Gogebic County Board studies ARPA funds

By ZACHARY MARANO

zmarano@yourdailyglobe.com

Bessemer — The Gogebic County Board of Commissioners heard a presentation from a policy consulting firm on the spending of American Rescue Plan Act funds at their regular meeting in the Gogebic County Courthouse on Wednesday.

Tim Dempsey, vice president of Public Sector Consultants, a public policy consulting firm in Lansing, attended the regular meeting virtually and answered board members’ questions on the federal stimulus bill.

He said that two unique aspects of ARPA that stand out: there is money going to every single jurisdiction in Michigan and the program allows them to distribute money to other entities and not just spend it on their own needs.

Dempsey said that there are four eligible ways for jurisdictions to spend ARPA funds – responding to public health emergencies and negative economic impacts on industries including tourism, travel and hospitality; premium pay for essential workers during the COVID-19 emergency, with a focus on lower-paid employees such as janitorial staff; the provision of government services to the extent impacted by a reduction in revenue; and investments in water, sewer or broadband infrastructure.

Dempsey said that the third category – the provision of government services to the extent there has been a reduction in revenue– provides the greatest flexibility for jurisdictions in stimulus money. He said that ARPA calculates revenue loss by finding the difference between the jurisdiction’s actual revenue and a federal growth rate over the last three fiscal years.

“The formula doesn’t necessarily align with the actual financial loss of revenue, if there was one, because it’s based on using an inflation factor of 4.1% per year, which for a lot of jurisdictions in Michigan is higher than their growth rate,” Dempsey said. “In other words, we’ve had organizations in the state that demonstrated a revenue lost with the federal calculation but don’t really have a shortfall in the budget.”

Board member Joe Bonovetz asked if the calculation includes all revenue and Dempsey said that it is fairly comprehensive, but that there are certain exceptions such as federal grant dollars. He also said that with related entities such as road commissions and ambulance authorities, it depends on how those particular entities function.

Dempsey said that Public Sector Consultants encourages their clients to think strategically about using this money and not spend it on things that they cannot sustain in the long term. He said that funding must be obligated by 2024 and projects completed by 2026.

Successful outcomes of ARPA funding include dynamic places that inspire well-being, safe and accessible housing and universal broadband access and equity. Dempsey said that his consulting firm has seen a lot of interest in broadband access in their clients and rural counties such as Gogebic.

Bonovetz said the board of commissioners has been discussing spending their ARPA funds on repairing leaking roofs in their buildings and other projects. Dempsey said that these projects must be connected to the revenue loss or public health. For example, he said that upgrading a heating, ventilation and air conditioning system to provide cleaner air could be allocated under public health.

He added that ARPA is not the only source of funding for Gogebic County and that the state of Michigan has $6 billion in their own ARPA funds. The Economic Development Administration has $3 billion in programs and the Infrastructure and Jobs Act has $1.9 trillion. He said that his consulting firm could help them navigate these grant programs and make strategies.

Board Chair James Lorenson requested that Dempsey work together with County Administrator Juliane M. Giackino to prepare a proposal on spending ARPA funds for the board of commissioners to consider. Dempsey said his firm will work with the county administrator and that he can answer any further questions.

Lorenson said that he received a letter from the Tuscola County Board of Commissioners to amend the Open Meetings Act so that board members can participate remotely. A motion to submit a resolution with the changes was approved 6-1, with Bonevetz voting no.

Lorenson also that Beacon Ambulance Service has requested a three-year extension so can proceed with significant capital expenditures in equipment and vehicles. He said that Beacon requested an increase of 5% in the first year and 3% in the second and third years. He said that these percentages were not out of line with the medical cost of living inflation rates. A motion to sign this contract was approved unanimously.