WEST MICHIGAN — Local officials are trying to determine how to best use millions of dollars in federal stimulus funds.
The U.S. Treasury unveiled last week final guidelines and allocations for the $350 billion it will provide to eligible state, local, territorial, and tribal governments through the American Rescue Plan Act (ARPA). Its purpose is to assist in the economic recovery from the COVID-19 pandemic.
Under ARPA, Michigan is set to receive $6.5 billion, with its counties and cities receiving separate amounts.
In West Michigan, its projected $431 million will be designated to counties in West Michigan and $255 million to 13 cities.
The money can be spent through 2024 and must fall into eligible use categories, which include support public health expenditures, addressing negative economic impacts cause by the pandemic, replacing lost public sector revenue, providing hazard pay to essential workers, and investing in water, sewer, and broadband infrastructure.
How local communities plan to use the dollars:
“We’re not going to invest this money just to fill up our bank account,” said Frank Peterson, Muskegon city manager. “We’re going to slowly take what we need.”
Under the plan, Muskegon will receive nearly $23 million.
Peterson says because the pandemic leveled off the city’s projected growth, possibly affecting upwards of $6 million in income tax revenue over the next few years, he believes a portion of their funding will likely be used to supplant the loss.
More immediately, he anticipates dollars being spent on parks, noting people’s reliance on them as a safe place to escape during the pandemic, and the area’s tourism and hospitality industry was hit hard over the last year.
“What can we do to make sure that when there is a rebound, that it’s a big rebound?” asked Peterson. “We want to look at things like, ‘Okay what’s missing at the convention center? What’s missing downtown? What’s missing on the lakeshore? How do we use those things, how do we make long-term investments in those things?’”
Troy Bell, Muskegon Heights’ city manager, envisions investing their $10.6 million in child care and education, saying the pandemic highlighted a need for it.
“If we’re thinking progressively, we understand that those two issues are very critical issues for distressed communities,” said Bell. “All the data says there are so many quality of life factors that are connected to child care and to education… i.e., property values, involvement in… civic engagement.”
Bell says he’s talking thinking regionally as well, talking to partners in nearby cities and the county to see how they can work together. He thinks it could address systemic issues discussed over the past year especially that communities of color often face.
“I think this is a once in a lifetime opportunity for us to come together and maximize the use of these funds,” said Bell. “By working together, it has a multiplicative effect, as opposed to everybody going to their corners and just doing what they're doing, because they can.”
Like Muskegon, the city of Holland plans to backfill some of the costs incurred because of COVID-19.
Just last week, the city council adopted a budget in which roughly $250,000 in reserves had to be used in order to keep it balanced, said Keith Van Beek, city manager. He lists that as one of the ways the city is considering using its $8.4 million.
“We want to be very intentional and strategic with this money,” said Van Beek.
Investing in things the city wants to happen in the community that would offer a wide benefit, but may not happen if not for the ARPA funds is another priority, Van Beek said. For example, he says, expanding broadband services. Conversations have been ongoing on how to expand it in the city, but Van Beek says this could push the discussions.
“Here in the city, we think that these are dollars that really positions ourself to do an even better job of providing services and opportunity for our residents,” said Van Beek. “We take a look at it as a really great opportunity to make sure that our residents have a very high quality of life but also have access to the different things to really be successful.”
In response to a request from FOX 17, the city of Kentwood said it has not yet made any determinations on how the money will be spent.
“The City has just recently received the updated allocation numbers and guidelines on how this emergency funding could be spent,” said Kentwood Mayor Stephen Kepley in a statement. “We are being thoughtful in reviewing this new information in order to come up with a plan, which will be brought to City Commission before being finalized.”
Wyoming also has not figured how to spend its money.
“The City of Wyoming is reviewing the new American Rescue Plan guidelines and will continue to be deliberate and collaborative in deciding how to best use this funding in ways that are impactful and have long-term benefit for our community,” said Wyoming City Manager Curtis Holt in a statement. “To maximize the impact, we are working with a multitude of partners to explore ways to leverage and amplify this funding with other available resources. Staff plan to bring recommendations to the City Council for discussion and direction on the proposed use of this funding at a public meeting in the coming months."
The city of Grand Rapids laid out some of its plans for its $92 million while presenting the city’s upcoming budget earlier this spring.
READ MORE: Grand Rapids proposed budget shortfalls offset by American Rescue Plan
“Unprecedented opportunity,” Michigan expert says
Experts say strategic, collaborative plans are how the funds should be used.
“We’re still a state where we’re not where we need to be in many ways,” said Eric Scorsone, director of the Center for Local Government Finance and Policy at Michigan State University.
Scorsone advises communities across the state, country and globally on how to manage their money, helping dozens of them each year.
According to Scorsone, the state’s population and economic growth is lagging, resulting in consequences, like losing representation in Congress. He says the broad definitions outlined under the eligible use categories could allow communities to spend the money creatively, allowing for the needed change within the state.
“It really is an unprecedented opportunity for us to invest monies in some really critical areas,” said Scorsone. “We got to use this money wisely, even if it’s a tenuous connection to COVID. People need to be thinking.”
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