Editor’s note: This story is an excerpt of a Dayton Daily News investigation into some controversial local uses of American Rescue Plan Act funds. Go here to read the full story. For all of our reporting on COVID relief spending, visit the “Billions in COVID Aid: Where it’s Going” special section on our website.
More than 200 readers respondents to an online Dayton Daily News survey asking how federal COVID relief funds should be spent. The most popular uses were road and sidewalk repair (59.7% supported), water and sewer projects (51.5%) and blight removal (38.8%).
Common concerns among survey respondents was transparency and accountability with how the money is being spent.
Ohio Organizing Collaborative co-executive director Prentiss Haney said the most important thing is for local governments to listen to their constituents when spending this money. Under federal guidelines, ARPA funds must be allocated by the end of 2024 and fully spent by the end of 2026.
“Lots of municipalities have held onto ARPA funds in anticipation of a budget shortfall,” Haney said. “What this actually does for community members is we have to go back and advocate for those dollars because they are still there.”
“There’s no rule that local governments and municipalities have to do a certain number of (public) sessions and let community members weigh in on how the money should be spent,” he said. “This is paid for with taxpayer dollars (and) has to be accountable to the people.”
U.S. Department of Treasury rules give local governments broad leeway in spending American Rescue Plan funds, noting only a few specifically ineligible uses, such as:
— No payments for debt service and replenishments of rainy day funds
— No satisfaction of settlements and judgments
— No uses that violate conflict of interest requirements or federal, state or local law
The rules generally say uses have to support ARPA’s stated purpose of addressing the COVID pandemic, particularly in marginalized communities. Under the section on capital projects, it says Treasury presumes the following projects are ineligible;
— Construction of new correctional facilities as a response to an increase in rate of crime
— Construction of new congregate facilities to decrease spread of COVID-19 in the facility
— Construction of convention centers, stadiums, or other large capital projects intended for general economic development or to aid impacted industries
In the section of rules regarding negative economic impacts, it says: “Note that the final rule maintains that general infrastructure projects, including roads, streets, and surface transportation infrastructure, would generally not be eligible under this eligible use category, unless the project responded to a specific pandemic public health need or a specific negative economic impact.”
“Similarly, general economic development or workforce development – activities that do not respond to negative economic impacts of the pandemic but rather seek to more generally enhance the jurisdiction’s business climate – would generally not be eligible under this eligible use category.”