With billions of federal stimulus dollars coming soon to Michigan communities, local government officials across the state are anxiously awaiting detailed spending guidelines from the U.S. Department of Treasury.
“There’s a lot of gray areas in the language of the law around eligible expenditures that we really want to make sure we understand upfront,” said Rebecca Fleury, city manager in Battle Creek, which could receive nearly $31 million, according to preliminary figures.
“Through the Michigan Municipal League and the National League of Cities, we’ve been gathering all questions and hope to get guidance from U.S. Treasury hopefully before the money comes, but at some point in the next 30 to 60 days.”
The American Rescue Plan Act signed by President Joe Biden broadly outlines ways the $350 billion in aid for state and local governments — including $10.3 billion coming to Michigan — can and cannot be spent.
Communities can use it for responding to the COVID-19 pandemic and addressing its negative economic impacts, providing premium pay for workers performing essential functions, providing government services affected by revenue reductions and investments in water, sewer and broadband internet infrastructure.
It can include assistance to households, small businesses and nonprofits; or aid to impacted industries such as tourism, travel and hospitality.
And the law is clear on two things the money cannot be used for: pensions and offsetting tax cuts.
But local officials in Michigan are still hoping for more guidance before they make spending decisions.
“We are still waiting on more clarification from the U.S. Treasury for exact uses and compliance expectations, which we hope to get before receiving the money in mid-May,” said Molly Clarin, chief financial officer for Grand Rapids.
“Once clarification is received, our administration will work with our City Commission to develop an overall spending plan which will be in line with the city’s strategic plan.”
Officials across the state say they’re grateful for the influx of federal aid — potentially over $94 million coming to Grand Rapids alone.
“Without it, we would be challenged to maintain the current level of city services, continue pandemic support and help local economic recovery efforts,” Clarin said.
Grand Rapids avoids potential layoffs, service cuts thanks to $94 million from the feds
In addition to $2.5 billion for Michigan cities and townships, preliminary figures show $1.9 billion for Michigan’s 83 counties and $5.9 billion for state government.
The U.S. Treasury has yet to make final calculations on how much will go to each community. See preliminary figures here.
“I’m told the money will come directly from the feds — and the guidance is the law at this point,” said Catherine McClary, Washtenaw County treasurer.
Preliminary figures show $71.3 million for Washtenaw County and $36.3 million for its cities and townships. That amount would be game-changing, McClary said.
“We have the opportunity for transformational change throughout all communities in Washtenaw County,” she said, indicating she’s urging county leaders to take a big-picture look at possibilities to make long-lasting changes that can benefit future generations.
McClary has talked with others about potential uses and some priorities include helping residents negatively impacted by the pandemic and mitigating poverty, she said.
Some ideas include bridge loans to help homeowners avoid tax foreclosure, creating a sustainable structure for poverty exemptions on property taxes and expanding affordable housing with a transitional program to move homeless residents out of shelter into supported housing. Still other ideas include expanding a housing rehabilitation and weatherization program that’s currently closed to new applicants to eliminate blight and stabilize neighborhoods and expanding equity programs and programs to mitigate the pandemic’s effects on mental health, McClary said.
Officials are now measuring ideas like those against the initial guidelines in the law.
Tens of millions of dollars in stimulus money expected to pour into Washtenaw County
Because the law specifies three types of infrastructure the money could be used for — water, sewer and broadband — some officials are assuming that means it cannot be used for other capital projects, like streets.
And though water and sewer infrastructure are among permitted uses, some wonder if that also covers stormwater projects.
Fleury wants clarification on “investments in water, sewer or broadband infrastructure,” as the law is worded.
“That little word ‘or’ is really important to us, because is that telling us that we have to choose one of those three? Or can we use it on each one of those things?” she asked.
Local governments will receive the first half of the money this May and the other half next year. They must provide reports to the Treasury Department accounting for use of the funds, which must be spent by the end of 2024.
“For Battle Creek, our No. 1 priority is that it can be used to replace lost revenue due to COVID,” Fleury said. “And for us being one of the 24 local income tax communities (in Michigan), that’s a big help for us, because we’re just starting to see the impacts of that.
Battle Creek, like many communities, also has seen hits to its public parking revenue amid the pandemic and it’s trying to quantify that, Fleury said.
Barriers block the upper floors of a parking garage in downtown Ann Arbor on March 26, 2021. Communities across Michigan have seen hits to their revenue during the COVID-19 pandemic, including parking revenue losses.
In Bay County, County Executive Jim Barcia said he was meeting Wednesday with leaders from the northern area of the county to discuss using stimulus funds to expand broadband internet services in rural areas like Pinconning.
The fact that only about 25% of families there had internet access posed a challenge for Pinconning’s school district when the pandemic hit, Barcia said.
“We’re anxious to see, with the guidelines, what role Bay County can play,” Barcia said, noting the county is expected to receive $20 million in stimulus funding, in addition to the money for cities and townships.
“We have some real needs and that money can be a lifeline to help us get back on our feet economically in Bay County,” he said.
Barcia is hopeful some of it can help the cash-strapped Pinconning area address some of its other challenges like aging water and sewer infrastructure.
“They’ve got a water tower that’s very old and condemned,” he said. “They’re financially pressed.”
The county’s civic arena also has taken a hit during the pandemic, Barcia said, pointing to that as another area stimulus funding could go to make up for lost revenue.
He also wants to channel “a nice percentage” of the money to Bay Future, the area’s public-private economic development organization, to help businesses, and some money could go to the county’s health department.
Barcia agrees the U.S. Treasury needs to do more to delineate what is acceptable and what isn’t acceptable spending.
A Treasury spokesperson did not respond to a request for comment.
Bay City could receive about $31 million, preliminary figures show. City officials are now talking through how that could be spent, Mayor Kathleen Newsham said, calling it the biggest windfall the city may see in her lifetime.
“It’s a lot of money and we want to spend it wisely or use it wisely, and we want to be able to fulfill a lot of projects that right now we can’t afford to do,” she said, indicating she also wants to use the money to give back to residents.
“There’s things I know we can do to help the residents out in their neighborhoods, so that’s one of my big ideas is to give back what we can to everyone in Bay City,” she said.
The stimulus funding is going to be great for the whole state, Newsham said.
“Everyone has gone through hell over the last year and some communities really were affected,” she said.
One big cost facing some communities is replacing lead water pipes, as mandated by the state. Bay City could put some of its funding toward that, Newsham said.
She has other ideas, but the city is still waiting on more guidance on what is and isn’t allowed, she said.
“That’s kind of where we’re at,” she said. “Staff has their suggestions and ideas of things that would be feasible for Bay City, but we’re still kind of waiting just a little bit longer to see exactly what we can do without any issues or without making a mistake and having to return funding. Until we get more information on it, it’s kind of a wait and see.”
MORE FROM MLIVE:
See how much your Michigan school district is getting from latest stimulus
Flint schools will receive $114M – or $36,000 per student – from COVID-19 relief bill
Tens of millions in coronavirus relief aid expected for Jackson County communities
DTE Energy pulls out of downtown Ann Arbor, leaving big void to fill on Main Street
University of Michigan regents call special meeting after Ron Weiser’s controversial comments