From making up lost revenue caused by COVID-19 to installing air filters and paying for public works projects, Dane County communities are beginning to decide how millions in federal relief aid flowing to municipalities should be spent in the coming years.
Cities like Sun Prairie and Verona have already signed off on how to use portions of their million-dollar-plus payments from the federal American Rescue Plan. Others, such as Fitchburg and Monona, are largely taking a wait-and-see approach to spending the money.
Toni Herkert, government affairs director for the League of Wisconsin Municipalities, said her organization has been hosting roundtables with local governments on what projects are eligible for the money, which doesn’t need to be committed until 2024.
“The one thing we have been telling communities — and they’ve been very receptive to — is the fact that they have time to spend the money,” Herkert said.
The $1.9 trillion coronavirus relief package passed in March provided $350 billion for state, local, territorial and tribal governments. In total, Dane County towns, villages and cities — excluding Madison — will get $30 million.
Classified as a “metropolitan city,” which uses a different formula to determine funding, Madison is in line for $47 million from the American Rescue Plan.
Earlier this summer, Madison Mayor Satya Rhodes-Conway proposed using about half of that to address one-time costs such as purchasing the Salvation Army of Dane County’s Darbo-Worthington site on the East Side, converting hotels to housing and building improvement grants.
The rest, about $24.4 million, would go toward maintaining government services and balancing the city’s budget to make up for the precipitous loss of revenue from the hotel room tax.
Smaller cities, typically those with fewer than 50,000 residents, were awarded funds based on population, or about $105 per resident. Payments will be distributed in two rounds: Half this year and the other half next year. The funds can be used for four broad categories:
- Support pandemic response efforts
- Replace lost revenue and help retain jobs
- Provide economic stability for individuals, families and businesses
- Address health and economic challenges that have contributed to the unequal impact the pandemic has had on different populations
As the second-largest city in Dane County, Sun Prairie is set to get $3.6 million in federal relief.
The City Council has already approved a little less than a third of that amount for projects like installing air filters at various public buildings ($133,000) and remodeling a portion of City Hall, including installing a permanent clear plastic divider at the front counter ($69,000).
The council also signed off on using $500,000 in stimulus funds to replace a shelter in Wetmore Park near a recently opened splash pad. Originally, the city planned to spend about $150,000 of its own money to rehab the shelter, said city administrator Aaron Oppenheimer.
But the American Rescue Plan gives leeway on how money can be spent in low- to moderate-income census tracts, such as the area around Wetmore Park, Oppenheimer said. The federal grant will allow the city to lower the local tax burden, he said.
Verona is also using a portion of its $1.4 million allocation on “immediate uses” this year.
City administrator Adam Sayre said the City Council approved spending $447,072 to reimburse a city-funded small-business grant program and to replace lost recreation and room tax revenue.
While plans are in place in Sun Prairie and Verona, Monona city administrator Bryan Gadow said his community, which is to get $855,665 from the American Rescue Plan, will likely make decisions on how to spend it as part of the fall budgeting process for 2022.
“We’re still taking our time to do some due diligence and get a better understanding from the IRS perspective what the eligible projects and expenses could be,” he said. “We want to make sure we understand that before we start putting together a plan for how it could be utilized.”
Fitchburg is also taking a wait-and-see approach on using its $3.2 million.
Staff in Middleton have come up with a list of potentially eligible stormwater management and energy-efficiency projects and social programs for the $2.1 million the city is allotted, which would likely be taken up in the normal budget process for next year, said city administrator Mike Davis.
Herkert, with the League of Wisconsin Municipalities, said she’s been advising communities to look at existing gaps in financing and identify other potential federal funding avenues before committing COVID relief money to certain efforts.
She’s also been “hammering home, which all communities understand, that they shouldn’t be using one-time funding to fund long-term projects or programs or staff.”
Herkert said there’s a lot of interest in using the money on water, sewer, broadband and outdoor recreation projects by either supplementing costs for planned projects or spurring new ones altogether.
In Verona, $688,000, or nearly half of its federal funds, could go to four stormwater and water utility projects next year, Sayre said, which would cut down on costs for ratepayers.
For the rest of Sun Prairie’s unassigned federal money — about $2.5 million — the city is paying for a “community needs analysis” and “equity audit,” costing about $100,000, to determine what should be delivered and for how much.
“I think our focus is primarily on making sure the community needs are met,” Oppenheimer said. “The city’s in a good financial position, so that hasn’t been a focus.”
American Rescue Plan allotments
|Sun Prairie||$3.6 million|