“By passing the American Rescue Plan, Congress provided the flexibility local governments asked for to recover from the pandemic and fund essential needs,” said U.S. Sen. Sherrod Brown, D-Ohio. “Ohioans need to know that the funding Congress passed is being used properly, which is why we implemented strict oversight across various federal agencies.”
Out of $5 trillion spent nationwide since the pandemic began, up to $400 billion has been stolen, said U.S. Sen. Rob Portman of Ohio, the ranking Republican on a Senate committee that recently held a hearing on COVID relief oversight.
“The unprecedented speed and amount of spending ... has made oversight of these funds incredibly difficult,” Portman spokesperson Mollie Timmons told the Dayton Daily News. “Sen. Portman believes more work needs to be done to identify the scope of fraud, recover stolen money, and implement reforms to prevent fraud from occurring in the first place.”
The American Rescue Plan, passed by Congress last year, makes $718.7 million available to more than 200 local governments in our nine-county region. This follows more than $300 million already spent by local governments as part of the CARES Act passed in 2020.
Hundreds of millions more flowed into the region through other programs, such as expanded unemployment, the Payroll Protection Program and Restaurant Revitalization Fund.
This story digs into how CARES Act funds were spent and the process governments are using to determine how to spend ARPA funds. Future reporting will examine this spending in closer detail.
The American Rescue Plan Act, or ARPA, was intended to respond to the COVID pandemic. U.S. Treasury in January issued final guidance on how the money can be used, giving governments “substantial flexibility.”
Governments can replace public sector revenue lost due to the pandemic, respond to health and economic impacts of the pandemic, and invest in water, sewer and broadband, among other things.
Examples of ineligible expenses include building jails, offsetting tax cuts, paying down debt, replenishing financial reserves or paying legal settlements.
The $138 million Dayton is getting in ARPA funds — the most in the region — has been heralded as “transformative” by Mayor Jeffrey Mims Jr.
It’s the largest federal grant in the city’s history; more money than the city expects to collect in income taxes this year.
“I am tickled to be the mayor at the time this stuff is happening. If we don’t do anything else but manage this process, it’s going to be a major, major benefit,” Mims said.
City officials came up with a proposed plan for spending the money in December after a monthslong public input process that included a community survey, multiple listening sessions and a public solicitation of suggestions that resulted in $448 million in proposals.
A Community and Neighborhood Development Advisory Board scored the proposals using criteria including sustainability and social benefit. They narrowed the list to 35 community projects totaling $19.2 million and seven businesses totaling $2.5 million. The city is doing another round of reviews before making final awards in the summer.
Dayton’s ARPA plan:
But critics, including the Dayton Unit NAACP, say the city’s process was rushed and unfriendly to entrepreneurs and small nonprofits who might have had great ideas but couldn’t navigate the confusing process.
“We really feel that there should have been more time expended for people to apply,” said Dayton NAACP President Derrick Foward. “From a timing standpoint, there was simply no need to rush the process when you had two years to turn it in.”
“The city still has time to reopen the process,” Foward said.
Under the current plan, the biggest focus is $55 million for neighborhood improvement. With this and other funding, the city plans to tear down all 1,025 properties on its nuisance property list. Another $18.7 million is budgeted for building and repairing homes. These efforts are focused on the neediest census tracts.
Plans also include improvements to sidewalks and parks, a racial equity fund and supports for Black- and brown-owned businesses and an $11 million joint police-fire station. The city is also setting aside $36 million to cover basic city services in the face of lost revenue because of the pandemic.
“That allows us to make sure we take care of basic services,” Mims said.
Still working on it
Local governments have until 2024 to spend ARPA funds. And most governments are nowhere near as far into the planning process as Dayton.
Butler County will get $74.4 million, the third highest in the region, and county commissioners there are working with staff and holding work sessions to winnow down a list of nearly $150 million in suggested projects.
Miamisburg staff say they plan to discuss uses for the $2.1 million the city will get at an upcoming meeting.
Fairborn is gathering feedback from the community via a survey and town halls before city council votes on a plan to spend its $6.8 million.
Of the more than 750 respondents so far to Fairborn’s online survey, the highest priority is “Community health, wellness and quality of life by investing in physical and mental health.”
Fairborn considered using ARPA money to pay for a mural on the side of its library, but after some community criticism, decided to use general fund money. At this point no ARPA money has been spent.
