It looks like the Phoenix suburb of Gilbert hasn’t done too much with the $24 million it received in federal pandemic aid.
The site where it plans to use most of the money for a crime victims center remains an empty lot. And only a quarter of its funds are tied up in projects, according to the most recent federal data. But city officials say the contracts should be in place soon after the remaining portion is used.
For Gilbert and thousands of other local governments across the U.S., the clock is ticking to use their share of the $350 billion in COVID-19 relief funds approved by Congress and President Joe Biden in 2021. Governments must commit all of their American Rescue Plan funds to specific projects by the end of this year or return the rest to the U.S. Treasury Department .
According to the latest data reported by more than 26,500 local, state and territory governments to the Treasury, about 80% of all funds had been debited by March. That’s the right pace to get it done on time.
But some governments seem to have a lot more work to do than others.
According to an Associated Press analysis, about one in five governments said they had obligated less than half of their funds this spring, and about 3,500 had obligated less than 25 percent. This includes 2,260 governments that did not report projects, leaving it unclear whether they had plans for the money. Some of them may have already spent the money but did not tell the purpose to the federal government.
The Department of Finance said it would provide extensive assistance to help communities understand their reporting requirements.
Some Republicans and government watchdog groups criticized the American bailout plan from the start for allowing unnecessary and excessive spending, including on things barely related to the coronavirus pandemic. But some state and local officials say the funding has allowed them to pursue long-sought projects they otherwise wouldn’t have been able to afford.
Gilbert officials decided to devote almost all of their American Rescue Plan funds to one project — a $43 million facility where victims of sexual assault, child abuse and domestic violence can undergo forensic exams and interviews needed for prosecution, while also receiving counseling and therapy services. Officials recognized the need for the center several years before the pandemic, but it had no source of funding. Federal money covers just over half the cost, with the rest coming from Gilbert’s general fund.
The goal is to provide a “comprehensive wrap-around center where a victim of interpersonal violence can come and experience a truly safe and healing journey,” Deputy City Manager Leah Rhineheimer said. It is “one of the most meaningful projects that a city can implement.”
City officials hope to win a construction contract this fall — a step that would meet the Treasury Department’s requirement to obligate the money by the end of the year — even if actual construction doesn’t begin until next year, Gilbert Police Chief Michael Soelberg said.
According to the rules of the Ministry of Finance, the obligation usually requires that the government orders services or assets, enters into a contract or grants a grant to another entity. Governments that meet the mandatory deadline will then have another deadline to use the funds by the end of 2026.
Other local officials interviewed by the AP described several reasons why they had not announced that they had committed much of their funds. Some said they didn’t think it was necessary to detail how the money was spent, classifying it as replacing local revenue lost during the pandemic’s economic downturn. Others described the challenges of figuring out what to do with it.
“There is no question that some of this money was not needed and is being wasted,” said Tom Schatz, president of Citizens Against Government Waste, a Washington, D.C.-based nonprofit group.
The Detroit suburb of Dearborn Heights, which received more than $24 million, listed only one obligation in its spring Treasury report — about $79,000 for administrative costs to select and implement federally funded projects.
Dearborn Heights Mayor Bill Bazzi said federal funding arrived soon after he took office, making it challenging to simultaneously “get a sense of what the city needs” and assemble the staff to manage it. The city plans to use the money for stormwater, sewer and water main projects, among other things, and most of them should be mandated soon, Bazzi said.
Progress was delayed because “we had to go through a tedious process” before the projects were put out to bid, he said.
As the federal deadline nears, some states and local governments are making contingency plans to make sure they use all the money.
This spring, Missouri told the Treasury Department it had committed 99 percent of its nearly $2.7 billion allocation. However, some projects have failed or are unlikely to need full funding.
So lawmakers and Republican Gov. Mike Parson approved a revised spending plan that eliminated, among other things, $49 million for COVID-19 efforts and $16 million to renovate an old mental health facility for use in a sex offender rehabilitation program. Those funds were reallocated to dozens of new projects, including a college engineering building and a health worker training program.
The Missouri legislature also budgeted $150 million in American Rescue Plan funds for elementary schools as a backup option if other projects don’t get off the ground. Several lawmakers from the conservative Freedom Caucus voted no, suggesting that federal pandemic aid was driving up the federal debt and inflation.
“I’m fine if we give it back,” Republican Sen. Rick Brattin, chairman of the Freedom Caucus, told the AP. “At least we can hold our heads high and say that we did not continue to contribute to the financial collapse of the US dollar.”
Republican Lincoln Hough, chairman of the Missouri Senate Appropriations Committee, said lawmakers don’t have to approve the federal funding to use it anyway.
“Once we have that, I think we should invest in our communities and our future workforce,” Hough said.
With some of Connecticut’s $2.8 billion American Rescue Plan appropriation at risk of going unused, the state Assembly this year appropriated $365 million for new purposes. The legislation also laid out a backup plan that directs the administration of Democratic Gov. Ned Lamont to reallocate any funds that are unlikely to be obligated on Oct. 15 to go instead to budget deficits and higher education.
The city of New Orleans announced it has obligated 55 percent of its $387.5 million in federal funds this spring. But the use of the money has progressed rapidly. Since September, 86 percent have been mandated, New Orleans Administrator Gilbert Montano said. During the summer, the city council transferred pandemic aid funds from a project that raised a couple of timing questions to financing homeless shelters and cleaning up illegal landfills. Other slower-moving projects are on the watch list for possible realignments before the end of the year.
“We’re not going to give any of that money back,” Montano said. “There are too many needs.”
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Associated Press data reporter Kavish Harjai contributed to this report.
