by CHRIS ROGERS
Tens of millions of dollars in federal pandemic recovery funds will start flowing to local governments this month, though most are just beginning to discuss how to use it. Separately, some local businesses and nonprofits were able to take advantage of grants for shuttered venues and new rounds of Paycheck Protection Program (PPP) loans, while federal relief money for restaurants dried up in less than a month.
Counties, cities, schools, and even townships are getting windfalls from the most recent relief package, the American Rescue Plan Act (ARPA), with $9.8 million for Winona County, $5.7 million for Trempealeau County, $3.7 million for Winona Area Public Schools, and $3 million for the city of Winona. For municipalities, payments will come in two halves, one this month and another within a year.
In Winona and Winona County, ideas for the money’s use range from covering the governments’ own pandemic-related costs to tackling new infrastructure projects, such as sewer and water upgrades or expanding rural broadband, aiding local businesses and families, and boosting child care. Winona Area Public Schools administrators are drafting plans to use the funds on, among other things, student mental health programs and adding staff positions to support minority students.
However, local leaders are still waiting for more clear rules from the federal government on how the money may be used. Responding to the public health emergency, assisting people economically hurt by the pandemic, making up for losses in government revenue, and “necessary investments in water, sewer, or broadband infrastructure” are all listed as eligible uses, but sometimes the devil is in the details. “We haven’t made a whole lot of plans for those funds just yet because they’re still coming forth with the guidance,” Winona City Manager Steve Sarvi said. “Even [training sessions] are offering some contradictory advice on how the funds can be used, so we need to wait and see what that is,” Sarvi explained.
Both Sarvi and Winona County Administrator Ken Fritz expected more detailed guidance later this summer, possibly after the money has already arrived. “Oh yeah, I definitely believe we’ll have it in the bank before we know how we can spend it,” Fritz said. Sarvi added, “Sometimes, it’s even deposited in the bank and you’re like, ‘Hey, let’s get going.’ But no, don’t touch it. We want to make sure we don’t do anything we have to undo later.”
Arcadia City Administrator Chad Hawkins said that with a roughly $40-million levee-building project and $8 million in planned storm sewer upgrades, the city has no lack of infrastructure spending needs. With projects like that, the city’s expected $300,000 in ARPA funding won’t go far, but every bit helps. A final decision will be up to the City Council, but Hawkins said, “I think some way of using those funds toward those projects is probably a good place for them.”
ARPA also included fresh PPP funding and new assistance programs for businesses hurt by the pandemic. “I do know there are a lot of people that have taken a second draw of PPP, and that’s helped a lot of local businesses,” Winona Area Chamber of Commerce President Christie Ransom said. According to the Small Business Administration (SBA), a pool of grants for shuttered theaters, music venues, and other event spaces is still accepting applications, but a set of grants aimed at saving eateries and bars ran out of funds within less than a month.
After allocations of early PPP funds were marked by social disparities, the federal government prioritized the Restaurant Revitalization Fund for businesses owned by “women, veterans, or socially and economically disadvantaged individuals” for the first 21 days. Then the program ran out of money and closed to applicants entirely. “That funding was depleted really swiftly before it was opened up to everyone,” Ransom noted. “[Restaurants] are all hurting so bad,” she said. “And I know that intention was good for those that were marginalized or didn’t get funding in the beginning, but they are all hurting equally.”
Some congressional leaders have discussed replenishing the Restaurant Revitalization Fund; Ransom expressed hope that they would so more people could apply.
Aid for businesses and individuals is explicitly listed as an eligible use of the ARPA funds for local governments. Asked if the city of Winona would consider dedicating some of its funds to such assistance, Sarvi said, “Yeah, certainly we would look at that. I think the county is trying to cover the social aspects, but as far as businesses, we would certainly entertain looking at that and partnering perhaps with the chamber to get some of those funds out there.”
How much will the county focus on aid? “I don’t think it’ll be as directed to businesses and individuals like it was last time,” Fritz responded, referring to the county’s decision to dedicate some of last year’s Coronavirus Aid, Relief, and Economic Security (CARES) Act funds to help local businesses and residents. “There’s been a lot of other programs, whether it be unemployment or other things,” he said of aid for individuals. “I don’t think it will be as focused on businesses, but there might be more looking at housing, possibly, if there’s anyway to support more affordable housing or things that would spur more interest in that somehow.”
Ransom had a suggestion for local officials looking for ways to spend the money. “We’re kind of hoping that some of that can go into child care and programs of that nature,” she said. “It would really help our workforce,” she added. A longstanding shortage of affordable child care, especially for infants, has been exacerbated by the pandemic, pulling many parents out of the workforce because they cannot find child care.
“We’ve had some council members weigh in that they want to use [the ARPA funds] on streets,” Sarvi noted. However, because of contractors’ schedules, ARPA-funded street repairs might have to wait until 2022, he said.
Meanwhile, WAPS is slated to receive $3.7 million in Elementary and Secondary School Emergency Relief (ESSER) funds, according to the Minnesota Department of Education (MDE). Lewiston-Altura School District is expected to get $955,000, and other local districts and charters will get allocations, as well. Allowable uses of the funds range from responding to the pandemic to giving school leaders “the resources necessary to address the needs of their individual schools” and helping disadvantaged students, MDE reports.
WAPS Superintendent Annette Freiheit and Finance Director Kristy Millering said the district was still drafting a three-year plan for how to use the funding, including boosting mental health and counseling staff and possibly hiring a cultural liaison to assist students of color. “I’m committed to using our ESSER funds to support our students as directly as possible,” Freiheit said. She added, “Our work on equity is another piece that I would like to dedicate that funding to.”
However, ESSER doesn’t last forever, so any new positions or programs funded by it would eventually have to find a new funding source or disappear. The short-term funding gives WAPS a chance to try some new programs, gather data on how effective they are, and then make the case for gradually incorporating them into the general fund budget, Freiheit said.
Municipalities, counties, and schools will have a few years to spend the ARPA funds, unlike last year’s CARES Act — where, by the time the feds gave clear guidance on how the money could be used, local governments were scrambling to spend it before the deadline. Once more guidance comes in, Winona County will have time to consider its options without any need to rush, Fritz said.