“One of the goals is to use the money for projects that benefit the most number of people in the community as possible,” Fairborn spokeswoman Meghan Howard said.
Warren County Commissioner David Young said with the exception of small business assistance during the shutdown, most of the COVID stimulus has been not only unnecessary, but harmful by increasing the national debt and fueling inflation.
“It’s absolutely ludicrous that the federal government is throwing money around like that,” he said.
Young said he would have liked to turn down ARPA money, but if the county did, it would have just been redistributed to some other government.
“I don’t want my folks to have to pay for it and not get any benefit from it,” he said.
So now Warren County commissioners are looking at a list of about $60 million in proposals as they discuss how to spend $45.6 million. Ideas include $6.9 million for child care costs for working parents under 200% of federal poverty; or contributing $3.5 million toward an ice and multisport arena.
Warren County also used CARES Act and ARPA funds to cover county services and personnel, bolstering its already healthy reserves. This helps cover the loss from the county giving all property owners a year off from paying county property taxes this year.
Governments forego money
In our area seven small local governments in Butler, Champaign, Darke and Warren counties didn’t apply for the funds.
The largest not applying was Union Twp. in Champaign County, which passed on $215,577 in ARPA funds. This would have been a significant portion of the township’s $1.7 million annual operating budget.
Chuck Dooley, president of the Union Twp. trustees, said the program rules changed several times, and they didn’t want to risk using the money improperly and getting in trouble.
“We could spend the money, don’t get me wrong,” he said. “We’re not a huge township. It was probably in our township’s best interest not to mess with it.”
Final program rules gave governments broad discretion on how to use it, basically allowing them to consider the first $10 million a reimbursement for lost revenue and allowing them to use it for any legal government purpose. All but 11 local governments got less than $10 million.
Greene County is declaring $10 million of the $32.8 million in ARPA money it will getas “revenue replacement” under this rule, and putting it toward building a jail, which would otherwise be ineligible.
The second-largest use Greene County will use ARPA funds for is $9.6 million for broadband expansion. County commissioners on Thursday voted to spend another $7.3 million on county projects and nonprofit grants. The county has about $3.1 million left to allocate.
Springboro officials moved relatively quickly last year to spend $759,860 in ARPA funds. The city covered one month of water, sewer and trash bills citywide in May 2021 — benefiting 6,400 residential properties and 600 businesses.
“The city council deliberated and felt it was the most direct, efficient and effective way to provide some immediate financial relief to the entire community by utilizing the federal dollars for their intended purpose,” the city said in a message to residents, urging them to use the money they save to support local businesses and charities.
City officials have not decided how to use the rest of the $2 million they will get.
‘We’re going to take our time’
Darke County will get $9.9 million. County Commission President Matt Aultman said they intend to spend about $500,000 putting county recorder files online, which will improve service and decrease people coming into the office. They are also looking at hands-free controls for the county jail.
But most of it will go to regular county services, which will free up money in the general fund and give them time to consider how best to use it.
“We’re going to take our time. We’re not going to rush into spending this stuff,” Aultman said.
Kettering city commission in March agreed to use the $13.9 million in ARPA funds to cover public safety payroll, simplifying the federal reporting. The money saved from the general fund will go toward:
- $2 million in yet-to-be-determined community programs such as mental health, hunger and housing.
- $4.5 million for capital equipment such as a medic, fire engine and heavy equipment.
- $7.3 million for capital improvements such as bridge, street, stormwater and park projects.
“The city of Kettering will utilize ARPA funds to assist those who were impacted most by the pandemic,” said city spokeswoman Mary Azbill. “Emphasis is also placed on getting back on track with the capital equipment and capital improvement programs that were delayed or cut due to the uncertainty of the pandemic.”
Infrastructure common use
The Ohio Municipal League at the end of 2021 surveyed governments across Ohio about how they intend to spend ARPA funds. More than a third of respondents hadn’t decided.
Of those who had decided, the most common immediate use was infrastructure improvements such as water and wastewater systems. Another common use was supporting community programs and nonprofits.
Ohio Municipal League Director Kent Scarrett said while some governments are looking at big, transformational projects, many are planning more mundane but crucial or deferred investments in water and infrastructure.
“It really depends on the needs of that community,” he said.
Much of the funds will maintain public services otherwise threatened in many cities losing income and lodging taxes during the pandemic, and facing inflation.
“It really was a significant lifeline for communities to stabilize budgets and not lay off municipal employees,” he said.
