When Rhode Island cities and towns were awarded more than $500 million in COVID-19 relief money three years ago, it was a welcome infusion of cash.
Quickly, wish lists took shape. Warwick officials mulled using a portion of the city’s American Rescue Plan Act allotment to fix up a historic lighthouse the city owns. Johnston considered building a new public safety complex. And the Woonsocket mayor wanted to build a synthetic ice rink.
Now for some communities, the aid has become somewhat of a headache.
That’s because when the money was allocated, it came with guidelines on how it could be spent and stringent deadlines. The piles of money need to be “obligated” – meaning municipalities must place orders, enter into contracts or make qualified subawards – by Dec. 31, 2024, and the money must be completely spent by the end of 2026.
Some communities have decided how to spend their money and have obligated all of it well ahead of the deadline. For instance, Newport has obligated the $7.3 million it received on 17 projects as big as a sewer rehabilitation ($2.4 million) to as small as an appreciation event to thank volunteers at a COVID-19 vaccination clinic ($1,881).
But others have been struggling, in some cases bickering, as they decide how to spend the money as the deadline looms.
U.S. Department of Treasury data shows that in the three years since South Kingstown was allocated $9.1 million, it had only been able to obligate $1.82
million – or 20% – of the money as of March 31, the most recently available records on the Treasury’s online tracker. Town Manager James Manni did not respond to multiple requests for comment.
Still, South Kingstown has forged ahead, with the Town Council approving a $1.25 million grant program to help businesses with storefronts in several of the town’s village commercial districts to make improvements to their facades. But even that has had its problems – town officials have had to extend the program because of a lack of applicants.
“It has not been a lot of fun,” Town Council member Deborah D. Bergner said of the process.
And South Kingstown is not alone. Four other Rhode Island municipalities had obligated less than 30% of their ARPA Coronavirus Local Fiscal Recovery Funds over three years, as of March 31, with just months to go before the Dec. 31 deadline. And only seven had obligated all of their money.
It’s a situation that has David Kamper worried.
Kamper, the senior state policy coordinator at the Washington, D.C.–based Economic Policy Institute, fears that many local governments nationwide – and in Rhode Island – might have a rude awakening come Jan. 1.
Indeed, the federal government has warned that whatever money hasn’t been obligated by communities at the deadline will have to be returned.
Kamper acknowledges that the percentage of obligated money has almost certainly increased since March 31. But the updated numbers aren’t yet available, and what Kamper has seen nationwide hasn’t exactly inspired confidence.
He has witnessed many state and local officials who after three years are still confused about what the federal compliance steps involve.
In May, Connecticut lawmakers couldn’t get information on the amount of ARPA State and Local Fiscal Recovery Funds remaining from the state budget director, who told them, “I just don’t know.” Kamper says there have been cases of municipalities allocating millions of dollars to projects only to find out afterward that the projects were ineligible.
And because the money – totaling $350 billion nationwide – was a historic infusion straight into local coffers, there has also been heightened debate within city and town halls over what projects to fund, Kamper says.
“What you do see is a lot of lively disagreement,” he said. “It’s a paralysis of choice.”
MIXED RESULTS
It’s not like nothing has been done locally.
The Treasury’s online tracker shows numerous big-ticket projects that have gotten underway – and in some cases completed – in various Rhode Island cities and towns.
Among the biggest: Warwick expended $7 million of its $39.4 million allocation for a sewer construction project along Tidewater Drive in the Conimicut section of the city. Pawtucket spent $6 million of its $58.3 million in ARPA funds for an extensive renovation of a historic fire station in the Woodlawn neighborhood. And Providence used $4 million of its massive $166.3 million allotment to pay for an elaborate gateway at the Broad Street entrance to Roger Williams Park.
Federal government guidelines say uses for the Local Fiscal Recovery Funds can range from improving water, sewer and broadband infrastructure to supporting surface transportation projects and the construction of public facilities. Communities can also use it to respond to public health and economic effects of the pandemic. And they can replace public-sector revenue lost during the crisis.
Julia Bauer, program manager for research and data at the National League of Cities, says she’s generally not concerned about the rate at which communities nationwide are obligating and spending the recovery funds, although she acknowledges there has been some uncertainty amongst local officials about the process.
That’s why the league partnered with the Treasury for a webinar recently on the ARPA money for its members.
“We’re making sure communities meet the deadline,” Bauer said.
But, clearly, things have not gone smoothly everywhere. And it’s not necessarily the biggest expenditures that stir the most debate.
Former Woonsocket Mayor Lisa Baldelli-Hunt drew criticism when she planned to use $250,000 in ARPA money to build a synthetic ice rink that would allow for skating year-round. Activists and some city residents protested that the money should be deployed to help the homeless and invested in affordable housing.
