American Rescue Plan Act – How to spend $1.4B

“I think we’ll find that there’s a raft of spending all over the place for things that people don’t think pandemic money is supposed to be used for.” – Peter Warren, Director of research at the Empire Center for Public Policy, a fiscal watchdog group based in Albany

A USA Today Network investigation into how 29 counties and cities across New York are spending $1.4 billion in federal pandemic relief funds awarded last year has found stark differences in the choices they made and how quickly they’re making them.

It also turned up expenses that had little to do with recovering from a pandemic.

To illustrate the wide swath of spending, for instance, Orange County officials jumped at the opportunity to use their $75 million windfall from the American Rescue Plan Act, or ARPA, to help pay for a new building for their medical examiner’s office. They proposed spending $17 million in federal funds on that one project.

By contrast, neighboring Ulster County opted to use much of its $34 million in federal funding to target social ills that the pandemic had worsened: shortages of emergency housing, affordable housing and care for people suffering mental-health and addiction crises.

And while it appears the lion’s share of the money was earmarked for pandemic-related items and other urgent needs, other spending raised eyebrows. Some examples include:

The city of Rochester set aside $5.5 million to build a nature center and $150,000 for an excursion boat.

Dutchess County earmarked $3 million for its county-owned ballpark, home to a Yankees farm team, and nearly $600,000 for grants of up to $20,000 for 33 private youth sports organizations.

Putnam County will spend $400,000 to repair water damage to the kitchen and downstairs tavern at the county golf course.

Elmira is spending $1 million on a new irrigation system for the city-owned Mark Twain Golf Course.

Utica is using $250,000 in ARPA money to build a dog park.

The law let local governments use funds to pay their workers pandemic bonuses, and several surveyed by the USA Today Network did just that. But the city of Mount Vernon went further than others, setting aside $3 million to award a $5,000 bonus to each of an estimated 600 employees.

The inquiry also found that some recipients will spend significant sums on consultants and new employees to administer their ARPA funds. Ulster County, for example, hired three ARPA workers and expects to spend $1.7 million over several years on their salaries and benefits.

The wide variety of uses – some of them questionable – is due to both the program’s broad rules and the pandemic taking a lighter toll on state and local government budgets than originally expected, said Peter Warren, director of research at the Empire Center for Public Policy, a fiscal watchdog group based in Albany.

“I think we’ll find that there’s a raft of spending all over the place for things that people don’t think pandemic money is supposed to be used for,” he said. “There’s going to be plenty of spending to criticize as frivolous and unrelated.”

Having little or no budget gaps to fill freed localities to spend their funding in ways beyond covering revenue losses and direct pandemic costs, Warren said. And that set the stage for familiar contrasts in spending priorities – “the same sort of debates that we have about what is appropriate and what is a waste of funds.”

The USA Today Network launched the inquiry to bring transparency to a huge flow of taxpayer money that remains hidden or hard to find in many places. The federal website created to disclose that information offers little at this stage, and only some counties and cities have made their spending plans public.

Some recipients have opted to use tens of millions of dollars in federal money to fund their usual operations, rather than spend it in new ways.

Among them are Yonkers, which deposited $38 million in ARPA money into its budget, and White Plains, which plans to do the same with its entire $23 million.

Others have been slow to decide at all. With $19 million in total funding, Putnam County has so far decided only on the county golf course $400,000 tavern renovation, which officials say may be completed by June.

The USA Today Network obtained federal spending reports and other documents and interviewed officials to track the fate so far of funding awarded to a sampling of 16 counties and 13 cities around New York, reaching from downstate Yonkers to Rochester and Ithaca. Each got the first half of its money last spring and is set to get the rest by around May of this year.

All told, the 29 counties and cities have so far mapped out about $607 million in planned expenses, or about 44% of the total ARPA funding at their disposal, based on the information reporters gathered from them.

Those interested in what their counties and municipalities are spending on can check here for our exclusive searchable data.

Some counties and cities surveyed by the USA Today Network sought public input through surveys and forums before making their spending decisions, which the ARPA law didn’t require them to do. The city of Kingston, for instance, held two public hearings before releasing a 98-page spending plan with dozens of projects in February.

Others didn’t.

Orange County lawmakers approved an initial spending plan in February that was first shown to them at a committee meeting one week earlier, after a handful of officials and legislators drafted it with no public discussion or outreach.

