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Cities, towns set to receive COVID aid windfall, contemplate how to spend it

It’s one thing to approve $1.9 trillion in American Rescue Plan aid for the country, including $65.1 billion for its 19,000 municipalities. It’s another to sort out how all those cities, towns and villages can spend the money.

The federal largesse, meant to mitigate the impact of the COVID-19 pandemic, will funnel $2.6 billion to municipalities in Connecticut, including $1.6 billion for general government and $1 billion for schools. The general government portion includes $870 million in aid to cities and towns and $691 million for counties, which, because there is no county government in the state, will be distributed to municipalities on a per capita basis.

A total of $114.4 million is earmarked for general government in New London County, a sum that includes $63 million in direct awards to cities and towns as well as a $51.4 million county allocation.

The county’s two “entitlement cities” — New London and Norwich — are set to directly receive $21.8 million and $21.5 million, respectively, nearly 38% of the total being directly lavished on the county’s municipal governments.

So far, the only guidance the federal government has provided on spending the money is what’s spelled out in the American Rescue Plan Act itself, which Congress passed and President Joe Biden signed into law March 11, according to Mike Muszynski, state and federal relations manager for the Connecticut Conference of Municipalities.

“There’s still some ambiguity as far as what’s eligible,” Muszynski said.

The CCM indefinitely postponed a webinar it had scheduled for municipal leaders last Wednesday on eligible uses of the ARP funds until the U.S. Treasury Department provides more information. The CCM is hopeful the guidance will be available in late April, just as cities and towns are hammering out their budgets for the 2021-22 fiscal year.

Amid the uncertainty, New London Mayor Michael Passero said he will not include the ARP funding in his budget proposal.

“Our plans are to get through the budget process and adopt a city operating budget by the end of May. We should know a lot more by then,” he said. “I expect to engage the City Council in almost like a second budget appropriation process. The idea is to continue to make investments that will continue to pay off for us in the future, build economic prosperity and meet the human needs in the community that have been unmet and exacerbated by the pandemic.”

Passero said the city likely would look to reinstitute a grant program that provides funding for social service and business needs.

Assisting workers, businesses, nonprofits

The guidance the Treasury Department has provided so far identifies four areas in which the ARP funds can be applied, which the CCM has posted on its website, ccm-ct.org:

• To respond to the COVID-19 public health emergency and its economic impact, including assistance to households, small businesses and nonprofits, or aid to impacted industries such as tourism, travel and hospitality.

• To respond to workers performing essential work during the pandemic by providing premium pay to local government workers or by providing grants to employers of essential workers.

• To provide government services curtailed by the pandemic’s effect on revenues collected during the fiscal year prior to the emergency.

• To make necessary investments in water, sewer or broadband infrastructure.

Muszynski said CCM has been fielding calls from local officials across the state asking about the use of ARP funds. CCM, in turn, has been working with the National League of Cities, which has been compiling a list of questions from across the country and submitting them to the Treasury Department.

“We’re in routine contact with them,” Muszynski said.

But things are at a standstill, he added, pending action by the Treasury Department, which has 60 days from Biden’s signing of the ARP Act to start disseminating the funds. It’s anticipated that the department likely will take most of that time to come up with the guidance.

“In the meantime, we’re working with our members, saying, ‘Hey, think of ways you can use the money based on what you know you need,’” Muszynski said.

Norwich City Manager John Salomone said he has some general and some specific ideas for how to use the $21.5 million in municipal aid the city expects to receive, but will await further guidance and direction before committing to any spending.

Salomone will appoint a task force with members from key city departments, including Public Works, Human Services and Human Resources, as well as police and fire officials, Norwich Public Utilities and other agencies. He promised the task force would be representative of Norwich’s diverse population and would be asked to “explore all the options.”

NPU, which is not directly receiving funds, has sustained heavy financial losses due to the pandemic, its gross revenue in the 2019-20 fiscal year falling by $5.2 million. Although many businesses are reopening or opening more fully, Salomone fears NPU revenue could be impacted even more this fiscal year.

If capital projects qualify, he said, the historic Norwich City Hall could use ventilation improvements, and with meeting room capacity restricted, he would like to explore renovating the unused fourth floor for meeting room space.

Arts organizations are candidates for funding, Salomone said, as are investments in economic development, tourism promotion and assistance for restaurants seeking to expand outdoors.

Cultural coalition makes pitch

In Stonington, which is set to receive $1.8 million in general-government funding, First Selectwoman Danielle Chesebrough said the money could be used to help fund much-needed improvements to the HVAC systems at Town Hall and the Human Services building, two projects that have been cut from the capital improvement budget the past two years.

She said she also would be asking the Board of Finance to consider allocating 1%, or about $18,000, of the money to the Southeastern Connecticut Cultural Coalition, which she said can then field requests for funding, some of which would flow to Stonington-based organizations.

"The main thing is we don't want to rush into how to use it," she said.

The cultural coalition, in fact, is recommending that all 43 of the municipalities it serves in eastern Connecticut dedicate at least 1% of their ARP allotment to local arts and culture. In a letter to municipal officials, Wendy Bury, the coalition’s executive director, suggests ways they can use the aid to help arts organizations, including providing grants; hiring artists to work on public health messaging around COVID-19 vaccine hesitancy; and hiring musicians and theater groups to perform in downtown areas in need of revitalization.

Groton Town Manager John Burt, whose town will receive $3.8 million in ARP funding, said his priority is helping businesses hurt by COVID-19 and homeowners facing foreclosures.

“The ability to pay rent and utilities is very important to the town to monitor, but we do currently provide some funds for that purpose and there is a new state program, UniteCT, that provides funds for those purposes,” he said.

Other possible uses for the ARP money include helping nonprofits; summer programs for children; loans/grants for home repairs; support for child care and programs aimed at improving the health of the community; and fiber/infrastructure, though that may be addressed by a federal infrastructure bill.

Montville Mayor Ron McDaniel said the town, set to receive more than $1.8 million, is considering options that include bolstering public safety and social services.

“We are still in brainstorming mode, but my intent is to ensure that we spend the money on one-time expenditures like capital improvements (air quality, accessibility, infrastructure), temporary help (monitoring, vaccination outreach, transportation) and safety measures for reopening certain sectors like the senior center and social services (automatic, unmanned temperature monitoring equipment, extra custodial services, etc.),” he wrote in an email.

Preston First Selectwoman Sandra Allyn-Gauthier said she's awaiting guidance on how the town can spend the $456,640 it's expecting as well as word on who in town has the authority to allocate the funds — Board of Selectmen, Board of Finance or town meeting. She called it "unprecedented territory" for the town to receive such a large, broad-based grant.

Improving the town's broadband service would be one good use, she said, as there are areas in the rural town where service is "spotty."

"Until we know more, it's kind of premature to start making plans to spend it," Allyn-Gauthier said. "The good news is we have until December 2024 to spend it."

In North Stonington, whose allocation for general government is $513,016, First Selectman Mike Urgo said one possible use of the money is the funding of a per diem firefighter who could respond to daytime calls.

Day Staff Writers Greg Smith, Claire Bessette, Joe Wojtas, Kimberly Drelich and Sten Spinella contributed to this report.

b.hallenbeck@theday.com

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