November 14, 2021 IN: News

How Local Governments Are Using Their Fiscal Recovery Funds

fiscal recovery funds

Earlier this spring, local governments in Maryland started receiving checks from the federal government. Municipalities all over the United States are benefitting from an infusion of stimulus funds. Some might be wondering why they received this money and what to do with it. The American Rescue Plan (ARP) Act was signed into law on March 11, 2021 to fight the negative public health and economic impacts of the Covid-19 pandemic. The plan includes $350 billion in emergency funding for state, local, territorial, and tribal governments. This funding, known as the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), seeks to support local Covid-19 response efforts, replace lost revenue for eligible governments, support economic stabilization of households and businesses, and address public health and economic challenges.

Through the SLFRF, state and local governments in Maryland will receive a total of $6.355 billion to address critical issues facing their communities. The funds were partially distributed beginning in May 2021, and the remainder will be delivered in June 2022. The ARP gives a great deal of flexibility to governments for spending with a few general guidelines: the funds may be used to support public health expenses, address negative economic impacts caused by the public health emergency, replace lost public sector revenue, provide premium pay for essential workers, and invest in water, sewer, and broadband infrastructure.

Some governments are understandably cautious about how best to proceed with these new resources. Chestertown, MD, for example, has formed a committee to oversee and track usage of funds to ensure careful compliance. Anne Arundel County launched a public community survey to gain feedback from residents before committing any of their funding dollars.

The City of Frederick already has a plan in place. With $10.6 million in aid to spend, the City has put forth a proposal that allocates funds to Sewer and Water Infrastructure ($5.8 million), Disproportionally Impacted Communities ($425,000), Negative Economic Impact ($600,000), and Public Health ($3.75 million). The City will submit the proposal to an Aldermen committee for approval before moving forward.

Frederick County has also come up with a spending plan for their $50.4 million.  The County sought community feedback via roundtable discussions and public surveys and has put together a proposal for stakeholders to review and approve. They intend to spend their funding in the areas of Public Health ($12.4 million), Negative Economic Impact ($3 million), Disproportionately Impacted Communities ($5 million), and Revenue Replacement and Continuity of Government Services ($30 million). The County is currently evaluating projects that fall under the Continuity category.

The Fiscal Recovery Funds deliver an important infusion of resources to many small governments and municipalities. The program provides incentive to tackle costly infrastructure improvements for the betterment of communities everywhere.

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In an effort to keep you informed of the latest federal funding of wastewater infrastructure, we’ll be updating soon with more information on resources available to local communities.