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ARPA Spending, Perception


The American Recovery Plan Act or “ARPA” included the infusion of $6.15 billion in aid to Pennsylvania counties, cities, boroughs and townships. While smaller municipalities often saw hundreds of thousands of dollars in new ARPA funds flow into their coffers, larger entities received funding well into the millions.


Regardless of dollar amount received, every local government entity is tasked with distributing these funds in accordance with the rules and regulations established by the US Treasury. This “gifting” of funds is unprecedented in US history and many rural Townships and Boroughs have never experienced such a large outlay of funds with a multitude of options for spending it. How this money is utilized by the community will be closely securitized not only by the regulatory body, but also the citizens of each community.


There is a saying that dominates the political world: “Perception is everything.” I would have loved to have been able to take claim of that statement, because it is such as an accurate view of the municipal world. Credit has to be given to Lee Atwater, a political consultant and strategist for the Republican Party back in the 1970s and 1980s. Atwater understood that just because an action is legal and justifiable doesn’t mean the perception of the action will be positive.


As you make decisions within your community to distribute these funds, take into consideration the impact of those pronouncements. All municipalities have been advised as to how they can spend this windfall, and those that have proper foresight have engaged the assistance of professionals that are well-versed on the subject. An in-depth discussion with your solicitor and conversations with PSATS or a similar organization is highly advisable prior to any actual disbursement.


Let’s take a look at a recent situation where a rural township received nearly a half-million dollars in ARPA funds. We are all aware that rural township meetings sometimes have no attendees. People that have busy lives just don’t seem to have time to “check in” on the Supervisors. They are elected to serve in the best interest of the community and let us be honest here, it is a thankless job for the most part. Typically, you don’t see a resident until something that has affected them directly has taken place. You can follow all the advertisement rules to the best of your ability, but a discussion in the local coffee shop can cause more consternation than any posted ad the township may place.


The Supervisors at this township decided in a public meeting that a good use of the ARPA money was to give every employee $10,000 each. Of course, there are restrictions. The US Treasury has dubbed this “premium pay” and can be used for work incurred after March 3, 2021. It is limited to in person work and not teleworkers. In addition, it can only go towards an employee whose work presented “heightened risks due to being physically present at the workplace.” According to regulations, premium pay cannot exceed $13 per hour or $25,000 per worker. It cannot increase anyone’s total pay above the higher of 150% of the state or county average annual wage for all occupations. In this case, they calculated it to be about $5 per hour for the employees.


Like many rural townships, money is always an issue. A portion of the remaining funds are going towards lost revenue. So that will end up being channeled into the general fund at some point. Another portion will go towards a major road improvement project and lastly a donation to the local volunteer fire department. It should be clearly understood that as long as they meet the rules and regulations, all of these expenditures can be considered legal.


The big concern here is “perception.” If you are a resident struggling to pay your sewer bill, finding week-to-week financial demands overwhelming and you read your taxpayer-funded township is handing out $10,000 payments to staff for doing what you elected them to do, how would you feel? Needless to say, the local TV crews and newspapers had a field day with this. Now their solicitor is tasked with fielding legal concerns and the Supervisors have been painted as being irresponsible with the funds.


Again, it appears at this time that the payments were legal, although proper auditing will make the final determination. I am sure that all of us would love a $10,000 windfall, but local government work is public service. Ask yourself: How will this be perceived? Then, if you still believe your plan for spending the ARPA money is the right approach, be prepared to answer questions from your constituents, the public and the media. Because, as noted earlier, quite often “perception is reality.”


If you have any concerns, you should contact KMS for a complete review of your proposed spending. “Fire this thing up because the perception is there.”

 

About the Author

David L. Anthony is a member of the Keystone Municipal Solutions team of experts. He is a veteran of municipal government, having served more than 32 years in various positions of public service. Contact him at david@keystonemunicipalsolutions.com. To learn more about David and the Keystone Municipal Solutions team, click here.

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