contracts and training, suspension of wellness and staff development budgets and a 25% reduction in operational budgets. They prepared for the worst and hoped for the best. Those measures saved the city $882,903 while still allowing it to maintain core services including public safety and utilities.
ARPA funding guidance ended up being somewhat fluid developing in response to questions from the communities as to how they could use them.
“A lot of communities were saying,’This is how we would like to use the funds,’ only to find out later from the Treasury that they could not. As communities got into more of the details about how funds could be used, the field of how you could use the funds became more and more narrow, Federal final guidance did not come out until nearly the same time as the checks arrived” said Joel Enders a management analyst with the city of New Richmond.
In New Richmond, Enders worked with Assistant City Administrator and Finance Director Rae Ann and council members to craft an approach that would maintain core services and protect the city’s fund balance yet procure the funds quickly and deploy them in a way so as to benefit the maximum number of residents without having to create any new bureaucracy to disburse and overseer the use of the funds.
“Relative to how the pandemic impacted other communities, that changed how we approached ARPA and having a small staff. We also had to look at it from the perspective of reporting requirements and are we going to have to add staff and create new programs to administer these funds,” Ailts said.
As guidance on how the ARPA funds could be used became more clear, New Richmond did not qualify for some of the popular choices including public assistance paying utility bills or general revenue loss.
“New Richmond was not hit as hard as some other communities were by the pandemic from a job loss perspective,” said Enders.
New Richmond chose to invest in infrastructure. The city received a payment of $492,675 in June, roughly half of the $985,000 they are scheduled to receive in total.
”With infrastructure, we felt confident that we were going to meet all of the criteria from the grant guidance. At the same time, it’s a continual need within the community to address our infrastructure and to ensure the quality of it. It also allowed us to put money into the community quickly and the reporting requirements for infrastructure were very simple,” Ailts said.
New Richmond invested $334.808 into three storm water, water and sewer projects, East Eighth Street, Pierson Street and a project to relocate a water main to assist St. Croix County with a County Road K bridge reconstruction project.
The remaining $157,867 is being held as a contingency awaiting a decision by the DNR pertaining to the replacement of lead service lines. If they are not used for that project, they will be carried forward into 2022.
“Getting the funds out and distributed to the community in the most efficient manner possible was one part of it. I think we have been able to do that. We didn’t have to establish a new program so there wasn’t any delay. These are funds that reduce every taxpayer's portion of what these projects were going to cost. The funds essentially helped lower the overall cost of the projects and reduced the amount we need to borrow,” Ailts said. ”With the utilities, projects are paid for with revenues obtained through the utility, so reducing that cost impacts not only property owners but any resident that uses that infrastructure. This is a good use of these funds because of the impact it is having on the whole of our community.”
Roberts, Somerset, Hammond
Officials from the Village of Roberts expected to receive a total of $197,718.90 in two equal installments of $98,859.45 each in 2021 and 2022. The village has not experienced a significant impact on its tax base due to the pandemic at this point.
In a statement, the Village Board concluded, “That it (ARPA funds) should be used equitably across departments and that we'll run out of money before running out of places to spend it.”
So far the village has spent $50,000 of ARPA funds to purchase a new squad car scheduled to be purchased in 2022. Using the federal funds helped the village avoid levying taxes for the purchase. Other expenditures of ARPA funds include the purchase of hardware and software to equip trustees with tablets and email addresses. Additional potential uses include the purchase of equipment to enable the village to stream meetings online and compensation to make up emergency workers wage differential. The village has not yet determined how it will spend the balance of its 2021 allocation and expects to carry forward a balance into 2022.
In a statement, the Village of Somerset reported it was awarded $305,632.18 from the American Rescue Plan Act in installments of $152,816.09 each.
“To date the village has not spent any of the funds but intends to use it toward water and sewer utility infrastructure improvements,” read the statement.
The Village of Hammond received $98,702.45 in 2021 and expects to receive $98,702.45 in 2022 for a total of $197,404.90 in ARPA funding.
With its 2021 allocation, the village plans to spend $56,000 to remediate a seepage cell at the Wastewater Treatment Plant (WTP), $30,000 to add the lift stations to the WTP SCADA monitoring system and $391 to United Rescue and Fire for virtual training equipment.
The board is still considering spending some of the ARPA funds on a new park but have not made a final decision. They expect to carry forward $12,311.45 into 2022.