How ARPA Funds Get to Local Governments in Western North Carolina

As with many aspects of the COVID-19 pandemic, the American Rescue Plan Act of 2021, legislation providing recovery funds to local governments, is complicated.

Since every county in North Carolina — and many cities and towns — has received or will receive ARPA funds, Carolina Public Press takes a look at how and where many are allocating and spending the money. This article is the first in a year-long project that will put ARPA funds in 18 western North Carolina counties under the microscope.

Much of the information here, however, will also be applicable statewide.

Federal lawmakers crafted ARPA, signed into law on March 11, 2021, with the goal of lifting the country out of the economic distress caused by the pandemic by improving the country’s infrastructure and providing direct financial assistance to families.

While the $1.9 trillion plan funded a third round of stimulus checks and several other tax relief programs, Congress earmarked the majority of ARPA funds — $401 billion — to governments of the State, local and tribal, according to the US Treasury Department.

“The state and local program was designed for short- and long-term recovery support, including helping localities as new variants of COVID emerge,” said U.S. Treasury spokeswoman Dayanara Ramirez.

North Carolina is expected to receive $8.6 billion in ARPA funding, which is disbursed in two ways.

“There are two pots of money,” said Jamilla Hawkins, chief of staff for the NC Pandemic Recovery Office. “North Carolina as a state received $5.4 billion for the state fiscal recovery. For local governments, there is a local tax recovery.

The $5.4 billion referenced by Hawkins has yet to be distributed, as it is part of the fiscal year 2022-23 budget, which is still awaiting certification from the State’s Office of Budget and Management. North Carolina.

OSBM’s ongoing budget certification process includes reviewing the individual budget plans of each program to which legislators have allocated funds. Those plans were due Dec. 15, and Hawkins said it usually takes a few weeks for the OSBM to be certified.

When the budget is certified, the state will distribute funds to state departments and organizations in accordance with Governor Roy Cooper’s recommendations for the money, which include expanding broadband access, addressing infrastructure and addressing housing and employment deficits.

The US Treasury Department distributed the other tranche of North Carolina’s ARPA funds — $3.2 billion — directly to North Carolina’s 100 counties and 26 most populous cities.

The Treasury disbursed half of this money from May 2021. The other half comes 12 months after the first disbursement.

The amount of ARPA that counties received depended on population, according to a formula established by the Treasury Department, but was also adjusted for other funding that each community received.

The city allocation formula took into account not only population, but also population growth, the number of people living in poverty, and housing-related variables.

County and city government officials will allocate the funds in their communities. All ARPA funds must be spent by December 31, 2026.

“I think people are really taking their time,” Hawkins said.

“With this funding, you can kind of stop and take your time and really think long-term about how you’re going to impact your county.”

The federal government has rigid guidelines on ARPA spending. Each expense must fall into one of four categories: COVID response and adaptation, premium payments, revenue loss, or infrastructure investment.

According to a fact sheet from the state’s Office of Pandemic Resources, examples of acceptable expenses include repairing water and sewer systems, improving wages for essential workers and providing economic relief. directly to small businesses.

Each county or municipality in North Carolina that received ARPA funding last summer was required to submit an interim expenditure report to the U.S. Treasury Department by August 31, 2021.

These reports, however, only cover money spent through July 2021.

“Since then, the (US) Treasury has known that states and localities have only increased their pace of budgeting and spending relief funds,” Ramirez said.

According to the US Treasury Department, $174,123,543 was paid to the 18 counties in western North Carolina. Asheville and Morganton, the only two cities in the region to receive funding, alone got just over $13 million.

Other cities and towns in the region will receive ARPA funding through the state.

By the end of July, Asheville had used about half a million in ARPA funds for housing services, in stark contrast to much of the region. According to their interim reports, only six of the western North Carolina counties — Buncombe, Cherokee, Haywood, Polk, Swain, and Yancey — have spent ARPA money.

The documents show the six counties spent about $1.7 million on COVID vaccination efforts, administrative costs, public health initiatives, broadband expansion and payroll expenses.

This is only about 1% of the total ARPA money received so far in WNC.

But Ramirez said that shouldn’t be alarming. “Many states and localities have legislative or other processes they must follow before deploying funds or signing contracts,” she said.

“While this may cause a delay, more importantly it allows the community to engage on the plans around these historic investments.”

The next due date for ARPA expenditure reports is January 31 for counties and cities with at least 250,000 residents that received more than $10 million, and April 30 for those in less than 250,000 residents receiving less than $10 million.

As of July 31, 2021:

  • Avery County received $3,410,241 and spent $0.
  • Buncombe County received $50,733,290 and spent $16,433.
  • Burke County received $17,575,650 and spent $0.
  • Cherokee County received $5,557,546 and spent $72,764.
  • Clay County received $2,181,490 and spent $0.
  • Graham County received $1,639,565 and spent $0.
  • Haywood County received $12,104,347 and spent $256,742.
  • Henderson County received $22,806,876 and spent $0.
  • Jackson County received $8,534,441 and spent $0.
  • Macon County received $6,964,996 and spent $0.
  • Madison County received $4,225,654 and spent $0.
  • McDowell County received $8,887,567 and spent $0.
  • Mitchell County received $2,906,582 and spent $0.
  • Polk County received $4,025,394 and spent $91,648.
  • Rutherford County received $13,019,597 and spent $0.
  • Swain County received $2,771,974 and spent $341,115.26.
  • Transylvania County received $6,678,883 and spent $0.
  • Yancey County received $3,509,691 and spent $952,606.97.
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