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Date: 1/18/2022
HAMPSHIRE COUNTY – The American Rescue Plan Act (ARPA) is a competitive grant program signed into law in March 2021 to help municipalities replace revenue and other losses due to the pandemic. The federal program received $130.2 billion in funding for distribution to cities, counties and towns.
Local town officials have scrambled to figure out which projects will best fit the program guidelines and qualify for funding. Therein lies the rub. The federal Department of Treasury published a number of guidelines about what is fundable. However, in the Overview of the Final Rule, issued this month, town officials were surprised to learn the final determination falls on the side of greater flexibility. Towns can declare ARPA money as replacement revenue for income lost during the pandemic.
Laurie Dell’Olio, Hatfield’s town accountant, was shocked. “We can take a standard deduction of $10 million in revenue loss?”
As allowed under the Final Rule, cities and towns may take the ARPA grants they receive as a replacement for lost revenues. For Hatfield, if leaders chose to take that option, all $485,000 the town receives this year can be classified as revenue replacement. The benefits are greater flexibility in how to spend the money and less red tape to authorize its use. A Town Meeting vote for spending it might not be necessary.
Sean Barry, a member of Hatfield’s Finance Committee, understood the logic behind the changes. He said, “There’s no way to monitor this.”
“There will still be reporting requirements,” Dell’Olio said, “but they’ll be much less strict ... If you want to take it all as revenue loss, you can.”
Barry offered, as an example of greater flexibility, that pension debt could be paid with revenue replacement funds, after which general operating funds earmarked to pay the pension debt could be used for something else. While he likened the money to free cash, he didn’t believe it should be spent for daily operating expenses.
Dell’Olio agreed. She said, “I would still use it for all the things we’ve thought about so far, and we should prioritize what to spend it on.”
Hatfield’s Select Board, Capital Improvement Planning Committee (CIP) and Finance Committee met Jan. 11 to look over a list of projects and identified needs, long- and short-term, large and small. Many of the items were already on the radar of the CIP committee. Other items, mostly for the school district, were purchased with operating funds in months past.
Superintendent of Schools Michael Wood explained the earlier spending. “These were things we did not anticipate we would have to do, for example replacing the filters in the machines we already had,” Wood said. “So when we purchased it, those materials, we bought them out of our general maintenance supplies” budget.
The Select Board included new spending and reimbursements of $25,495 in COVID-19 expenses for the district. The board also authorized $10,493 be spent for new air purifiers in Town Hall.
Dell’Olio informed the Select Board the town received two tranches of ARPA funding last year and should anticipate similar disbursements this year. “We’ll get that again,” Dell’Olio said. “$170,000 in May, $315,000 in August.”
Hatfield leaders had $485,000 to utilize. Spending on certain projects, such as the replacement of fuel tanks, was previously authorized by the Select Board. $55,000 in ARPA money will now pay for that project. The Fire Department will receive $19,000 for Lifepak replacements and $5,500 for protective gear and filters. School Street drainage work will be $110,000. The extension of the broadband system to the water treatment plant will cost $8,500, and a logic controller at the treatment plant will be $60,000. The Maple Street generator will cost $125,000. A new water main on Route 5 was funded for $100,000.
Premium pay for the Fire Department was allotted $46,000. Generators and switches for Ferry Street, King Street, and Maple Street lift stations were funded for a total of $250,000.
Select Board member Brian Moriarty moved to approve the list of projects for funding. He said, “We made a good dent in the projects and in the spending of the funds.”
In Pelham last week, the Selectboard met with representatives from many chairs of committees and departments looking to satisfy specific needs. Finance Committee chair John Trickey suggested that funding requests for a new departmental position, a long-term change, might not be a preferred option for a short-term program like ARPA.
“When you’re recommending things,” Trickey said, “if you’re looking for things that require payroll, that the town will have to continue to pay ... how will we handle that in the future?”
ARPA monies can be spent through the end of 2024. Cyd Reiman of the Community Preservation Committee asked a related question, whether ARPA money can be used to pay salaries for the Police and Fire Departments.
“That’s not a direction we can go,” said Robert Agoglia, chair of the Selectboard. “The ARPA money runs out in two years.”
As the Treasury’s Final Rule clarified last week, ARPA funds may replace lost tax revenues, money which then may be spent in a greater variety of uses. Agoglia, however, said Pelham cannot claim the town lost tax income during the pandemic.
Richard Seelig, a Conservation Commission member, asked if a grant can pay for a solar installation. Judy Eiseman, chair of the Board of Assessors, sequed from solar panels to the school roof. “Is there any way we could put up a sturdier roof?” she asked.
Trickey repeated a suggestion, made elsewhere, to pay for water testing in every household. Eiseman replied, “That’s a good idea. A lot of people aren’t testing their wells and don’t know what they have in them.”
Douglas Slaughter, finance director for the school district, expected no significant changes to the town’s contribution to the school budget. The schools have their own relief money in the form of Elementary and Secondary School Emergency Relief Fund (ESSER) grants.
Slaughter said, “We’ll use that before we ask for money from the town.”
Gayle Barton, chair of the Library Trustees, asked if the library could apply for updated ventilation in the stacks, possibly an air exchanger. She also enquired after COVID-19 tests. She said, “It’s a huge need.”
COVID-19 testing, vaccination, masks and related equipment are all fundable with ARPA monies. The discussion turned to bulk buying of protective equipment and the possibility of joining with other towns to purchase a pallet full of rapid tests for the virus.
Towns have a short window to decide on projects. A letter of interest must be submitted by Jan. 31, after which a completed application is due later, with assistance available from the commonwealth.