Dollars and sense; spending the American Rescue Plan (ARPA) funds

Any money remaining by December 31, 2026 shall be returned to the U.S. Treasury.

Dollars and sense; spending the American Rescue Plan (ARPA) funds

The American Rescue Plan Act of March 2021 allocated $76 million to Vermont’s town governments. In July 2021, thanks to the advocacy of then-senator Patrick Leahey, an additional $120 million, originally targeted to the small budgets of county government, was redirected to cities and towns. The total sum was divided among all the Vermont towns in proportion to their population with the exception of Burlington. Thus, in July of 2022, it was announced that Thetford was the recipient of $756,581.75 in American Rescue Plan Act (ARPA) funds.

This money, of course, did not come without some strings attached by the US Treasury. Towns cannot directly spend ARPA funds on “extraordinary” deposits into pension funds, nor can they directly put it into rainy day funds, reserve funds, or use it to pay off outstanding debts or legal settlements.

The money can be spent under seven categories:

(1) Public Health: COVID mitigation and prevention

(2) Assistance to negatively impacted businesses, industries, non-profits, households etc.

(3) Reviving the Public Health Sector capacity (rehiring, payroll, administration etc)

(4)“Premium Pay” to public sector employees

(5) Infrastructure (water, sewer, broadband “last mile” projects, improvements to town buildings, etc.)

(6) Revenue replacement: provision of government services, matching funds for other federal programs like water and sewer, broadband, roads and bridges, EV charging stations

(7) Administrative expenses.

These are broad categories. The Vermont League of Cities and Towns (VLCT) offered guidelines to focus ideas. They advised that towns consider projects that would contribute to long-term growth and opportunity, help the town to comply with the Town Plan, assist a capital improvement plan, and/or leverage other grant funds.  

After inquiries from many municipalities, VLCT added investing to improve municipal administrative operations such as cybersecurity, hybrid meeting equipment, connecting public buildings to broadband, digitizing land records, and capital improvements to town buildings like ventilation, energy, and fire safety; bike and pedestrian safety; measures to support housing development; recreation spaces; community gathering spaces; and supporting local non-profits.

They advised against projects that would create an ongoing unfunded expense, duplicate a benefit that is available through an existing program (e.g. homeowner assistance, affordable broadband connectivity, community development grants), or set a precedent that would be difficult for others to fulfill in the future.

While Thetford has adopted the Town Manager form of government, the actual spending of the ARPA funds remains under Selectboard authority. The Town Manager has significant powers “to perform duties conferred by statute upon the Selectboard" (24 V.S.A. 1236(2)); however, the law does not give the manager the ability “to sign orders on the general fund of the town.” It is the manager’s responsibility to “do all the accounting for all the departments of the town” and to “supervise and expend all special appropriations of the town.”

In September the Selectboard, in a 4-1 vote, approved spending some ARPA money to upgrade the aging HVAC system at Town Hall to a state-of the-art, energy efficient and low carbon emission system. This amounted to $257,133, which left $499,448.75 to spend on other projects.

Gathering the opinions of residents is recommended; thus VLCT encouraged towns to send out surveys for this purpose. The Selectboard designed Thetford’s survey, based around VLCT’s recommendations. It asked residents how strongly or not they supported 16 different categories of projects, and then asked them to rank their top three projects from the same list.

Out of the 359 respondents, 43.3% ranked “Help create new affordable housing” as the #1 priority. This is understandable in light of the severe shortage of workforce housing. Another 33.4% of respondents gave “Improve water and sewer in the five villages” as their top choice, and “Offset the costs of road or bridge improvements” was the favorite of 28.8% of respondents, only slightly higher than the 27.51% who supported “Repair, renovate or replace the town garage.”  

However, spending a once-in-a-lifetime windfall should be very carefully considered. Regarding housing,  a shovel-ready project doesn’t exist in town, there are no designs, no engineering studies, and no land.  The best the town could do would be to leverage funding for a project, but there are none on the horizon.

Likewise, funds could be leveraged for a water project in one of the villages. In fact, village water systems are the subject of a municipal planning grant study, though it is not complete and there are no recommendations yet. Stay tuned.

More than one selectboard member has thought that the money should go where it can make the most impact for the number of dollars spent. Certainly, putting the money into road and bridge improvements would positively impact the greatest number of people. In general, the condition of the town’s paved roads is below average. In particular, the 2022 Town Road Survey by Stantec Engineering identified 2.24 miles on Tucker Hill road and 1.2 miles on Godfrey Road as needing full roadway reconstruction, and 1.9 miles on Gove Hill Road as needing rehabilitation. The ARPA funds could provide a match for a road grant.

The Town Garage is the center of operations of the Department of Public Works (DPW) and indirectly affects most townspeople. There is a long list of problems that hamper the efficiency of the DPW, including a non-compliant building too small to provide efficient work space for repairs, a lack of storage, no space for welding, mold and a leaking roof, costly equipment stored outside for lack of room, no basic staff facilities such as lockers or a small kitchen and eating area. Sporadic searches for land on which to build a new facility (a very costly proposition) have not yielded results.

Improving facilities at Treasure Island (top for 24.6% of respondents) or repairing the historic Timothy Frost Building (20.6%) are yet more options to mull over, and so on down the list.

The Selectboard has time to mull, but not too long. The funds must be obligated by December 31, 2024, meaning projects scoped and fleshed out and money committed. Everything must be spent by December 31, 2026. Any money remaining at that time shall be returned to the U.S. Treasury.

Photo credit: Li Shen

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