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Nearly a year after receiving its first batch of American Rescue Plan Act funds that could be used to mend the economy, bolster vaccination campaigns or aid local nonprofits, Rutherford County has no plans for how to spend the money.
Rutherford’s ARPA money has not been used — despite the U.S. Department of the Treasury distributing the first half, roughly $6.5 million, in May 2021. County Manager Steve Garrison said the county lacks the administrative capacity to handle such a large grant.
“I think probably every county and town, for the most part, is floundering because of uncertainties,” Garrison said. “Anytime you’re dealing with federal funds, there are a lot of regulatory requirements, a lot of contractual requirements that you have to meet.
“It’s a lot, and to make sure that you’re checking all the boxes correctly and can meet an audit requirement, not only locally, but federally, it’s pretty daunting.”
Other counties without ARPA plans
While navigating the funding can be a formidable task, smaller Western North Carolina counties receiving far less ARPA funding than Rutherford, such as Graham, Swain and Cherokee, have already established some definitive plans for funds.
The only Western North Carolina county receiving more ARPA funds than Rutherford that has not named specific projects or programs for the money is Burke, to which the federal government allotted roughly $17.5 million. However, Burke County Finance Director Margaret Pierce said the county does have a general ordinance in place for how to spend ARPA money.
“The county is working to determine how funds will be used,” Pierce said. “With the final rules just released from the U.S. Treasury in January, we will be working with commissioners to identify their priorities and eligible expenses.”
According to Burke County’s grant ordinance, the majority of ARPA funds will go toward public health initiatives. The county will use the rest for water and sewer projects, addressing negative economic impacts and bonuses for essential employees.
Only three other counties in the region, Mitchell, Madison and Avery — all of which received ARPA allocations at least $8 million less than Rutherford — have not solidified plans for the money.
“(We’re) still having conversations with commissioners,” Avery County Manager Phillip Barrier said.
Mitchell County Manager Lloyd Hise also said his county will establish a plan for its ARPA money after upcoming commission planning sessions.
Rutherford County’s struggle to plan
Though the federal government established four buckets for acceptable ARPA expenditures — COVID recovery, infrastructure improvements, premium pay and revenue loss — local governments are tasked with determining which projects and programs within these buckets to fund.
Many Western North Carolina counties, such as Buncombe and Transylvania, have established processes for nonprofit organizations to apply for ARPA funds. Garrison said Rutherford tried the application route but found that it further strained the county’s administrative limitations — receiving requests totaling around $59 million after opening applications in October.
Several other counties in the region have distributed their funds internally — giving bonuses to essential workers, funding necessary capital projects, supporting vaccination efforts. This, too, Garrison said, would be too hefty a task for Rutherford to take on with its current staff.
Rutherford County’s Finance Department has five staff members. Other county employees, such as the Planning Department’s three-person staff, would also likely help with ARPA planning, but Garrison said handling millions of federal dollars while also doing the rest of their jobs would be too much to ask of the workers.
The solution, he said, is hiring a grant management firm or an employee whose only job would be planning and executing ARPA spending.
“It’s going to be important that we have somebody who can work with the commissioners to go through and define the projects that do seem to fit within the eligibility criteria established by the federal Department of the Treasury, as well as meeting the North Carolina criteria for a legal project,” Garrison said.
Madison County, one of the three WNC counties besides Rutherford without a solidified plan for its ARPA funds, did just that. Last summer, the county opened applications for a part-time ARPA manager.
Though “several” people applied, the county hired Ross Young, who had served as Madison County Cooperative Extension director for more than 30 years before retiring in January, because of his experience handling federal grants in his previous position, said Norris Gentry, interim county manager and Madison County commissioner.
Madison County did not respond to a request for information about Young’s salary prior to publication of this article. However, Gentry said Young’s pay would be a “remarkably small number” and would come out of the county’s ARPA funds.
Rutherford County’s ARPA management will also come out of the county’s ARPA dollars, which Garrison said has its drawbacks.
“At the end of the day, if we’re going to be using 4% or 5% of that to pay someone to manage the funds, those are monies that definitely could have been better used for programming or toward eligible capital projects,” Garrison said.
Like Rutherford, Madison County decided to hire an ARPA manager due to a lack of staff.
“We deemed it would be better to bring an internal employee — someone capable and experienced — and let them become an expert in the federal grant,” Gentry said.
Unlike Rutherford, which has at least eight employees who could manage the federal dollars, Madison County has only one employee in its Finance Department. The county’s total administration consists of just five staff members, Gentry said.
With Young on board to manage ARPA funds, Madison County is on its way to developing a plan for the money, which governments must allocate by December 2024 and spend by December 2026, as per U.S. Treasury guidelines. They must return any unspent money to the federal government.
“It is my hope that several months of planning will go into building a strong plan,” Young said.
Rutherford, however, is still in the planning stages of hiring an ARPA manager — Garrison did not say when the county would hire the additional staff — which delays the county’s use of the money.
With no plan in place nine months after the federal government disbursed the first tranche of funds, Garrison said it’s possible that the community has missed out on the assistance ARPA money is intended to provide.
“It’s the capital projects that concern me,” he said.
“Some capital projects, especially infrastructure projects, sometimes take years to get to the point of fruition.”
Neither Gentry nor Garrison speculated what ARPA funds will be used for once a plan is in place. Garrison, however, said broadband expansion — one of the infrastructure projects that would take a substantial amount of time — was a point of interest for Rutherford.