Local governments trying to figure out how, when to spend stimulus funds
ALPENA — Frustrating.
That is how some local government officials describe trying to determine how to spend the large sums of money they received from the federal government’s American Rescue Plan.
The stimulus funds are intended to help local governments who suffered a loss of revenue, but eligible expenditures of the funds are limited.
President Joe Biden signed the American Rescue Plan Act in March, and it sent a total of $18.2 million to local governments in the area via the Rescue Plan and many local governments have received half of the sum. The government will deposit the balance next year.
Local leaders have struggled to find ways to invest the money because of restrictions on how it can be used.
The restrictions include paying down debt, paying down unfunded pension liability, street repairs, and wage increases.
Allowable investment includes fiber installation for high-speed internet, water and sewer system upgrades, and help replacing lost revenue from the COVID-19 pandemic, if a municipality can prove losses were COVID-19-related.
Local governments must spend the money by the end of 2024.
Alcona County will receive a touch over $2 million, over the next two years. Commissioner Adam Brege said the county already has $1 million in the bank.
Brege said the county put together a committee to come up with a list of projects by priority. When county officials learn more about spending restrictions, they will comb through it and choose from the eligible projects.
“We got this large sum of money and nobody seems to know how we can use it, and it’s frustrating,” Brege said.
Brege said county officials have tossed around ideas on how best to spend the money. He said the county would like to purchase a building it has leased for years, and an investment into more fiber could also fit the bill.
In a perfect world, some of the money could be used in the general fund, which has run between a $100,000 and $200,000 shortfall the last few years, Brege said.
Bolstering the general fund would allow money to flow where the county sees fit, and maybe add to savings.
Michigan Association of Counties Executive Director Steve Currie said counties that can prove lost revenue from the pandemic may be able to recapture it from the stimulus payment and put it into their general funds.
Once there, Currie said, local governments can use it however they choose. They can’t do that until the federal government signs off on the revenue loss and the reason for it, however.
Currie said there is a sense of frustration among counties, but he said the money doesn’t need to be spent right away. Being patient in the decision-making process will lead to better use of the funds, because MAC is working with state officials on programs that could stretch their money further, Currie said.
“They really need to slow-play this and be pragmatic,” Currie said. “We are working with the state to try to come up with a match program that would help counties get more for their money. Things are fluid right now, so taking your time is prudent.”
Some townships already have a game plan to use their money. Albert Township, in Montmorency County, will receive $251,100 and Supervisor Michael Runyan said improving the local water distribution system remains a high priority.
“We are looking to move our pumphouse to make a better water system,” Runyan said. “That will be one project toward the top of the list. We’re looking at some other things, too, but whatever we do, we want to use the money in ways that as many people as possible are impacted positively from it.”
Jen Fiedler is the communication director for the Michigan Townships Association. Like Currie, she said municipalities shouldn’t rush to spend the money just because they can. She said they should apply to accept the funds and then go into a holding pattern until they know the dos and don’ts for spending.
Fiedler said holding off on spending may benefit local governments. MTA is working with the government and that could lead to small changes to how the allocation may be utilized.
“They can worry about spending the money later, there is plenty of time for that,” Fiedler said. “Technically, we are still in the pandemic and its impact will be felt for years. If they can show and project the lost revenue from COVID-19, there will be a lot more options for them to consider.”