News

City, county proceed with caution on how they’ll spend ARP money

By Bill Moss, Published: February 13, 2022

Hendersonville City Manager John Connet opened the city’s information meeting on American Rescue Plan money with an observation about how unprecedented the program is.

“I’ve been in local government for 35 years and never have I received a gift of this magnitude from the federal government,” he said.
Specifically, the city will receive $4.5 million in ARP money, half already deposited in the city treasury and half next year. The city is using the in-person and Zoom-available meeting plus an online survey to gather input on how residents want the money spent. If the attendance at last week’s public meeting at the City Operations Center is a guide, nonprofit agencies are signaling the most intense interest in where the council sends the money. Agencies from the Team ECCO Aquarium and Shark Lab downtown — “I have 300 mouths to feed every day,” director BJ Ramer said — to Interfaith Assistance Ministry sent leaders to find out how they can apply for grants.
Think first of long-lasting, high impact on vulnerable populations, Connet said.
“We want to be transformative, we want to be catalytic and we want to impact the greatest number of people,” he said. “We want to focus on the disadvantaged and the greatest number of folks in those categories.”
Local government bodies are allowed to spend ARP money to:
• Contain Covid-19 and address other public needs
• Invest in water and sewer infrastructure
• Grant premium pay for essential workers
• Replace revenue lost because of the pandemic
• Address negative economic impacts that people or businesses have had. Examples include housing assistance, food assistance, home repair and weatherization and job training.
Ineligible categories include contributing money to rainy day funds or pension funds, debt service, general infrastructure spending and paying legal settlements or judgments.
The council has already signaled its desire to give premium pay to essential employees and to identify and replace lead pipes in the city water system, Connet said. Identifying homes or businesses served by failing septic tanks is another potential use of the money.
“We can spend this money to extend sewer lines into those areas to move people from a private septic tank system into public sewer,” Connet said.
Whether the money can be spent on parks or for development of the Ecusta Trail is a little less certain.
“Originally there was some question whether it can be used for recreational activity,” Connet said. “In the final rule we have a little bit more leeway.”

The next step in the process takes place next month when the City Council uses public input and its own priorities to set goals and objectives. In the next two months, the city will refine the applications nonprofit agencies can use to apply for ARP money. In May the council is expected to set funding priorities. All ARP money must be appropriated by December 2024 and spent by December 2026.

Meanwhile, Henderson County commissioners took the first formal step Monday night in adopting a set of policies to guide ARP spending. They heard from a Etowah resident who urged the board to be transparent in how it spends ARP money and also noted that no money had been spent yet.

(Henderson County has allocated $500,000 to Pardee UNC Health and AdventHealth to support infusion treatment for Covid patients and the Mills River Town Council voted in November to spend $75,000 on premium pay for Mills River Fire & Rescue personnel.)
The local government units have been cautious about spending the money because the U.S. Treasury Department did not issue its final rule until Jan. 6. Assistant County Manager Amy Brantley, Finance Director Samantha Reynolds and County Attorney Russ Burrell developed the first three of the numerous policy and procedure guidelines for spending ARP money, covering allowable costs, nondiscrimination and conflict of interest. The county is receiving $22.8 million in ARP money over two years.
Board Chair Bill Lapsley said while he is frustrated that commissioners cannot more quickly allocate the money so that it can boost economic recovery, he also cautioned that running afoul of the federal rules could force the county to give back any money spent improperly. Commissioners adopted a 24-page document setting out rules for spending ARP money. Like the city of Hendersonville, Henderson County has not yet developed an application form that nonprofits can use to seek ARP funding.