The first round of much-anticipated ARPA funding has been released to States. Localities are pushing to spend this one-time cash infusion for the good of their communities before time’s up. It seems that many municipalities have a prioritized list of projects, previously identified, which also meet the requirements for this funding. But that is not necessarily the case for every community.

This funding presents a unique opportunity to finance projects in a “one-off” manner. Projects that can receive funding and grants through other types of programs may not be the best place for communities to spend. Prior to encumbering the funds, towns, villages, communities, municipalities, and counties may want to assess a host of considerations.

Before looking at how to use the funding within its tight timeframe to address the needs of individual communities, a quick review the structure of the American Rescue Plan Act is warranted.

A Short Background

In March of 2021, President Biden signed the $1.9 trillion American Rescue Plan Act (ARPA), which included $350 billion in additional funding for programs that include the “The Coronavirus State and Local Fiscal Recovery Funds” (Recovery Fund) and the “Coronavirus Capital Projects Fund”. On January 6^th of this year, the U.S. Department of Treasury released the draft Final Rule, an overview document of how the Recovery Fund could be spent. This was adopted by the Treasury in April.

The Recovery Fund provides $195 Billion dollars to ensure governments have the resources needed to:

• Battle the pandemic and help families and businesses suffering from public health and economic implications;
• Maintain important public services despite declining income; and
• Encourage a strong economic response in an equitable manner with investments that reinforce long-term growth and opportunity.

The $195 Billion includes a local funding portion of $130 Billion and a County Portion of $65 Billion.  The local portion is to be divided between cities and counties. The program established two rounds of funding releases through an application process.

The ARPA also provides $10 billion for the Coronavirus Capital Projects Fund. This fund allocates monies to address certain societal challenges that were exposed by the pandemic by particular communities.  As many may recall, fractures in the fabric of our modern amenities were exposed. Urban, rural and Tribal children of school ages struggled to receive virtual classroom instruction. The fund is therefore targeted at rural, Tribal, and low-to-moderate-income communities for increased access to the modern infrastructure needed to deliver vital services during a shut-down, such as the expansion of broadband.

Other ARPA programs include: the Homeowner Assistance Fund, Emergency Rental Assistance Program, and the State Small Business Credit Initiative.

Spending and ARPA Funding

Spending of the Recovery Fund is determined at the state level. According to National Conference of State Legislatures (NCLS), “The authority is largely determined by each state’s interpretation of its constitutional and statutory provisions outlining authority over unanticipated federal funds and authority to spend during a state of emergency.”

While the ARPA Recovery Fund program is based around four eligible use of funds categories, this legislation also left the interpretation of the Big Four Fund usage to be somewhat flexible.

The Big Four:

1. COVID-19 expenditures or negative impacts of COVID-19
2. Replacement of lost revenue for the provision of government services
3. Premium pay for essential workers
4. Investment in water, sewer and broadband infrastructure

In terms of the built environment, examples of approved project types approved under the first eligible use (negative impacts of COVID-19) might include projects to:

• Revitalize parks and public spaces
• Enhance outdoor spaces for COVID-19 mitigation such as constructing restaurant patios
• Community development and neighborhood revitalization activities such as improvements to the built environment of the neighborhood
• Build certain affordable housing, childcare facilities, schools, hospitals, emergency service facilities, maintenance facilities, and other projects
• Community development and neighborhood revitalization activities eligible for disproportionately impacted communities

Localities may use the lost revenue provision (eligible use two above) to provide traditional government services. These may include maintenance and upgrades to roads; cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; construction of schools and hospitals; and the provision of police, fire, and other public safety services. This list is not exclusive, but there are restrictions.

Here’s the kicker: the funds of both disbursements must be fully allocated by December 31, 2024 and spent by December 31, 2026. In terms of construction spending, this is a tight timeframe. Now is the time to decide how to best utilize available funding consistent with ARPA requirements. This can be done by planning and performing needs assessment of your assets and performing “due diligence” before obligating and spending incoming funds.

Make Your Plan and Take Action!

Local governments can start the process by identifying their greatest needs. Assessments of current available services, facilities, grounds and infrastructure are critical. An internal needs conversation with local government officials and municipal departments is a recommended first step. The development of an action plan ensuing from this needs assessment, is a strong decision-making tool. This is an opportune time to define issues, identify shortfalls, deliver valuable services, and execute worthy projects that will meet long-term needs. Towns, villages, and municipalities should work closely with their legal team to understand eligible uses and restrictions.

Think Outside the Box!