That closed approach irked the the leader of the Legislature’s Democratic minority when plans for the first half of the county’s funds were unveiled on Jan. 25.

“Now all of the money is being spent, or proposed to be spent, in these ways without really any input,” Legislator Mike Paduch vented at that meeting. “We’re just hearing what you guys agreed upon. I’m pretty concerned about that. That definitely has to change.”

Deputy County Executive Harry Porr replied: “We’re here today talking to everyone. This is about expediting projects and getting them moving in a proper way and bringing them to the table now. And here you are speaking about them.”

A Orange County spokesman later told the USA Today Network that while no forums or surveys were done, county officials considered any ARPA spending suggestions they got on Facebook or through other means.

A task force will present a plan for the second half of the funding to the Legislature this summer.

Among counties and cities that drafted spending plans, much of the funding earmarked so far is destined for typical government projects and pent-up needs that suddenly could be met with ARPA money in hand.

The city of Middletown, for instance, steered $3 million of its $11.3 million to the overhaul of a historic, 19th century train station, once slated for demolition but now expected to house a day care program for low-income families and other services.

“It’s a gateway into the city, and it’s been a symbol of urban decay in our city for maybe the last 20 years,” Mayor Joe DeStefano said of the dilapidated O&W station.

The ARPA funds will cover only part of the $11.7 million rehabilitation cost, but made the project possible and paved the way for other grants that followed. Without those pandemic funds, DeStefano said, the city likely would have spent more than $1 million to demolish the train station.

Some recipients chose to fund upcoming expenses that local taxpayers would have borne, like renovations or water and sewer lines, which may need services such as hydro flushing sewer lines. Sullivan County took the simple route, splitting the first half of its $15 million two ways: half for road repairs and half for building upgrades at SUNY Sullivan.

Others, such as Ulster, seized a chance to do big things they otherwise couldn’t afford.

Rochester has committed nearly $129 million of its $202 million allotment to an array of infrastructure, parks and housing projects. But the logjam of capital projects has the administration assessing what can be done on time, and whether to re-appropriate some of those dollars.

“You know what the challenge is,” said Rochester Mayor Malik Evans. “Every municipality has gotten these ARPA dollars, so everyone is trying to spend money all at the same time.

“It is putting a cog in the system. I mean, the construction costs are nuts.”

Less than $15 million has been spent or encumbered. Evans expects to still put significant money behind violence prevention, and is working with the Monroe County about how to align investments to maximize impact, the mayor said.

“I am not interested in doing a series of one-off expenditures,” said Monroe County Executive Adam Bello said. “This is an historic, once-in-a generation – maybe once-in-a-lifetime – opportunity to utilize a significant amount of federal grant dollars to make lasting impacts.”

Wide latitude on how to spend money

Rockland County is also still working on its ARPA plan, so far carving out just $1 million of its $63 million to distribute as grants to restaurants and food pantries. The county announced its first four restaurant grants of up to $25,000 each in late March.

By contrast, Ulster officials already had decided in broad terms by last summer how to spend the county’s money, and plenty of others have followed suit. Dutchess County, Utica and Kingston all have mapped out their entire ARPA use, in many cases down to the specific projects.

The deadline to make those decisions is still more than two and half years away. Under federal rules, states and local governments must commit their ARPA funds by the end of 2024 and complete all their expenses by the end of 2026. They are expected to log their spending quarterly.

The money comes from the $1.9 trillion relief package President Joe Biden signed in March 2021, one year into the COVID-19 pandemic. The American Rescue Plan included $350 billion for state and local governments to cover pandemic-related expenses and lost tax revenue – aid that Democrats in Congress had sought for months, and Republicans had opposed.

New York and its local governments got a total of $24 billion of that funding, with every county, city, town and village getting a cut.

Counties and cities with more than 250,000 residents or that got more than $10 million in ARPA funds were required to submit their first spending reports to the U.S. Treasury Department by Jan. 31. The USA Today Network obtained those reports through public-records requests from many of the 29 counties and cities surveyed.

Those reports showed few expenses had been made by the end of 2021, when local governments were still waiting for the Treasury Department to release its final ARPA spending rules. And they revealed little or nothing about the recipients’ overall spending plans, which reporters learned instead through other documents and interviews.

The next reports showing what counties have spent through March 31 were to be submitted by April 30. Some entities, such as metropolitan cities and counties with a population below 250,000 residents awarded less than $10 million, are not required to submit an expenditure report until the end of April.