After Baldelli-Hunt resigned suddenly in November, the project was canceled. In the meantime, the city used $150,000 in ARPA money to purchase a 45-foot bus that can provide up to 20 beds for homeless people. But the bus has sat unused since May 31 because of a lack of operating funds.
Woonsocket had only obligated $11 million of its $36.4 million ARPA allocation as of March 31. City Council President John Ward isn’t worried that the city will miss the deadline.
“I’m not too concerned about the numbers,” he said. “The contracts will be in place by the end of the year.”
That said, Ward has questions about some expenditures, including the $1.3 million that was used to buy an abandoned church property on Rathbun Street with an eye toward demolishing it for a public safety complex or community center.
The city is not proceeding with those plans and has put the property up for sale again.
“What happens to the money?” he said. “Do we now owe the federal government $1.3 million? I still haven’t gotten an answer.”
OFF TRACK?
State agencies haven’t exactly been able to keep a close eye on the situation, either.
Stephen E. Coleman Jr., chief of the R.I. Department of Revenue’s Division of Municipal Finance, says cities and towns are supposed to file annual reports documenting their Coronavirus Local Fiscal Recovery Fund activities.
But the division’s website shows that many haven’t complied. Of the 34 cities and towns that have posted traditional municipal audits with the state, only 22 submitted ARPA reports as of July 30, with many of the submissions being incomplete.
“We don’t have a sense of how far along in the process they are or whether they sufficiently followed the law,” Coleman said. “It’s between them and the federal government.”
Coleman believes part of the reason for the noncompliance is state legislation did not include any penalties. Meanwhile, he says his division has fielded questions from local residents and officials attempting to get information.
“There is no stick in the law,” he said. “One of the questions that has come up is whether or not they are even spending the money.”
Treasury data indicates that large amounts of the relief money have been set aside by some communities for “revenue replacement,” a category that allows for money to be spent on a wide variety of government services with eased ARPA reporting requirements.
For instance, Providence has allocated $56.2 million for “revenue replacement,” citing the loss of sales tax income during the pandemic. Warwick has obligated $29.5 million for revenue replacement, noting in its reporting that officials had used $3.4 million of it to balance the fiscal 2021 and 2022 city budgets.
And Cranston reported expending $19.4 million for “revenue replacement” without specifying in its report to Treasury how it was used.
The limited ability to easily track how revenue replacement money is being used is raising caution flags among some watchdog groups.
Michael DiBiase, CEO and president of the Rhode Island Public Expenditure Council, says most Rhode Island municipalities did not lose substantial revenue, and many of those needs were addressed through aid allocated to the state and through other federal grants authorized in COVID-19 relief legislation.
DiBiase said the significant discretion afforded municipalities is useful now that the public health crisis has abated and the money should be deployed for community needs such as housing, reducing food insecurity and increasing access to health care, not ongoing municipal expenditures.
“It would be advisable to invest in capital investments that would provide value in the long term,” he said.
Johnston, which limited its plan to several big-ticket items, including the construction of a 13,500-square-foot steel building to store the town’s vehicle fleet, had obligated 60% of its $4.52 million ARPA allocation as of March 31.
Mayor Joseph Polisena Jr. says the town has since obligated the rest of the money, including $346,373 for a children’s aquatic splash pad at Johnston War Memorial Park.
Polisena Jr. viewed aid as a cash injection that had little to do with providing relief.
“The federal guidelines are very generic,” he said. “I don’t think it had anything to do with rectifying anything with COVID. It was just money given to us by the federal government.”
And that may be a big part of the problem for municipalities that are lagging, according to Kamper.
“It’s rare to get money where the allowable uses are so broad,” he said. “And a lot of these local governments just aren’t used to that.”
It isn’t time for those communities to hit the panic button, Kamper says, but it’s getting close.
“They still have five months. If they get on the stick, they can get it done,” he said. “If we are at Halloween and they haven’t done this, they should be really nervous.”
[caption id="attachment_474460" align="aligncenter" width="1024"]
A DRIVER: Woonsocket City Council Vice President Valerie Gonzalez has been one of the most vocal supporters of the emergency shelter called the “Dignity Bus.”
PBN PHOTO/PAUL J. SPETRINI[/caption]
‘Dignity Bus’ on a circuitous route
THIS BUS in Woonsocket has had a rough ride.
Under former Mayor Lisa Baldelli-Hunt, the city purchased a 45-foot-long coach using $150,000 of its $36.4 million American Rescue Plan Act allotment. The plan: Use the vehicle – dubbed the “Dignity Bus” – as an emergency shelter that could provide beds for 20 homeless people at a time.
The used coach was delivered in July 2023 by the seller, a Christian outreach ministry based in Florida, and at the time, officials were confident that grants from the state or nonprofits could fund operating costs.
In December, the city finalized a six-month contract for the nonprofit Community Care Alliance to operate the bus, using $90,000 provided by the Rhode Island Foundation.