Consider utilizing ARPA funds on more unique projects that are less likely to be available in future grant rounds. Investments in municipal facilities, amenities, and infrastructure are particularly well-suited uses of ARPA funds as non-recurring costs that can be targeted to improve long-term assets and provide community-based benefits over many years.

Facility Assessments

Local governments have the responsibility to operate and manage many types of facilities from which to conduct the business of government and support community activities. Decisions on how to best utilize and maintain municipal-owned facilities are a common and ongoing subject for local leaders.

Sometimes, municipalities delay, or altogether avoid, assessing their facilities. This may simply be rooted in a fear of knowing the financial implications, or not having any funding with which to perform assessments. Dismissing this unique opportunity might be kicking the can down the road. Municipal facilities that are not properly maintained, repaired when needed, or replaced at the end of their serviceable life can become a liability and potentially unsafe for their residents and staff.

Now is the time to retain professionals to perform comprehensive assessments and feasibility studies. Once these deliverables are received, the issues and their associated costs can be evaluated, corrections can be prioritized, and appropriate actions can be offered.

A Case Study

Highway Department facilities are a municipal building type that are often too long neglected. Many highway garages were built decades ago when highway trucks and equipment were much smaller in size and far less expensive than today’s equivalents. Poor light quality, lack of proper ventilation, and unsafe working conditions are other common liabilities. In many cases, the replacement costs of the stored highway vehicles and equipment are greater than the value of the aged structure that physically houses them.

After years of discussion, the Town of Lansing, NY allocated resources to improve their current highway garage facility. The primary structure for vehicle storage, maintenance, and operations was approximately 50 years old and had various levels of disrepair. The Town’s Highway Department had clearly outgrown the capacity for office space, vehicle storage and maintenance, locker rooms, break room, and cold storage. It was also determined other deficiencies were evident including the lack of proper ventilation, ADA accessibility, and elevated ongoing maintenance costs of building rehabilitation.

In response, they engaged Bergmann with the Town and Highway Department by offering an assessment and feasibility study phase. This enabled the Town of Lansing to allocate only a small portion of the fee to adequately review the existing conditions. In the study, the actual programmatic needs, the capacity of the existing structure to accommodate improvements, conceptualized design options, estimated costs, and best value for the Town were determined.

The assessment also uncovered several hidden costs, such as the need for utilities extensions, required earthwork for sufficient site circulation, and compatibility with adjacent functions. From the valuable insight gained through the assessment and feasibility study process, various design schemes were then developed to meet the Town’s long-term needs.

The Town now has a comprehensive understanding of what will be required to achieve long-term project success and can better prepare for the next phases of work. The assessment and feasibility study phase helped identify general needs, project clarity and provide justification for a project that will ultimately utilize taxpayer funding.

The “How-To” Short List: Recommendations for Planning to Spend

• Request and receive assessments, reports, studies, and recommendations prior to commencement of utilizing funds. Being better informed will help in making decisions that will impact communities for dozens of years and potentially longer.
• If you act now, local governments have time to engage the public and be transparent about the expenditure of ARPA funds.
• Retain professionals who can assist with prioritizing needs and have the insight to plan and design as well as execute projects within the allocated ARPA timeline.

Don’t Go it Alone

It’s inherent that cities, towns, villages, and municipalities have key personnel who are elected to their positions and may only have a few years to make meaningful impacts on their communities. While local governments are encouraged to consult with their legal team and financial officers on spending sums of money received under ARPA, consistency from one administration to the next needs to be maintained. Architects and engineers who are municipal specialists and commonly engage with local governments on an array of projects are the perfect choice with which to partner and connect the dots. These professionals are poised to form ongoing relationships with municipalities to continue moving projects forward as key local government personnel change over time.

Conclusion

ARPA funding is affording municipalities the opportunity to take a different look at the condition of the physical structures that house their essential services. You still have time to perform studies, make assessments, engage the community, and think strategically. Talking to experts who can help you navigate how these funds can facilitate the capital improvements process can prepare you to hit the ground running once the funds become available.  In the end, this may save you time, effort, and the resources to properly support your community!

Bio for Marie Carone, AIA and Scott Bova, AIA, Principal Architect

Communities across New York have an opportunity to transform efforts related to pandemic recovery through American Rescue Plan Act (ARPA) funding, but many need support to develop an effective plan. The article “Making the Most of the ARPA Funds”, was authored by Marie Carone, AIA, Government Practice Leader and Scott Bova, AIA, Principal Architect from Bergmann.