Recipients were given specific ways they could spend their ARPA money: for COVID-related health costs; water, sewer pipe lining technology for drain repair services; aid for people and businesses hurt by the pandemic; worker bonuses; and expanded broadband internet service.

But they also could set aside funds to replace revenue they lost in 2020 and use if for any “government services.” That flexible option – and a generous definition of lost revenue – enabled counties and cities to plow ARPA funds into their budgets or spend large sums on buildings and projects with no or little connection to the pandemic.

“You have tremendously broad latitude in how you can spend this,” said Warren, from the Empire Center think tank.

Orange County, for instance, calculated that it lost $74 million in revenue in 2020 under the federal guidelines, which assumed its 2019 revenue should have grown by 5.2%. That apparent loss roughly matched the county’s entire aid amount and gave it free rein to fund any of its priorities, like a medical examiner building.

Only a few ARPA uses were forbidden:

No deposits into pension or reserve funds.

No paying off court settlements or judgments.

No using ARPA to cut state taxes.

No funding projects with conflicts of interest.

The “revenue replacement” option – it was also used to make the Dutchess County ballpark an eligible use – was meant to help local governments replenish depleted coffers and avoid layoffs. Binghamton, for example, put $12.5 million of ARPA money into its budget to replace lost revenue. Rochester kept $5 million to make up for lost parking income.

But that allowance didn’t account for the big sales-tax comeback that already had helped many recover.

Take Orange County, which collected almost $20 million less sales tax in 2020 than in 2019, according to state data. Its 2021 total shot up by $52 million compared to 2019, more than making up for what it lost the previous year. Other New York counties saw similar sales-tax spikes in 2021 after losing moderate amounts in 2020.

Ten months ago, Dutchess County Executive Marc Molinaro said the total investment of $13.1 million in the county’s minor league stadium would help county taxpayers in two ways. It would allow the county to buy the land on which the stadium stands from the Beacon City School District, which would eliminate annual lease payments, and it would facilitate the completion of a 25-year lease agreement to keep the New York Yankees’ affiliate that plays there now.

Then came growing opposition to the clubhouse construction, along with projections of higher costs for the clubhouse. Detractors also mentioned the optics of Molinaro promoting federal funds for the clubhouse while he runs for U.S. Congress.

In April, Molinaro changed course, seeking approval from the county Legislature to redirect $9.5 million from the clubhouse construction to a fund to promote affordable housing.

“We’ve been screaming about this since it came up last year,” sad Legislator Nick Page, D-Beacon. “Housing is an acute need, with so many people priced out of the market. . That’s a good place to put that money, but it remains to be seen how it is employed.”

Dutchess is still planning to pay for the improvements to the stadium, but from a different source of funding. The county is proceeding with its multi-faceted program, with funding for a youth center, homeless housing facility, and grants to municipalities, libraries, arts organizations, and libraries.

Ulster County Executive Pat Ryan said he saw the federal windfall as a “once-in-a-generation opportunity” for the county to do two things: dig out from the damage that COVID caused, and invest in social needs that government had too long neglected, like emergency services for people suffering mental-health or addiction crises.

“It was very clear to us that this was an existential crisis,” Ryan said.

That led his administration and county lawmakers to allocate $3 million to open a crisis stabilization center and $1.5 million to create “respite housing” for people in crisis. Ryan said his county took a “people-centric approach” to its ARPA decisions, focusing on the human impact of everything it chose to build. Those choices, he said, “show our values.”

They also have the practical effect of avoiding future problems, Ryan argued. What the county is confronting today with its ARPA funding, he said, are the “consequences of long-term underfunding” of housing, mental health services and other human needs.

“When you don’t make those needed investments, the community ultimately pays the price some years later,” he said.

Ryan added that public feedback Ulster gathered through surveys and forums largely validated the priorities he had outlined to the Legislature in the spring of 2021.

Pandemic bonuses and new hires

Binghamton,New Rochelle and Mount Vernon were among at least seven cities and counties that so far had decided to use ARPA funds to award “premium pay” to employees who risked coronavirus exposure at work. Amounts ranged from about $1,000 per public employee in Dutchess County and Poughkeepsie to $5,000 in Mount Vernon.

Among those expected to receive bonuses in Mount Vernon were cops, firefighters, public works employees and municipal workers who distributed food at City Hall.

“It’s for those who worked through the height of the pandemic,” Mount Vernon Mayor Shawyn Patterson-Howard said. “They worked during a time when we had more questions than answers. People in some jobs could work from home, but our staff did not.”

