How some Michigan communities are using ARPA dollars

The lens that leaders of municipalities throughout Michigan are looking through is prompting them to take a “glass half full, glass half empty” approach depending on the amount of money they received through the American Rescue Plan Act.

Michigan’s 1,724 cities, townships and villages shared in a $644 million pool of funds that were part of a $6.5 billion allocation the state received through ARPA.

The divvying up of this pool of federal money was based on the population size of each municipality, which are referred to as NEUs (Non-Entitlement Units). These NEUs are defined as “local governments typically serving populations of less than 50,000. NEUs include cities, villages, towns, townships, or other types of local governments.”

At the low end of the spectrum, Southfield Township in Oakland County received $1,361. At the higher end, Holland Township in Ottawa County received $4,049,626, according to the American Rescue Plan Act Eligible Funding Amounts for Non-Entitlement Units

In between these high and low allocations are more rural municipalities like the village of Cassopolis in Cass County, which received just over $200,000, says Emilie LaGrow, village manager. While not by any means a “windfall,” the ARPA dollars offset additional monies that would be coming out of the village’s general fund budget to cover the cost of a $1.5 million road improvement project already in the works, she says.

The streetscape in downtown Cassopolis.“We had a road project that we already had planned, and we were getting ready to kick it off, so we put it all towards that,” she says of the ARPA funds.

“We will complete sidewalks, sewer, stormwater drains and the actual road. We know there were specific things we could use that money for. Infrastructure is something we utilize the funds for.”

According to the Government Finance Officers Association, ARPA funds can be used:
  •      As revenue replacement for the provision of government services to the extent of the reduction in revenue due to the COVID-19 pandemic, relative to revenues collected in the most recent fiscal year prior to the public health emergency
  •     COVID-19 expenditures or negative economic impacts of COVID-19
  •     Premium pay for essential workers
  •     Investments in water, sewer and broadband infrastructure

The University of Michigan in Ann Arbor reported in a new survey of Michigan’s local government leaders conducted last spring that the top spending priorities for American Rescue Plan Act funding are on capital improvements, infrastructure, and public safety.
The majority of communities, such as Cassopolis, with populations of less than 10,000 were overwhelmingly using their ARPA funds for capital improvements, says Shanna Draheim, director of Policy Research Labs for the Michigan Municipal League.

The ARPA dollar amounts that communities received really varied, she says.
This led Brad Kaye, city manager for Midland, to question the level of funding the city received. Located in Midland County, the city received $5,376,869.

Kaye says under the ARPA funding model the city of Midland “faced a significant disadvantage over many of our neighboring communities, as well as those across the state. Although we are an entitlement community for HUD (CDBG) funding, we receive very little such funding on an annual basis given the financial and demographic profiles of city residents. 

Since ARPA funding was distributed, at least largely, using CDBG formulas, Midland received significantly less funding than most other entitlement communities. 

“Specifically, we received $5,376,869.  While certainly helpful and appreciated, by comparison, the nearby cities of Bay City (smaller population) and Saginaw (marginally larger population) received ARPA funding approximately six times and 10 times the amount received here in Midland,” he says. “Our needs, whether they relate to public facilities, infrastructure or almost any other public matter, are no less than the needs of these other communities.”

 Kaye says the city has largely chosen to strategically use ARPA funds to replace lost revenues (due to Covid restrictions) at city venues including the Civic Arena, Plymouth Pool, and Currie Golf Course.

“We have also chosen to use funds towards one-time projects in need of funding, including Riverside Place Senior Living Facility and Barstow Airport,” he says. “A portion of the ARPA funds remain to be allocated at this time but will be utilized in a similar manner moving forward.”

 While the use of ARPA funding has been helpful to the city, Kaye says, it has not allowed the municipality to undertake any transformational projects as was first envisioned when ARPA was developed. 

“Instead, it has allowed us to stabilize budgets heavily impacted by Covid closures and help a few select city facilities that struggle with their capital improvement needs.  External agencies and program initiatives that are underway or under consideration in other communities were never able to be considered here given the funding limitations.”

While acknowledging that these dollars are “not going to change the world or community. For moderately sized to larger communities, it is a significant amount of money to be able to get in there and make infrastructure improvements and fund programs and services,” Draheim says.

LaGrow says Cassopolis doesn’t get a lot of “road dollars and we have to use general fund dollars to pay for road improvements. When we have an influx of a couple thousand dollars, it allows us to keep the money in our general fund. We had additional funds budgeted to do more local roads that we wouldn’t have been able to use otherwise.”

“For us, the amount was so small and what we could use it for was pretty minimal,” she says. “It made the most sense to move it towards projects we already had going on the books. $200,000 is not enough to start brand new programs or really do something different. It will go toward an infrastructure project (that) residents really need.”

 The village of Spring Lake in Ottawa County also will use its ARPA allocation for infrastructure projects, says Christine Burn, Spring Lake Village manager. Spring Lake received $1.3 million in ARPA funding.

However, Draheim says the way communities are choosing to spend their ARPA dollars continues to vary.

 “Some communities used it for hazard pay and health and safety related stuff or helping other areas of their community with small loans,” she says.

 Battle Creek City Commissioners set aside $8 million of the $30.5 million the city received in ARPA funding for use by community organizations.

 “City Commissioners determined that they wanted to set aside a certain amount of funding to support community projects, the city started holding Town Halls last year and collected project ideas. As part of the Town Halls, we encouraged people to share their ideas and any projects for which they wanted funding for,” Ted Dearing, assistant city manager for Battle Creek, says in an earlier story published in Second Wave Southwest Michigan.

The funds were focused on the projects of nonprofit organizations that were providing critical services to those impacted by the pandemic, Dearing says.

 Draheim says this is an example of the far-ranging uses of these dollars. She says, “Some of our communities allowed outdoor dining and used some of that ARPA funding to put tables and chairs out there. Other communities have done things related to community health, programs and services among community improvements. There was a lot of attention on parks and recreation projects because COVID made people realize how important outdoor spaces are.”

The city of Gaylord in Otsego County used the close to $390,000 it received to make infrastructure improvements to support a luxury RV park dedicated to visitors to the community, says Kim Awrey, Gaylord city manager. This is an example of using the funds for a larger purpose.

 Awrey says the RV park is in an area that has undersized utility lines, which have been upgraded.

 “There’s an apartment complex out there as well. Construction on that started during COVID and we were pretty much at capacity, so before the RV park could hook into anything we needed to do those upgrades,” she says.

The RV park will have nicer amenities including yurts and bouncy houses and full hookups, Awrey says, adding that the developer behind the project saw this as a niche worth filling.

Gaylord draws thousands of tourists in the summer and winter.

In May, a tornado packing winds of up to 140 mph left a path of destruction in the city of 4,200 people. Located about 230 miles northwest of Detroit, Gaylord is a popular destination for skiers and snowmobilers in the winter and golfers in the summer.  Awrey says it is not uncommon for the city’s population to increase to 40,000 people.

 “We have to provide infrastructure that can accommodate that number of people. Everyone saw the devastation but we’re just trying to get the message out that we’re still open and still rely on that tourism,” she says.

Looking at it from this angle, she says the ARPA funds were “very helpful.”

Jane Parikh is a freelance reporter and writer with more than 20 years of experience and also is the owner of In So Many Words based in Battle Creek. She is the Project Editor for On the Ground Battle Creek.
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