But no more funding became available, so the contract wasn’t renewed when it ended on May 31. The bus has sat dormant since then.
Council Vice President Valerie Gonzalez says the city is committing $40,000 to reopen the bus soon. At the same time, Woonsocket officials in July reduced the size of a planned road infrastructure project, giving the city more ARPA funding that could be committed to the Dignity Bus.
“It did not go exactly how we expected, but that doesn’t mean that it’s a failure,” she said.
– Christopher Allen
[caption id="attachment_474461" align="aligncenter" width="1024"]
FACELIFT? South Kingstown is offering grants of up to $100,000 for businesses to improve their storefronts, but there’s been a lack of applicants.
PBN PHOTO/ELIZABETH GRAHAM[/caption]
$1.25M grant program gets few takers
ON PAPER, South Kingstown’s $1.25 million facade improvement program seemed like a great way to spend some of the $9.1 million American Rescue Plan Act fund it received three years ago.
The problem is nobody seems to be interested.
The grant program allows business owners to apply for matching grants to improve storefronts along commercial corridors in the villages of Wakefield and Peace Dale, with grants up to $100,000.
However, the facade improvement program has since been extended three times for lack of applicants.
Town Councilor Deborah Bergner was skeptical from the start and voted against the $492,800 contract awarded to Massachusetts-based consulting firm Weston & Sampson to help with revitalization plans. “They had some grand and impractical ideas,” she said. “None of them were realistic.”
Bergner feels the economic conditions such as inflation and the modern hurdles facing the traditional storefront businesses have made local operators hesitant to shell out thousands of dollars for aesthetic upgrades.
Bergner isn’t concerned about the town’s ability to obligate its remaining money before the Dec. 31 deadline.
“Knowing what I know now, I would have done a few things differently,” she said. “But I’m not worried about us missing the deadline.”
– Christopher Allen
[caption id="attachment_474462" align="aligncenter" width="1024"]
MAKING A SPLASH: Cranston Mayor Kenneth J. Hopkins’ initial proposal for the closed Budlong Pool drew opposition. He revised the plans, and now the reconstruction is due to be finished in 2025.
PBN PHOTO/MICHAEL SALERNO[/caption]
Pool restoration finally proceeds
THE CITY of Cranston is moving ahead with a more than $4 million restoration of the Budlong Pool after more than a year of conflict over the future of the historic complex.
The 84-year-old pool, one of over 1,000 built by the Works Progress Administration, has been shuttered since the pandemic in 2020 and has fallen into disrepair.
Mayor Kenneth Hopkins initially proposed a smaller and less expensive pool to replace Budlong, which drew criticism from some quarters.
About 2,000 signatures were collected for a petition seeking to have the pool size remain the same, and the City Council passed a resolution urging Hopkins to build the pool as large as possible.
A reworked plan includes an 8,000-square-foot pool that is fully handicapped accessible with a “beach approach.” In July, the city approved a contract to rebuild the pool and bathhouse by mid-2025.
The city will use $4 million from its $42.6 million American Rescue Plan Act allocation for the work. Another $750,000 will be provided by a congressional grant.
Now Hopkins is in another faceoff with the council that he says threatens over $2.23 million in ARPA funding. The deadline to obligate the COVID-19 aid is looming.
“I am a little concerned about that,” Hopkins said.
– Christopher Allen
[caption id="attachment_474463" align="aligncenter" width="1024"]
LEGAL EAGLE: Noah Aurelio, a pro-bono attorney at the Rhode Island Center for Justice, has been representing tenants who face eviction at Providence’s Housing Court.
PBN PHOTO/MICHAEL SALERNO[/caption]
Providing tenants backup in court
PART OF PROVIDENCE’S $166 million in American Rescue Plan Act funding is giving outgunned tenants facing eviction a fighting chance in court.
On July 1, the city approved a one-year extension to the previously awarded contract to the nonprofit The Rhode Island Legal Services Inc. to assist residents facing eviction in city’s Housing Court.
Put into place in an ARPA plan crafted under former Mayor Jorge O. Elorza, the eviction defense fund was allocated $1.2 million, beginning with a one-year $600,000 contract to RILS in 2023.
The program is open to residents who earn 65% or less of the area median income or who live in a qualified census tract, providing tenants with attorneys and assistance from law students.
RILS did not respond to requests for comment or to provide data on how many clients have received assistance; however, a letter in the bid proposal said the group helped over 3,000 residents in the first year.
The renewal request included a budget that shows $250,000 for salaries and benefits to five staffers. The R.I. Center for Justice was allocated $275,000 as a subcontractor. Executive Director Jennifer Wood said the funding, while welcomed, isn’t enough.
“It’s really about what happens when there is no more ARPA money for this,” she said.
– Christopher Allen
