Local governments received federal funding, referred to as ARPA dollars, during the covid pandemic. Their deadline to obligate those funds is December 2024, or return them to the federal government. The city of McDonough has about half of its funding, or a little more than $5 million dollars, remaining to obligate before year’s end.
McDonough ARPA Dollars
The US Congress approved the American Rescue Plan Act in 2021 in response to the COVID-19 pandemic. A portion of this program distributed $350 billion dollars to state and local governments. McDonough received right under $10 million dollars. Their amount was $9,996,144.
Local governments must obligate these funds by December 31, 2024, or return them. They must then spend the dollars by December 2026. To obligate means to have a contract, purchase order, or other paperwork showing a commitment for those dollars.
Mike Clark shared an update to the city council on October 3, 2024. Clark is the city’s retired finance director who now works as a consultant for the city. Altogether, McDonough has a little over half of its ARPA dollars remaining. The council did, however, previously approve categories where to spend the dollars. The question the city now faces is to ensure those dollars have an obligation by December.
The chart below reflects the categories and remaining funds. The city’s previous ARPA expenses are not reflected in this chart.
| Category | ARPA Bank Balance | Obligated Funds | Unobligated Amount |
|---|---|---|---|
| Housing Rehabilitation | $1,630,000 | $1,630,000 | |
| Public Health | $500,000 | $500,000 | |
| Workforce Development | $150,000 | $150,000 | |
| Small Business (SCTC) | $400,000 | $400,000 | |
| Parks & Greenspace | $1,446,559.30 | $1,446,559.30 | |
| Public Safety Facilities | $727,023.29 | $252,623.00 | $474,400.29 |
| Sidewalks and Streetlights | $500,000 | $500,000 | |
| Water & Sewer / Stormwater | $425,300 | $328,470 | $96,830 |
| Non-Profit Application | $250,000 | $250,000 | |
| Unallocated | $44,713.69 | $20,000 | $24,713.69 |
| Net Interest Income | $154,026.47 | $154,026.47 | |
| $6,606,632.19 | $601,093.00 | $6,005,539.19 |
During the October 3 meeting, the council made several approvals to use ARPA funds. They include the following:
- $300,000 to Connecting Henry for assistance programs to aid homeless populations in McDonough, and
- $349,000 towards the purchase of two trolley buses.
This leaves the city with a balance of $5,356,539 to obligate. Though the funds are set-aside in various categories, the city can move funds between categories to allocate them. For example, the council moved $330 thousand from housing rehab to stormwater in September. This was to hire an engineering group to design stormwater improvements in the Blacksville community.
Possible Uses
Federal law allows the city to reimburse itself using ARPA dollars for previous expenses made since March 2021. This would then transfer ARPA funds to the city’s general fund, stormwater account or SPLOST depending on the reimbursement. Clark shared with the council his first priority is to look back at city expenses for eligible reimbursements. He expressed confidence the city has spent more than the amount in question, $5.4 million, on eligible purchases since 2021.
Another option would be to apply the remaining funds to the city’s ongoing water treatment plant upgrade. That project has a total cost of about $10 million dollars. Clark described this as a “fail-safe” option to ensure the city obligates all funds.
Discussion among the council members focused on potential areas to spend the funding. One area of discussion was housing rehabilitation. This category is intended for the city to assist low-income families with home repairs. It would complement existing programs found within Community Development Block Grant (CDBG). The city must contract with private contractors by December 31 for this work to happen. Otherwise, the dollars would need to move to another category.
Council members also asked about sidewalks and streetlights. According to city staff, they are compiling an inventory now of sidewalks and streetlights within the city. They can then look towards improvements after those inventories are complete.
Finally, the council discussed the rise of homelessness in the city. To help provide assistance, the city approved $300,000 to go towards Connecting Henry. They are a local non-profit who can help distribute these funds directly to recipients.
Clark said next steps would include regular updates with the city council. This is so they can obligate the funds before year’s end.
Featured image shows McDonough City Hall. Clayton Carte photo.