New Rochelle’s program would make up to $25,000 available to frontline employees in local business who worked during the pandemic. That includes workers from private companies, healthcare nonprofits, day care/educational facilities, public transportation agencies, and certified economic development organizations located in the city.

Employers have until July 15 to apply.

Westchester and Putnam counties ruled out using ARPA for hazard pay.

“We aren’t giving bonuses,” Putnam County Executive MaryEllen Odell said. “Businesses were suffering, and our employees all received their salaries on schedule, with their accruals and health benefits. We are very grateful for the dedicated employees who stood up in COVID. This money is to help the business community and the taxpayers, to give them a benefit moving forward.”

Putnam, however, has yet to create a program to help its business sector.

One unexpected side effect of the windfalls for counties and cities: in a number of places, the benefit has brought expenses of its own.

Orange County, for instance, has set aside $200,000 of its federal money so far for consultants to help navigate the many rules and reporting requirements that come with the funding.

Neighboring Rockland County, meanwhile, spent $250,000 last year on five full-time workers in its new “ARPA Department.” It created that office and hired four new employees for it to ensure that spending complies with ARPA rules, county spokesman John Lyon said.

Ulster County set aside $1.7 million to pay the salaries and benefits for several years of three new employees it hired to run the county’s ARPA-funded programs. That was more than any other county or city surveyed by the USA Today Network planned to spend on administrative costs.

Ryan, the Ulster County executive, argued that the many duties of overseeing complicated ARPA initiatives, including construction projects and the distribution of grants to businesses, warranted hiring new workers to do them. For example, just administering $1.5 million in grants will require fielding applications, scoring them and making data-driven decisions. Ryan said ARPA employees were needed both to implement programs effectively and report those expenses to meet the demands of transparency.

Warren, from the Empire Center, said it was unfortunate that local governments are spending ARPA funding on consultants but also understandable, given how long, complicated and ambiguous the regulations are. The final version released earlier this year took up 437 pages.

“It’s not black and white,” he said. “It’s a lot more complicated than it should be.”

Mayor Evans in Rochester cautioned that when handling federal money, details are critical.

“I don’t want to be mayor and have (federal officials) come back and say you didn’t spend it the way in which you were supposed to, so we’re clawing it back,” Evan said.

The city’s consultants, who will be paid $100,000, are “kind of like our Sherpas as we go through spending these dollars,” Evans said.

In Wayne County, an internal committee of government officials surveyed department leaders to assess needs and wants and has been assessing proposals.

“We are going more with … government services,” said Patrick Schmitt, the county treasurer and a committee member. “We want to do things people will benefit from, that they can see and touch.”

That has meant kayak launches, work on county park buildings, fixing an elevator in the courthouse, a highway project. But also IT upgrades. And $25,000 for outside accountants.

“The rules have been ever changing,” Schmitt said of the roughly 250 pages of regulations attached to the dollars. “That’s why it’s nice to have a consultant onboard. … They are going to know it inside and out. I know the basics.”

Fighting poverty by guaranteed income

The cities of Rochester and Mount Vernon both took advantage of ARPA funding to test a progressive approach to curbing poverty: a guaranteed-income program, which provides modest amounts to poor families each month to help them shoulder household expenses.

Mount Vernon, which has joined a nascent national program called Mayors for a Guaranteed Income, has set aside $1.7 million for a pilot program in which it will give 200 households $500 a month each for any needs, such as an inflated Con Edison bill, rent, child care or transportation.

“It’s not that much when you are paying rent and you have two kids,” said Patterson-Howard. “It will help take off some of the stress.”

The city will have financial advisors work with the recipients. Households earning up to 80% of the area median income – $71,400 for a single person, $102,000 for a household of 4 – are eligible to apply.

The Empire Center’s Warren cautioned that starting this type of program may stoke expectations it will continue into the future, after the federal funds have dried up. He warned that using the one-time ARPA money for any recurring costs could worsen a city’s financial stress once they shift to local taxpayers.

With COVID cases fading, most counties and cities surveyed by the USA Today Network had set aside only modest amounts of their ARPA money – if anything – on pandemic-related expenses, such as protective equipment for workers and COVID vaccination clinics.

One notable exception was Oneida County, which spent more than $3.5 million in ARPA funds to distribute $100 gift cards to more than 32,000 residents who got vaccinated or got booster shots.

