The American Rescue Plan: A chance for cities to close the financial gap and build a better future for its residents.

During the COVID-19 pandemic, cities have suffered to a great degree. Some have furloughed employees and held back crucial services that their residents relied on.  For example, the city of Durham, North Carolina suspended or reduced such services as public transportation, waste pick-up and public garage facilities.  All but a few cities completely shut down public access to City Hall facilities halting the normal board, council, and committee meetings previously open to the public.  While emergency services such as 911 continued to operate at normal levels, other vital services including fire and police closed major portions of their facilities to prevent the spread of the virus.

Recently, there has been a significant drop in the spread of COVID-19. Most states are lifting their mask-wearing orders and relaxing public mandates.  As of the first week in April, the state of Alabama reported that COVID-19 cases were down 94% and hospitalizations were down 90%. This means that businesses are reopening and going back into full service.  As private and public entities return to normalcy, revenue is urgently needed to make up for more than a year of stagnation.

The American Rescue Plan (ARP) funds that have been released to every city, county, and state have come at the right time.  Cities are restarting the operation of public services and making plans to repair old infrastructure that have been waiting a long time to be addressed.  For many of the cities, the funding is a financial lift that most areas of the US may never see again.  Because of the drain on general fund expenditures and revenue in each state, the ARP is more than a stop-gap measure provided by the federal government, but it is a significant catalyst towards moving these cities out of a longstanding slump.

According to Brookings Institute, cities should utilize their ARP funds by taking a “three-pronged approach to stabilize, strategize, and organize”:

Stabilize: Since many municipalities operated at a deficit, ARP funding should first plug the hole in general fund budgets returning public services and essential city departments back to full operation. Those cities which have not balanced their budgets prior to COVID-19 will have the opportunity to chart a new fiscal course.

Strategize: With a balanced budget, cities can look to their strategic needs which often include dilapidated infrastructure and property repair. Beyond capital projects, there are also social and cultural inequities which can receive an infusion of investment with the new funds. Historically, minority communities are underserved in affordable public housing, access to good healthcare, and pathways to decent paying jobs.  ARP funds can strategically address the equity gap in a considerable way.

Organize: Establishing a council to identify investments, qualify needs, and execute the plan will be crucial. The Brookings Institute suggests that “Regional Recovery Coordinating Councils” should be made up of public/private partnerships including small businesses, neighborhood leaders, social service agencies, philanthropic leaders, and corporate heads.  For example, the city of Birmingham, Alabama will receive $149 million in ARP funds while Jefferson County, where the city resides, will receive $128 million.  The council would be tasked with ensuring that the release of ARP funds to the state, city, and county are equitably coordinated.

Contact iSeek to discuss how your municipality can stabilize, strategize, and organize to ensure ARP funds are delivered effectively across shared domains of government, non-profit and private entities.  iSeek consultants utilize their local government experience to provide advisory services on assembling councils, managing investment projects, and monitoring the results.  To learn more about iSeek’s services and resources, visit our website. Subscribe to our blog or follow us on LinkedIn. Contact us directly at info@iseeksolutionsinc.com.

Source: https://www.brookings.edu/blog/the-avenue/2021/03/23/how-should-local-leaders-use-their-american-rescue-plan-funding/#cancel