By the looks of things, the Phoenix suburb of Gilbert hasn’t done much with the $24 million it received in federal pandemic relief aid.
The site where most of the money will be spent on a crime victim center is still an empty piece of land, and only a quarter of the funds are earmarked for projects, according to the latest federal data. But city officials say contracts for the exploit of the rest should be in place soon.
Time is running out for Gilbert and thousands of other local governments across the U.S. to exploit their share of the $350 billion in Covid-19 relief funds approved by Congress and President Joe Biden in 2021. The governments must allocate all American Rescue Plan funds to designated projects by the end of this year or return the remainder to the U.S. Treasury.
According to the latest data reported to the Treasury Department by more than 26,500 local, state and territorial governments, about 80 percent of all funds had been committed as of March, putting us on track to finish on time.
But it seems that some governments have significantly more work ahead of them than others.
About one in five governments said they had allocated less than half of their funds by spring, according to an Associated Press analysis, and about 3,500 governments had allocated less than 25 percent. That includes 2,260 governments that reported no projects, so it’s unclear whether they even have plans for the funds. Some of them may have already used the funds but not told the federal government how they were being used.
The Treasury Department said it is conducting extensive outreach efforts to facilitate communities understand their reporting obligations.
The American Rescue Plan was criticized from the start by some Republicans and government watchdog groups for allowing unnecessary and excessive spending, including on things that have little to do with the coronavirus pandemic. But some state and local officials say the funds have allowed them to undertake long-planned projects they otherwise could not have afforded.
Gilbert authorities decided to allocate nearly all of the American Rescue Plan funds to a single project – a $43 million facility where victims of sexual assault, child abuse and domestic violence can undergo forensic examinations and interviews required for law enforcement, and also receive counseling and therapy services. Authorities recognized the need for the center several years before the pandemic, but had no source of funding. The federal money will cover just over half the cost, with the rest coming from Gilbert’s general funds.
The goal is to create a “comprehensive, wraparound center where victims of interpersonal violence can have a truly safe and healing experience,” said Deputy City Administrator Leah Rhineheimer. It is “one of the most meaningful projects the city could undertake.”
The city administration hopes to be able to award the construction contract this fall. This would meet the Ministry of Finance’s requirement to provide the money by the end of the year. Actual construction, however, would not begin until next year, said Gilbert Police Chief Michael Soelberg.
Under Treasury Department rules, a commitment generally requires a government to place an order for services or property, enter into a contract or provide a grant to another entity. Governments that meet the commitment deadline must then spend the funds within a second deadline of the end of 2026.
Other local officials interviewed by AP cited a range of reasons why they had not reported the exploit of much of their funds. Some said they did not feel the need to detail how the money was used because they viewed it as a replacement for local revenue lost during the economic downturn caused by the pandemic. Others described challenges in deciding what to do with it.
“There is no doubt that some of this money was not needed and is being spent wastefully,” said Tom Schatz, president of Citizens Against Government Waste, a nonprofit based in Washington, DC
The Detroit suburb of Dearborn Heights, which received more than $24 million, listed only one commitment in its spring Treasury Department report: about $79,000 for administrative expenses to select and implement the projects funded with federal aid.
Dearborn Heights Mayor Bill Bazzi said the federal funds arrived shortly after he took office, making it arduous to simultaneously “get a handle on the city’s needs” and assemble staff to manage it. The city plans to exploit the money for stormwater, sewer and water main projects, among others, and should have the bulk of it awarded soon, Bazzi said.
Progress was delayed because “we had to go through a lengthy process” before we could put projects out to tender, he said.
As the federal deadline approaches, some states and local governments are preparing contingency plans to ensure they spend all the money.
In the spring, Missouri informed the Treasury Department that it had already awarded 99 percent of its nearly $2.7 billion allocation. However, some projects have fallen through or are unlikely to require full funding.
So lawmakers and Republican Gov. Mike Parson approved a revised budget that cut $49 million from COVID-19 response and $16 million to convert an venerable mental health facility into a sex offender rehabilitation program. Those funds were reallocated to dozens of modern projects, including a building for an engineering college and a health worker training program.
The Missouri legislature also allocated $150 million from the American Rescue Plan for K-12 public schools as a stopgap measure if other projects do not move forward. Several lawmakers from the conservative Freedom Caucus voted against it, saying federal pandemic aid would escalate the national debt and inflation.
“I would be OK with giving it back,” Republican Senator Rick Brattin, chairman of the Freedom Caucus, told AP. “We could at least hold our heads high and say that we did not contribute further to the financial collapse of the American dollar.”
Missouri Senate Budget Committee Republican Chairman Lincoln Hough said lawmakers do not have to approve federal funding to exploit it anyway.
“If we have it, I think we should invest in our communities and in our future workforce,” Hough said.
Faced with the prospect that some of the $2.8 billion allocated to Connecticut from the American Rescue Plan could go unused, the state’s General Assembly this year reallocated $365 million for modern purposes. The law also established a contingency plan and directed Democratic Gov. Ned Lamont’s administration to reallocate any funds expected to no longer be needed after Oct. 15 and exploit them instead for budget deficits and higher education.
The city of New Orleans said it had allocated 55% of its $387.5 million federal grant by spring. But the exploit of the money moved quickly. By September, 86% had been allocated, said Gilbert Montano, New Orleans’ chief administrative officer. Over the summer, the City Council diverted pandemic relief funds from some projects that had timing issues and instead funded homeless shelters and the cleanup of illegal dumping sites. Other projects that have moved more slowly are on a watch list for possible reallocation before the end of the year.
“We will not give any of the money back,” Montano said. “There are too many needs.”
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Associated Press data journalist Kavish Harjai contributed to this report.
