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Covid relief funding allows infrastructure projects, premium pay for essential workers

Although broad categories of how a windfall of economic recovery money can be spent are known, local government organizations are awaiting detailed rules from the U.S. Treasury Department.


The top government relations officials with the North Carolina League of Municipalities and the N.C. Association of County Commissioners on Thursday described what's known so far about how the money from the American Recovery Act can be spent.

"This is an extraordinary historic moment," Beau Mills, director of urban affairs for the League, told elected leaders and local government managers during a virtual meeting of the Land of Sky Regional Council. "I don't think that we've ever seen anything like what we're getting ready to experience where cities and towns of every size are going to get money directly. The state has no option to change the allocation. This is quite extraordinary. Congress and the president have really bestowed us a great opportunity."

The Land of Sky region, made up of Henderson, Buncombe, Transylvania and Madison counties, is projected to receive $130 million. Henderson County and its five towns are in line to get $33 million. The breakdown:

  • Henderson County, $22.7 million.
  • Flat Rock $990,000
  • Fletcher $2.45 million
  • Hendersonville $4.14 million
  • Laurel Park $680,000
  • Mills River $2.17 million

The four broadly defined ways cities and counties can spend the money are:

  • To address the public health emergency with respect to Covid-19 or its negative economic impact or to support hard-hit industries such as tousim, travel and hospitality.
  • Premium pay to essential employees
  • Necessary investment in water and sewer projects and broadband infrastructure.
  • Grants to nonprofits or "special purpose" units of government.

Covering revenue loss could be allowed, although sales tax and property revenue Henderson County budget has been less negatively impacted than officials had predicted. "If you can document loss of revenue you would be allowed to backfill revenue losses," Mills said. Propping up pension funds or using the money to cut taxes are not permitted.

"In addition to the state and local money there is lots of money for local relief," Amber Harris, director of government relations for the Association of County Commissioners, told the Land of Sky group. "We're really waiting for Treasury to see exactly how this money can be spent."

Both Mills and Harris recommended that local government bodies think in terms of capital projects that can be completed by Dec. 21, 2024, the deadline for spending the money. It's not clear whether a project would have to be completed by then or just under way with a contract price encumbered.

"The whole world is going be watching how we spend this money and the last thing we want is to be clickbait for how government wastes dollars," Mills said.