The American Rescue Plan Act will award Tompkins County with $20 million and the City of Ithaca with $17 million. But the question remains about how to spend it.
There are usage restrictions set forth by the federal government. The money can be used for directly responding to the public health emergency in the form of assistance to households, small businesses or impacted industries such as tourism, travel and hospitality; responding to workers performing essential work during the public health emergency by providing premium pay to eligible workers; providing government services to the extent of the reduction in revenue due to COVID-19; and making investments in water, sewer or broadband infrastructure.
According to Ryan Gregoir, the New York State Association of Counties’ legislative director, the county’s $20 million does not need to be spent until Dec. 31, 2026, but must be obligated by Dec. 21, 2024.
According to Gregoire, most counties have fixed their attention on the third and fourth categories — the reduction in revenue and infrastructure categories, respectively— but the third category is especially appealing.
“On number three, which is the reduction in revenue, a lot of counties are going this route, because it gives you the most flexibility and what you can use the funds for,” he said. “…The third category grants broad authority for government service delivery.”
Gregoire also shared that most counties to date have been looking to spend the funds on one-time spending opportunities such as capital infrastructure, and he cautioned the members about allocating the funds to investments that would require yearly spending.
“Many counties are looking at ways to make these investments as one-time investments because they don’t want to create recurring expenses after this year,” the director said. “…So that’s something that everyone’s keeping in the forefront of their minds throughout this process and one of the guiding principles that I’ve heard from across the state.”
Although he relayed that the categories for the use of ARPA funds are broad, Gregoire stressed the importance of being able to justify spending decisions in the county.
“When the federal government audits the county to determine if you use these funds in their eligible criteria, it’s really important to make sure that you have a document paper trail as to how you reach the conclusion that this was an eligible use,” he said. “You’re going to need that to back-up any questions that may arise from the federal government.”
According to Ithaca mayor Svante Myrick ’09, the city isn’t particularly focused on any one category when it comes to spending their $17 million. At least not yet. At this point Myrick has requested department heads, community partners and outside agencies to submit requests for the funds for consideration.
“There are no surprises here but it gives us the opportunity to take on water and sewer infrastructure,” he said. “There’s a lot of road repair work that needs to be done, and bridges as well. We think there may be ways to invest in economic development —more job creation and job training. And, to the degree that it’s allowed, we’d like to spend it on social services, like if we can help boost affordable housing by funding local nonprofit developers.”
Gregoire had outlined only water, sewer and broadband for infrastructure funding, but Myrick said that while water and sewer are particularly being stressed, the city is trying to see how broadly they can define infrastructure to include other things.
The county’s director of finance, Rick Snyder, ran through the county’s fund balance, which in total he estimated increased by about $1.7-2 million from Dec. 31, 2019 to Dec. 31, 2020. In his primarily optimistic assessment of the fund balance, he shared that the only fund that “took a hit” was the insurance reserve fund, which faced a decrease of about $270,000 and shows a restricted fund balance of $691,000.
His presentation continued on to sales tax projections for the county. Using 2019 — a pre-pandemic year — as a basis for comparison, he estimated a projected sales tax revenue budget 0.8% higher than that of 2019.
Committee chair member Deborah Dawson added to the cheery assessment of sales tax revenue when she broached that Cornell University and Ithaca College will be returning for in-person instruction, which will “probably be one of the biggest sources of sales tax.”
The meeting took a more pessimistic turn when Amie Hendrix reported on the county’s revenue losses in 2020, which according to her analysis totaled approximately $27 million. She explained that in order to have access to the ARPA funds, the county must show a revenue loss greater than or equal to the funds available from ARPA.
According to her calculation of $27 million of losses— in comparison to the $20 million conferred by ARPA— the county will be able to claim the ARPA funds. Despite the disheartening scale of the 2020 revenue loss, the promise of funds reassured the committee members.
“Even though that’s a really painful number, it does simplify our task when we figure out how to use our funds,” Dawson said. “It means that we can use the less restrictive category of government operations.”
After Hendrix discussed various compliance and reporting requirements and terms and conditions of the funds, the conversation turned to logistical concerns around the spending requirements. Many members of the committee pointed out that the county would need to use some of the funds to hire staff to support the level of auditing and reporting the use of ARPA funds necessitates.
Interim County Administrator Lisa Holmes presented a report to the committee, which listed potential projects that the county could fund through ARPA. Holmes categorized the spending possibilities into those that fall within the existing capital program, ongoing expense and one time needs for Reimagining Public Safety, and additional needs delineated by various departments throughout the county.
Once briefed on the myriad spending possibilities available to the county through ARPA, many members of the committee continued to express their support for spending the funds on one-time, more immediate expenditures.
“I think when we do the expenditures, I think we’re really going to kind of keep that in mind that people are watching this… and I think they kind of want us to spend it on stuff that directly impacts them — like right now, or at least as quickly as possible,” committee member Mike Sigler said.
Martha Robertson raised caution about longer term spending projects.
“The spending has to be completed by 2026, so knowing how long it might take to design, either a jail or an office building, and get it built and all the rest, 2026 may seem like a long time from now,” she said. “But we really have to be careful and map that out and see if that’s a realistic timeframe.
In past Council meetings, that same concern has been expressed by both Myrick and city controller Steve Thayer, who both believe they shouldn’t be spending one-time funds on recurring costs. For instance, Fire Chief Tom Parsons requested funding for a few positions within the Fire Department and suggested the funding come from the ARPA funds, but Thayer and Myrick countered that it would make more sense to come from recurring funding sources.
In terms of their timeline for spending the money, Myrick said he can’t say for sure until he receives all the different requests.
“I have no doubt that we could commit all the funding this fall, but it depends,” he said.
The county is taking a slightly different approach when it comes to prioritizing its options for spending the money. Instead of receiving requests from the county departments and community partners and agencies, they put out a survey for residents to take. The survey allowed people to rank the different spending categories by what was most important to them.
Dominick Recckio, Tompkins County communication director, delivered a report on the results of that survey. The survey, which was available from June 15- June 28 amassed almost 2,000 unique responses from across the county.
A main survey question of discussion focused on the top three suggested uses for the Tompkins County’s American Rescue Plan Funds. Out of the eight different response options, the majority of respondents favored the following three uses: responding to the needs of households that suffered as a result of COVID-19; helping small businesses and not-for-profits that lost income during the pandemic or are struggling to recover; and addressing public health, mental health and early and special education services needs.
Before the county’s June 30 Budget Committee meeting, the committee members had written statements with their proposed spending priorities as a baseline for the discussion. Although the agenda called for the reading of these pre-meeting statements, the committee decided to forego the exercise due to changing priorities resulting from the new information.
“I think we need this meeting — I needed this meeting,” Amanda Champion said. “I am blown away by all that [information]. So, my priorities have absolutely shifted my focus.”
Equipped with the new information about spending opportunities and public opinions towards the spending, the committee decided to craft amended legislator statements declaring their spending priorities. The members decided that a reassessment of their priorities would lead to a more productive discussion.
On the city’s side, there are no specific priorities, but Myrick said the high cost of housing, the need to repair infrastructure and the Green New Deal are things that are always on his mind.
“Any projects that hit on one, or two or all three would be what I’m looking for,” he said.
The county will continue its discussions on the funds at its July 19 meeting, while Myrick will propose the city’s uses for the funds at the Common Council meeting on Oct. 6.
Editor’s note: Tanner Harding is the managing editor of the Ithaca Times and does not work for The Sun.
This story was originally published by The Ithaca Times as a part of The Cornell Daily Sun Ithaca News Fellowship.