Northwest Arkansas Cities Make Wish Lists for US bailout money
Administrators in the five largest cities in northwest Arkansas hope the millions of dollars in the US bailout will have a lasting effect on the lives of residents in the aftermath of the pandemic.
Final guidance on how to use the money is expected to come from the federal government next month.
More than $ 79 million is channeled through the federal pipeline to Fort Smith, Fayetteville, Springdale, Rogers and Bentonville. The cities have already received half of the allocated amounts and will receive the other half in a year.
Cities must commit all their money by 2024 and spend it by 2026. Otherwise, they must return it.
The US Treasury Department has described four ways cities can use the money: spending on public health and addressing the impacts of the pandemic on economic development; replace lost tax revenue; wage premium for essential workers; and water, sewer and broadband infrastructure.
The categories are broad, but there are nuances to each, said John Wilkerson, general counsel for the Arkansas Municipal League. For example, a city could use money intended for water supply and sewer infrastructure for drainage if the project met the requirements of the Clean Water Act. Money intended to replenish a city’s general fund due to lost sales tax revenue could be used for a variety of purposes, including streets. Cities could also pool money for a regional broadband upgrade.
Each city will have to report its use of the money to the federal government and be held accountable for the uses, Wilkerson said. It makes it a bit difficult to give money to private entities such as businesses or residents for rent relief, he said. If for some reason the money did not go to what it was intended for, the city that gave the money should go to the federal government. The city will have to follow the money wherever it goes.
The $ 350 billion US bailout money paid to state, municipal and tribal governments is intended to avert the long-term effects the pandemic could cause, said Mark Hayes, executive director of the Municipal League of the United Nations. ‘Arkansas. Interim measures such as rent relief or small business loans have been included in other programs, such as the Coronavirus Aid, Relief and Economic Security Act; Emergency rental assistance program; and the paycheck protection program, he said.
The federal government calculated the amounts to be given to each city using information from the 2019 census and the formula it uses to administer block grant money for community development, according to the department’s website. of the Treasury. The formula takes into account several measures of community needs, including poverty, overcrowding and age of housing.
The league has spent the past few months guiding cities on rules for using money, holding weekly online sessions, and posting information on its website. For now, the general message to cities is to hold onto the money until final regulations are passed by the federal government, Hayes said. After that, it will be up to city leaders to decide how best to meet the needs of their cities, he said.
Cities want to meet long-standing needs without biting more than they can chew. Almost all types of projects involve ongoing maintenance and staff time. Municipal governments make plans as directions are released, and elected bodies will have the final say on where the money is spent.
The Springdale City Administration is trying to find a way to ensure that the community formerly known as Bethel Heights is included in its allocation.
Springdale is expected to receive $ 21.4 million, the largest among cities in northwest Arkansas. However, the census information used to calculate the amount predates the integration of Bethel Heights into Springdale last year.
The money for towns of less than 50,000, which would have been Bethel Heights, comes from the state. Because Bethel Heights no longer exists, the state cannot pay the money to Springdale, Mayor Doug Sprouse said. Bethel Heights had a population of 2,638 in 2019, according to census data.
“I don’t know what our options will be, but we’ll go all the way to figure out how to get there,” he said of the money.
Regarding needs, Sprouse said he is interested in workforce development, cybersecurity, and technology upgrades, especially remote workstations and hardware upgrades for city employees. He also thinks of broadband and water and sewer works.
Advice is still being made on how cities can spend the money for these purposes. Sprouse said he has broad goals and the details will determine how the city can achieve them. He could convene a working session with the city council once the final guidelines are published, he said.
“We would rather return the unspent money than spend it badly and have to pay it back. We’re going to be very careful. We’re not going to be in too much of a rush,” Sprouse said. “Having said that, we have until the end of 2024 to force it, but that will also come fairly quickly. And the forecast is still being adjusted.”
Fort Smith city administrator Carl Geffken has said he wants to spend most of the $ 21.2 million the city will receive on needed improvements and repairs to drinking water infrastructure.
The city is in the process of constructing a 48 inch water pipe from Fort Smith Lake to Mountainburg in Fort Smith. The city drove about 6 miles for $ 14.7 million. There are four other phases, representing nearly 29 miles with an estimated cost of $ 140 million, he said.
The money for the project comes from the sale of bonds backed by income from residential water bills and sales tax, Geffken said. State and federal loans will also help the project, he said.
The new line will better serve the entire city and the 13 other cities and water associations that buy from Fort Smith, Geffken said.
The administration plans to spend most of the US bailout money on the project, with some remaining for broadband and making up for lost revenue during the pandemic, he said.
The city is also authorized to invest the money in a federal consent decree issued in 2015. The federal government commissioned the project, estimated at more than $ 600 million, after discovering decades of runoff in the Arkansas River at from the city sewage system.
However, the city has needs outside of the consent decree, Geffken said.
“We have to balance. Everything cannot go towards the decree of consent,” he said. “We have other needs in the system, and this is an important project, completing this transmission line.”
A large net
Mayor Lioneld Jordan has said he wants to use the money in any way he can to solve social, environmental and economic issues in Fayetteville. He wants to cast a wide net and reduce it, he said.
The city is expected to receive $ 17.9 million. Jordan said he wanted to make up for lost income, stabilize the city’s finances and invest in the future.
He collected ideas from residents and businesses, Jordan said. He also plans to have various resident-led panels – including the Environmental Action Committee, the Community Development Board, and a newly formed economic task force – discussing potential uses for the money. Department heads also make lists of projects.
Workforce training, water and sewer projects, broadband, alternative transportation, streams and trees, clean air and adequate housing are all areas Jordan said. want to explore.
The plan is to put a list in front of city council using feedback from panels, department heads, administrators and residents. Jordan said he would seek feedback from council members and residents at subsequent meetings.
Proceed with caution
Mayor Greg Hines has said he is taking an extremely cautious approach to spending the $ 11.7 million that is due to Rogers.
Hines said he did not want to launch projects that the city could not support in terms of maintenance. The money from the US bailout is a one-time injection, and any city project, especially infrastructure, will have ongoing costs, he said.
The city has spent the past four or five years trying to figure out how best to move the development needle into underserved areas east of downtown, Hines said.
“At the moment, it is not draining by gravity. So each lot or each plot would need its own lifting station,” he said. “Obviously, to maintain this kind of approach for the long haul is really foolish and foolish.”
Several Walnut Street subdivisions are served by individual sewer lift stations, Hines used as an example. It may be appropriate to examine entire areas near Lake Atalanta or south and east of Railyard Bike Park on Cherry Street and use the money for sewer projects there, he said. he declares.
Bentonville has a team of department heads and municipal staff who determine eligible projects as directives arrive, said Mayor Stephanie Orman.
The city is on board for $ 6.9 million. Orman said she wanted to present a specific set of projects with defined budgets and timelines to city council.
Water and sewage infrastructure are the most obvious target, given the city’s growing population, she said. These types of projects are some of the most effective uses of public money, even though they’re not the most exciting to tackle, Orman said.
“Everyone needs water and sewage,” she said. “These are vital services that we must provide.”
Cities in Northwest Arkansas will receive the following amounts in US bailout money:
• Springdale: $ 21.4 million
• Fort Smith: $ 21.2 million
• Fayetteville: $ 17.9 million
• Rogers: $ 11.7 million
• Bentonville: $ 6.9 million
• Total: $ 79.1 million
The Arkansas Municipal League posts regular updates to its website on federal guidelines for cities to follow when using US bailout money:
Source: Springdale, Fort Smith, Fayetteville, Rogers and Bentonville