photo by: Josie Heimsoth/Journal-World

Douglas County commissioners heard a presentation on American Rescue Plan Act funding on Wednesday, November 7, 2024.

Douglas County commissioners learned on Wednesday that only around 72% of the federal funding they distributed through the American Rescue Plan Act has been utilized, and they approved measures to maximize the money’s impact before the end-of-the-year deadline to spend it.

In July 2022, the county awarded $23,747,378 in ARPA funding — which is emergency funding to help state and local governments respond to and recover from the COVID-19 pandemic — to support 51 projects for internal and external partners.

After distributing the awards, county staff developed tools for partners to adjust the original projects’ scope or budgets, since some of the projects have come in over or under budget and some may not be completed or obligated before the approaching deadline on Dec. 31, 2024, according to the memo in the agenda.

Finance Manager Brooke Sauer told the commissioners that by the third quarter of 2024, $17,186,975 of that funding had been spent. She asked them for direction on how remaining funds would be handled moving forward.

Following the presentation, county commissioners approved several options for county staff to either reclassify funds or allocate unused funds before the deadline to make the most of the federal award – including authorizing the county administrator to enter into contract extensions for awards of ARPA funding; create and sign interagency agreements or Memorandums of Understanding, also known as MOUs, that commit the funding from ARPA to specific purposes or projects; and reallocate funds that can’t be used before the end of December.

Sauer reported that 66% of ARPA funds in the county are currently being allocated for external, community-based projects. Sauer said she met with external partners with an interest in extending the original grant agreement by a year, and said that the agencies have demonstrated their ability to complete the projects within the extension.

“I’m very confident that these projects will be completed within that one year,” Sauer said. “And most of those projects are either currently under construction or there’s a construction contract underway.”

“That will buy us a little bit of time if we do have to go through a reallocation process at a later date, which (the) Treasury allows us to do for contracts that are canceled or they can’t be completed for one reason or another,” Sauer said.

photo by: Josie Heimsoth/Journal-World

Finance Manager Brooke Sauer on Wednesday, November 6, 2024.

MOUs would be for internal projects where the county knows what needs to be done but hasn’t established a contract yet, though they intend to have one in place. With this agreement, work may commence after the December 2024 deadline, but the money must be spent by the end of 2026.

“A good example of this would be one of the open space projects that the commission was approached about in late summer for some Lone Star Lake improvements,” Sauer said.

“About half the money for the allocation that was made at that time is already under contract, but the rest, the staff is going to be completing that work, so we’ve got some commodities that we still need to purchase,” Sauer said.

Currently, there is approximately $5 million of obligated funding for awards – meaning they will not be available for other uses – distributed by the county, and around $1.5 million of funds that need to be reclassified. Sauer said that reclassified funding could be used to fund projects like open space initiatives or other projects through the capital improvement plan.

Commissioner Patrick Kelly expressed concerns that if these projects aren’t funded with ARPA dollars, they may later seek county funding. He also noted that any ARPA funds left unspent would be returned to the federal government.

“There’s no way to refund Douglas County taxpayers this money or reduce the (property tax rate) with this money,” Kelly said.

Kelly said this isn’t a small amount of money that is still left at the end, and he really hoped that the partners and departments would have been able to spend the funds by the 2024 deadline.

“I understand they’re not, but I think that creates a little bit of an awkwardness here as we’re trying to spend dollars rapidly,” Kelly said.

Commissioner Shannon Reid said that she expected that there would be a point where the county would need to reassess where it was at with the funding and think about reclassification.

“I appreciate staff’s smart foresight to know to sort of build a timeline within the federal government’s timeline, to make sure that we didn’t find ourselves in a rushed situation of we’re worried that we’re leaving money on the table, and we’re sort of not thinking through how to leverage it to the best of our ability,” she said.

The decisions with ARPA funding were made before Commissioner Karen Willey was elected to the commission in 2022. Willey said that there’s a lot of community conversation that has to go into the open space funding and doing that well.

“I, for one, was not interested in putting a community taxpayer mill levy to the open space project until we had kind of fleshed out what some of that could be, and the ARPA funds were the perfect way to get that to happen,” Willey said.