Huber Height City Manager Bryan Chodkowski said the city plans to spend its $4 million ARPA allotment on water and sewer expansion to the east. It’s something the city had planned to do, he said.
“We knew what we wanted to do, we didn’t know how we wanted to pay for it,” he said.
Xenia plans to spend its $2.8 million to cover revenue losses and pay police and fire salaries.
“We’re slowly climbing back up to where we were pre-pandemic,” City Manager Jared Holloway said of income tax revenues.
The money they were going to spend on police and fire salaries will be set aside to guard against inflation, he said. They have had requests from other groups for money, Holloway said, “but there’s been no aggressive conversation” about how to spend freed-up funds.
Montgomery County is spending the majority of its $103.3 million from ARPA on county services. The largest single expenditure, $29 million, will cover jail staff salaries over the next two years, followed by $18.5 million for personnel costs in other county agencies such as juvenile court, public health, the coroner’s office and developmental disabilities. More than $20 million is budgeted for renovations and improvements to county facilities.
“These are necessities for us to continue operating should there be another pandemic or should another crisis come our way … to make sure we can continue to serve the vulnerable populations we serve,” Montgomery County Commission President Carolyn Rice said.
Of course, the county must pay jail salaries anyway. Asked what the county will do with the freed up general fund money, Rice said commissioners have no specific plans but it leaves them “well positioned for the future.”
Montgomery County’s use of ARPA differs from how it used $92.7 million it received in CARES Act money. Most of that money went to direct aid: $17.9 million to nonprofits, $13.2 million to small businesses, $24 million to educational institutions, and $14.3 million to housing, utility and rental assistance.
“We knew that the economic situation was serious and we needed to use those dollars in all those different sectors,” Rice said. “It was pretty much totally a shock to the whole economy that restaurants and small businesses were all of a sudden just shutting down and not knowing then how long this would last, giving them money to help with how COVID impacted their situation, so hopefully they survive.”
Local governments were awarded more than $300 million from the CARES Act. The money had to be spent in 2020 and 2021. Montgomery County received its money directly from the U.S. Treasury. For other local governments, it was passed through the state. Those governments had a mid-February 2022 deadline to report to the state how it was spent.
The Dayton Daily News obtained those reports using Ohio public records law, and made detailed reports by community available on our website.
An analysis of that data found that across southwest Ohio, the most common use of CARES Act funds — totaling more than $150 million — was for employee payrolls, mostly for health and public safety staff. That money maintained government payrolls despite revenue losses, and bolstered many governments’ reserves.
After that came public health expenses, such as office renovations, disinfection and equipment. This totaled $21 million.
Small business assistance
The next largest category, totaling $13.7 million in our area, was for small business assistance. That’s in addition to the $13.2 million spent by Montgomery County for that.
Rules for these programs varied by community. Kettering required applicants to demonstrate a 30% decline in sales from the previous year, and to retain at least one low- to moderate-income employee. Kettering gave $5,000 grants to 23 businesses.
Dayton provided $309,337 in grants of up to $15,000 for businesses to make physical improvements to protect staff and customers. This included building or expanding patios — in one case buying outdoor igloos for more than $1,000 each. At least one restaurant has since closed its storefront.
Montgomery County provided grants of $10,000 each to more than 1,300 small businesses. Program rules initially said recipients couldn’t get other federal aid, such as PPP, but that was later revised.
Many businesses benefited from more than one program. The Dayton Daily News cross-referenced recipients of local business programs, the Payroll Protection Program and the Restaurant Revitalization Fund and found numerous businesses appearing on more than one list.
Lebanon Mayor Mark Messer got a $5,000 grant from Warren County and $34,400 in PPP funds to cover losses at his personal training gym in Lebanon, MesserFit.
“It basically kept us from going bankrupt,” he said. “When the government shuts down a service business for 10 weeks, that’s no small feat to try to overcome.”
Lebanon gave out grants of up to $1,800 to 27 businesses. Messer didn’t apply for that because he wanted to avoid any conflict, he said. Of the 27 businesses who got aid, 16 reported they applied for other aid as well.
Messer said Lebanon is considering offering another small business or nonprofit assistance program with the roughly $500,000 left in ARPA funding. Lebanon spent most of the $2.2 million it received on utility infrastructure, replacing a bridge for the tourism railway, downtown restrooms and park improvements.
Dayton Daily News Investigates
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