Grand Traverse County commissioners will consider hiring a consultant and establishing a task force at next Wednesday’s meeting to lead a public input process that will determine how to spend $18.2 million in American Rescue Plan (ARP) funds on community projects.

County administrators gave commissioners an initial detailed overview of the $1.9 trillion federal ARP aid package Wednesday, which includes $350 billion in emergency funding for state, local, territorial, and tribal governments. Michigan will receive $5.6 billion, while Grand Traverse County will receive $18.2 million. County Deputy Administrator Chris Forsyth noted that when funds distributed to local townships, villages, and the City of Traverse City are included, the Grand Traverse County region as a whole is set to receive $27 million. While there are certain restrictions on how funds can be spent – for example, they can’t be used to pay unfunded pension liabilities or existing debts/lawsuit settlements and can’t be deposited into a reserve or rainy day fund – there are five categories of approved spending that offer broad flexibility for community investment. Forsyth gave an overview of those five categories and possible applications for Grand Traverse County Wednesday:

1) Responding to COVID-19: This category includes a range of “best practices in mitigating and preventing the spread of a virus,” Forsyth explained. That can include things like testing, contact tracing, vaccine distribution, equipment like filters and touchless systems, funds for hospitals and care facilities, funds for healthcare and emergency workers, and improving public buildings for mitigation purposes. As a point to how flexible the current spending language is, administrators noted that digitizing county files currently occupying physical space at the Governmental Center could be considered a mitigation effort so there’s more room available for the county to serve residents in the case of a pandemic-related emergency. Forsyth also emphasized that mental health treatment, substance abuse treatment, and other behavioral health services are included in this category.

2) Responding to the Negative Economic Impacts of COVID-19: This category uses funds to address economic harms resulting from the public health emergency. Notably, this could include direct aid to households, small businesses, hospitality industries such as tourism or restaurants, and nonprofits. Forsyth noted that current federal guidelines allow counties to transfer some or all of their funds to nonprofit groups to administer in eligible categories – though the county is still responsible for ensuring the money is properly spent – and can also distribute funds to other units of government, like local townships or villages for collaborative projects.

3) Providing Premium Pay for Essential Workers: This category covers certain essential workers and allows counties to distribute a premium pay amount of up to $13 per hour in addition to wages the worker already receives. This amount is not to exceed $25,000 per eligible worker and includes categories like healthcare workers, farm/grocery/restaurant workers, public health and safety staff, janitors and sanitation workers, truck/transit/warehouse staff, childcare workers and educators, and social and human services staff.

4) Replacing Lost Public Sector Revenue: State, local, territorial, and tribal governments facing budget shortfalls can use recovery funds to avoid cuts to government services. Using a formula provided by the U.S. Treasury Department, Grand Traverse County has a calculated revenue loss of $2.3 million. Forsyth also noted that the county’s $18.2 million is being distributed in two payments – $9.1 million was already distributed in July, and the remaining $9.1 million is expected next July – and that the county can deposit those funds into an interest-generating account until they’re ready to be spent. Any interest generated by the funds while in that account “is ours to use for any purpose,” Forsyth said.

5) Investments in Infrastructure: This infrastructure spending is specific to the categories of water, sewer, and broadband, including projects that improve access to clean drinking water, improve wastewater and stormwater systems, improve resilience to severe weather events, control non-point sources of pollution, and improve broadband service to unserved or underserved populations. Eligible broadband projects are those that deliver service with upload/download speeds of 100 Mbps. Water/sewer infrastructure can include projects on privately owned property.

Several of the above five categories have “bonus” areas of spending if dollars are allocated toward neighborhoods where a majority of residents are low-income. This is called a qualified census tract (QCT), defined as an area where 50 percent of the households have income less than 60 percent of the area median income (AMI). According to Forsyth, Grand Traverse County has a QCT that “pretty much covers a big swath of Garfield Township and a little bit of the city,” with the county’s LaFranier Road campus right in the middle of the zone. QCT-eligible activities include funding for community health workers, public benefits navigators, remediation of lead paint and other lead hazards, community violence intervention programs, expanded childcare and early learning programs, aid to certain school programs, and housing services including affordable/supportive housing and housing vouchers/navigators.

With so many categories of eligible spending – and the federal government still to release its final rules for using ARP funds – many counties are seeking help from consultants to guide them through a structured public input process to create spending plans for their dollars. The county owes a report to the federal government by the end of January, and must commit its $18.2 million to specific projects by the end of 2024. The funds must actually be spent by the end of 2026. Alger said guidance from state leaders has been for counties to be “patient and cautious” in the way they proceed. Counties have been told to make the most of a “great opportunity” and “not screw it up,” Alger said wryly.

Alger said he plans to bring a recommendation to commissioners next week to enter into a consulting agreement with Public Sector Consultants (PSC), an independent, nonpartisan consulting firm that’s been endorsed by the Michigan Association of Counties (MAC). Alger will also seek commission input next week on establishing a task force that could consist of staff, commissioners and/or other stakeholders to work with PSC and develop recommendations for spending. Noting that the $18.2 million doesn’t belong to county administrators or commissioners but rather the community, Commissioner Betsy Coffia said she was “going to be a strong advocate for robust direct community engagement” in deciding how to spend dollars. Commissioner Darryl Nelson agreed that public engagement was key, as well as seeing if there were “cooperative projects” that Grand Traverse County could work with local townships to accomplish by pooling resources. Alger added that in addition to upcoming public engagement sessions, the county can also look to results from a recent community-wide survey that flagged affordable housing, childcare, broadband access, and mental health services as top needs in the county.

Some commissioners and local leaders cautioned Wednesday that while $18.2 million might seem like a sizable sum of money, it can go quickly when it comes to major infrastructure projects and other types of spending. East Bay Township Supervisor Beth Friend said Grand Traverse County has “a tremendous team that is guiding you through a good process,” but pointed out that one recent township sewer relining project along Munson Avenue cost $1.2 million by itself. “These are very expensive projects,” she said. Tony Lentych of the Traverse City Housing Commission told county commissioners that numerous local organizations have been discussing the ARP funding headed to Grand Traverse County and how it could benefit community projects. “Your money has been spent so many different times by so many different groups,” he said with a chuckle.

Commissioner Brad Jewett said the county needs to be strategic to “get the most bang for the buck” out of ARP funds, but also said “people need to be a little cautious” in realizing how quickly the money can get divvied up. It doesn’t “take long to eat up several million dollars,” Jewett said. “It is a lot of money, but yet it's not a lot of money.”