Rescue plan spending schedule a ‘marathon’

ARP money allocations to take time, ensure adherence to rules

The American Rescue Plan is giving lots of money to municipalities, but there are lots of rules on spending it; the rules have been changing; and many municipalities are struggling with how to comply, according to speakers at a recent annual convention of the Blair County Association of Township Officials.

Some categories of expenses are clearly eligible, some are clearly prohibited and some are "gray," said David Sanko, president of the Pennsylvania State Association of Township Supervisors.

It's important that if local governments spend in a gray zone, they do it right, because doing it wrong could require payback later. That might require a tax increase or could mean a lost opportunity for free help, according to Sanko and lawyer Daniel Sefick of Zelenkofske Axelrod in Pittsburgh, who also spoke at the convention.

The riskiest expenditure category for municipalities is recouping revenues lost due to COVID-19, Sefick said. "The calculation needs to be 100 percent spot on."

A case discussed at the convention concerned a county that was far too conservative in its initial figuring.

It calculated its revenues lost to COVID at $20,000. A recalculation using a program based on the law's allowances showed the real loss to be $345,000.

Among projects clearly eligible for ARP money are sewer, water and broadband infrastructure initiatives as well as operational changes to protect workers.

Among expenditures that are clearly ineligible are payments to pension funds, on debt service and for legal settlements.

Rebuilding a road torn up because of a clearly eligible waterline project would also be eligible, Sanko said. But a straight-up road project would not.

There's no need to rush to spend the funds, both speakers said.

Projects don't need to be under contract until the end of 2024 and don't need to be complete until the end of 2026.

The ARP spending schedule is a marathon, compared to the Coronavirus Aid, Relief and Economic Security Act of 2020, which was a spending sprint, according to Sefick.

Better to do the ARP projects right than fast, Sanko said.

The ARP allocated $130 billion to local governments nationwide, Sefick said.

The money allocated to municipalities in Blair County, excluding Altoona, which is getting $39.8 million, range from $10,000 to Tunnelhill Borough to $1.2 million for Logan Township, according to a web listing for Pennsylvania municipalities.

A sampling of other allocations: Allegheny Township, $643,000; Antis Township, $612,000; Frankstown Township, $726,000; and Tyrone Borough, $508,000.