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Council weighs options for rescue funds

Money cannot be used for pensions or to pay for tax cuts

Altoona last week received $19.6 million that was authorized through the American Rescue Plan — half the amount the plan calls for the city to receive — but local officials remain a long way from figuring out how they’ll use the funds.

Between now and City Council’s June 15 meeting, however, Manager Omar Strohm and Mayor Matt Pacifico will work on it, cobbling together suggestions for projects and outlining responsibilities for a proposed spending plan advisory council.

Based on provisions in the law and comments from local officials, there are uses for the “fiscal recovery funds” being allocated to local governments that are clearly permissible, uses that are clearly prohibited and uses about which the guidelines are subject to interpretation and possibly change.

According to an “interim final rule” from the U.S. Department of the Treasury, the funds can be used:

– To respond to the COVID-19 emergency or its negative economic impacts, helping households, small businesses, nonprofits and the tourism, travel and hospitality industries.

– To provide premium pay to those who did essential work during the pandemic.

– To make up for government revenue losses due to COVID-19.

– To provide necessary investments in water, sewer or broadband infrastructure.

Expressly prohibited are the placement of money into pension funds and the replacement of tax revenue losses that resulted from tax cuts.

It would seem that municipalities can use the money freely for broadband improvements and for stormwater projects, said Councilman Jesse Ickes.

The Mansion Park neighborhood is slated for a major stormwater project, to counteract frequent flooding when it rains hard, according to a conceptual plan presented Monday to council.

The Pleasant Valley area and Garden Heights are also being considered for stormwater projects, because of similar flooding, officials said.

All three could cost a total of $10.5 million, Strohm said.

Wastewater projects also seem to be clearly eligible for ARP funding, said Councilman Dave Butterbaugh.

Housing work may also be eligible, officials said.

The city needs more housing to attract people to live here and should try to figure out how to make development of such housing attractive for the private sector, Altoona Blair County Development Corp. CEO Steve McKnight told council on Monday.

It could take $3 million to make that happen, he said.

The ARP money can go to businesses, and it may be possible to do it by lending, so that the money would come back to the city to be reused through a revolving loan fund, said Mayor Matt Pacifico.

“There are a lot more needs and wants than money that is available,” Strohm said.

Municipalities all over the country are doubtless having similar discussions and will be asking questions that may lead to a loosening of the rules, which could benefit the city, Butterbaugh said.

Strohm, Pacifico and any other council members who wish to discuss the ARP issues should “come with a shopping list or wish list,” along with priorities, suggested Councilman Bruce Kelley.

They should also outline the role the advisory committee ought to play, Kelley said.

Council can act on the results of those discussions in June, officials indicated.

The city has received 18 applications so far from people interested in serving on the advisory committee.

Council is likely going to talk about the ARP funding at every meeting for the foreseeable future, Kelley said.

Mirror Staff Writer William Kibler is at 814-949-7038.

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