With just over four months before the U.S. Treasury Dept.’s deadline to obligate all American Rescue Plan Act funding, Cumberland County has roughly 15% of its $65 million budget left to address, county officials said this week.
The county began receiving ARPA funds in 2021 as part of a $1.9 trillion federal stimulus package signed by President Joe Biden to aid the nation’s recovery from the Covid-19 pandemic. A CityView analysis shows that as of Aug. 6, Cumberland County has obligated 84.63% of its ARPA funds and has spent 45.37% of that money. “Obligated” means the county has signed some sort of contract or agreement designating how that money will be spent. The county has until Dec. 31, 2024, to do so for all its ARPA funds.
Despite its many benefits, ARPA funding also posed some unique challenges for municipalities, Cumberland County Chief of Staff Tye Vaught told CityView.
“Normally, the issuing agency, whether it be HUD [the U.S. Dept. of Housing and Urban Development] or Treasury or whoever, typically, they will approve projects,” Vaught said. “They did not do that with ARPA.”
Municipalities that were accustomed to clear frameworks and a definitive “yes” or “no” from federal officials on proposed projects instead had to adjust to hazier guidelines, Vaught said.
“A lot of counties and cities were reluctant, I think, in the beginning to just start spending money, because we didn’t know if it wasn’t acceptable or if it would pass the ‘smell test,’ as I say,” he said. “After the final rule came out [in] April of 2022, [that] is when we started putting projects together, because we had more stable ground to stand on.”
That final rule from the U.S. Dept. of the Treasury clarified how the county could use its ARPA funding, mandating that ARPA-funded projects had to address an issue related to public health, infrastructure, public sector capacity, revenue replacement or negative economic impacts stemming from the pandemic, Vaught said.
“Those categories actually changed slightly between the interim rule and the final rule,” he said. “That was another thing where it was like, ‘Hey, we don’t know [if] this is going to be the actual approved spending authorization.’”
And even after final project categories were set, county staff ran into another problem, according to Vaught: as much as they wanted to tackle infrastructure matters, many municipalities across the state and country were doing the same, making it a struggle to find contractors and subcontractors. That became an issue as the county faced the Dec. 31, 2024, deadline for obligating funds — which is two years prior to the Dec. 31, 2026, deadline for actually spending them.
“The capacity wasn’t there in the near future to undertake these projects and have them done in a timely manner and have the money obligated and have it spent before 2026,” Vaught said. “Two years sounds like a long time, but it’s really a short turnaround.”
As the county stares down impending deadlines, here’s how that money was actually obligated and spent:
By project sector
According to a CityView analysis of county data, the majority of the county’s ARPA funding — $30.4 million, or 49.3% of the $61 million already budgeted — was used for “public sector capacity,” or rehiring public sector employees who lost their jobs before or during the pandemic.
Vaught said the county opted to designate much of its funding for that category because of how it budgets employee salaries. When the board of commissioners approves the county’s budget each year, all potential employee positions are factored in, regardless of whether those positions are filled, he said. By using ARPA funds to hire in those areas, the county was then able to redesignate money from its general fund for other important ARPA-related projects, according to Vaught.
“In effect, what it did is it took away some of the federal red tape or requirements, and it also takes away the timeline, because in effect, it’s general fund money,” Vaught said.
Recent projects like the county employee daycare center, mobile WiFi hotspots offered for checkout at local libraries and nonprofit assistance were all funded by that provision, he said.
“Technically, that was not ARPA money that was used, but it was made possible because of the freed-up capacity,” Vaught said.
Who got help?
According to a CityView analysis of the nonprofits and small businesses receiving ARPA funding from the county, health care was a popular sector for both programs, with 16% of the participating businesses and 15% of participating nonprofits falling under that category.
ARPA funding distributed to nonprofits largely focused on five types of spending:
- Social services – 28.3%
- Children’s services – 16.98%
- Health – 15.09%
- Arts and culture and emergency services – 9.43%
- Disability services – 7.55%
Food and retail dominated the types of small businesses awarded ARPA funding, the data shows. Hair salons also commonly received funding, according to a CityView analysis.
The five most popular types of businesses receiving ARPA funds were:
- Food – 24% of businesses awarded
- Retail – 20% of businesses awarded
- Hair salons and health – 16% each of businesses awarded
- Lodging and contract work – 8% each of businesses awarded
- Childcare – 4% of businesses awarded
According to a Cumberland County dashboard for the small business assistance program, at least 184 full-time-equivalent employees have kept their jobs thanks to the ARPA funding.
Data demonstrating the impact of nonprofit funding wasn’t available, but Vaught said in a Tuesday meeting of the county’s ARPA Committee that $267,000 of that program’s money remained unspent. Vaught told commissioners his staff would reach out to businesses that had not used all of their available funds.
Reporter Lexi Solomon can be reached at lsolomon@cityviewnc.com
This story was made possible by contributions to CityView News Fund, a 501(c)(3) charitable organization committed to an informed democracy.