Orange County also stood out for budgeting the huge sum of $10 million for future COVID-related expenses. It did so mainly to make ARPA money easily accessible if the unpredictable pandemic took another twist, Karin Hablow, the county finance commissioner, explained to lawmakers in January.

“Will we spend $10 million?” she said. “Not necessarily. But at least this will make it available for us so we can spend it when we need to to respond.”

Parks, pipes and cyber get a boost

Many cities made recreation and parks a priority on their ARPA project lists.

Newburgh will use $2.5 million to rebuild the city’s pool and open splash pads for kids

Utica leaders earmarked $7.8 million for Roscoe Conkling Park improvements, $2 million for a skate park and $2 million for programs at its children’s museum.

The infusion of cash also rescued cities that faced huge bills to upgrade aging water and sewer systems.

Both Newburgh and Mount Vernon will use chunks of ARPA money to pay for costly sewer replacements ordered by state and federal environmental regulators. Mount Vernon will spend $7.5 million in federal funds on its long-delayed sewer project, with a total price-tag estimated to be as much $200 million.

Newburgh has set aside $2.5 million so far for its state-mandated, $39 million sewer replacement, and nearly $11 million altogether – half of its entire ARPA funding – for sewer and water projects in general.

At least three cities are funding another kind of pipe work: replacement of lead water lines. Elmira earmarked $2 million for that work and repairs to the city’s storm sewer system. Newburgh announced in March it will use $1 million to replace lead pipes.

And Rochester budgeted more than $21 million for lead pipes – the largest single expense by all 29 cities and counties.

Local officials found a wide variety of other uses for their windfalls. Livingston County is buying cybersecurity equipment. Yates County plans to build a remote public health office. Seneca County is making its historic courthouse accessible to people with disabilities. Elmira is installing a new irrigation system at its Mark Twain Golf Course.

New Rochelle budgeted $5 million for “green infrastructure”: train station improvements, a bike lane, traffic islands, and park improvements.

In one unique twist, Elmira officials chose to give $1 million of the city’s $28 million in ARPA funding to Chemung County. City Manager Mike Collins said county lawmakers asked the city to share its funds because of the leadership by Chemung’s county executive and public health director during the pandemic.

Nonprofits, businesses get cash

Quite a few cities and counties are distributing grants to businesses and organizations as a form of trickle-down relief from their own pandemic struggles.

New Rochelle plans to dole out $2.6 million to nonprofits and $700,000 in grants for minority- and women-owned business and for workforce development.

Westchester, Ulster and Rockland counties all dedicated ARPA funds for grants to a combination of small businesses, nonprofits and religious organizations. Westchester set aside $17 million for that purpose, the largest single expense it has so far planned for its $188 million in ARPA funds.

Poughkeepsie chose to spread $400,000 around the city by giving each city council member $50,000 to award to projects in his or her council ward.

Utica officials made a similar pool of discretionary funding: $1.2 million that will be distributed equally among each of the council’s six districts, $200,000 per district.

Dutchess County is awarding grants averaging $18,000 to 33 youth sports organizations, such as Little League clubs, soccer teams and elite travel teams for softball, soccer and football. For instance, the Hudson Valley Admirals, which serves about 150 youths in tackle football, flag football, and cheerleading, will get $20,000, the maximum offere for equipment.

The Dutchess Divas softball team, with 11 girls ages 16 to 18 who are among the county’s top college-bound players, received $5,000 to help pay for tournament fees, practice facilities and other expenses that parents typically pay or hold fundraisers to cover.

“This gives us an opportunity to alleviate many of the player fees that would have increased,” said coach Adam Zolotas.

For some municipalities throughout the state, figuring out what they plan to spend their money on has been difficult.

Ithaca received $16 million amid staffing shortages due to COVID and retirements. While they have spent almost $600,000 on wastewater treatment facility repairs, and plan to spend $1 million more, the dollar amounts for eight more projects have yet to be decided.

Utica, meanwhile, has planned out $59 million of their total $60 million, half of which they will not receive until later this year.

For cities in particular, the windfalls have eased financial strains that predated the pandemic, enabling them to do things they had long put off.

Mount Vernon used $4 million in ARPA funds to buy garbage trucks and street sweepers, so the city will no longer have to borrow those vehicles from neighborhood municipalities.

“We need to reset,” Mount Vernon Mayor Shawyn Patterson-Howard said, “and deal with the deficits we’ve been dealing with.”

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