Smaller metro cities still unsure how they’ll spend federal stimulus funds

Georgia cities with fewer than 50,000 residents are poised to receive a combined total of $861.8 million in federal relief funds from the American Rescue Plan Act of 2021. Cities in metro Atlanta, including Powder Springs, are now trying to figure out how they'll use the money. (Rebecca Wright for the Atlanta Journal-Constitution)
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Georgia cities with fewer than 50,000 residents are poised to receive a combined total of $861.8 million in federal relief funds from the American Rescue Plan Act of 2021. Cities in metro Atlanta, including Powder Springs, are now trying to figure out how they'll use the money. (Rebecca Wright for the Atlanta Journal-Constitution)

Credit: Rebecca Wright for the Atlanta J

More than $861.8 million will be divided among Georgia cities with fewer than 50,000 residents as part of the American Rescue Plan Act, President Joe Biden’s $1.9-trillion stimulus package. But many cities are waiting to see green before setting aside the money for anything specific.

Although news of the additional funds came in March, confusion and uncertainty about how much funding they’d receive and how it can be spent left city officials across metro Atlanta saying they’re still not sure how they’ll spend the money.

For the most part, cities with fewer than 50,000 residents receive funding amounts based on population. The state of Georgia distributes payments to these cities, whereas cities with more than 50,000 residents receive payments directly from the U.S. Department of the Treasury.

Cities must request their funds from the state by June 21. The state will disburse the funds in two payments, the first later this summer and the second in 2022. Officials have until 2024 to spend the funds.

Lilburn, a Gwinnett city with about 12,800 residents, expects to receive about $4.78 million in relief funds. The city will wait to decide how to spend the funds until the money hits their account, said Assistant City Manager Jenny Simpkins.

“We want to be ready to act when we clearly understand the rules and know how much money we’re going to get,” Simpkins said. “Until we actually get the money, we’re going to wait.”

Staff will present ideas to City Council in coming months, Simpkins said, after ensuring the guidelines which have been “confusing” at times are clearly understood.

Local government can use the dollars to replace revenue loss from the pandemic, fund COVID-19 mitigation efforts, provide payments to essential workers or address economic harm to workers, households, small businesses or impacted industries.

City officials could also invest the funds toward water, sewer and broadband infrastructure.

The last round of federal pandemic relief funds, dubbed CARES, was quickly shared with businesses struggling on the heels of shutdowns and reduced traffic. Government officials will have years, as opposed to months, to use the new funds.

Lawrenceville is projected to receive about $11.51 million. The Gwinnett city might look at investing in capital projects or giving supplemental pay to essential workers, said City Manager Chuck Warbington. Staff will present ideas to City Council to consider in July or August, he said.

Before making any decisions, Lawrenceville staff wants to ensure “that we are able to dot our I’s and cross our T’s to make sure that it meets the requirements,” Warbington said.

Nothing is final, but Dunwoody officials have had preliminary discussions about how to spend the $18.43 million they expect in funds, said Assistant City Manager Jay Vinicki. The DeKalb city might use the funds to help businesses most impacted by COVID-19, he said, similar to how it has spent CARES money.

“We’ve got hotels ... (that) have stayed vacant for most of the year,” Vinicki said. “We’re starting to see the beds fill, but that is still an industry that needs assistance. Our biggest revenue loss in total was hotel/motel taxes, and we need to do what we can to help those businesses regain their foothold.”

Dunwoody will hold off on budgeting for the second payment, Vinicki said, wary of planning for more funds than it’d actually receive.

Alpharetta, Brookhaven, Johns Creek, Smyrna, South Fulton and Stonecrest were among the wave of larger cities that recently found out their funding estimates had decreased due to complicated financial formulas buried deep within the long-winded piece of legislation passed by Congress.

Those cities were wrongly classified as smaller cities in a March estimate from a U.S. House committee, leading to drastically lower funding amounts from the Treasury than initially expected. Johns Creek saw a 73% reduction in funds between March and May estimates.

Cities with fewer than 50,000 residents will be capped at receiving 75% of their total operating budget. Conflicting information about how the awards would be calculated initially left city staff scratching their heads.

Like other cities, Powder Springs in Cobb County will likely consider staff recommendations around July for spending their projected $5.88 million in funds, said City Manager Pam Conner. It’s still too early to say how the funds will be spent, she said.

Milton is projected to receive $14.78 million. After preliminary discussions, staff in the north Fulton city plan to present ideas to City Council in coming weeks, said Deputy City Manager Stacey Inglis.

“It’s important for us to be responsible stewards of these taxpayer dollars by being deliberate, purposeful and effective in utilizing these funds,” Inglis said in an email. “And while right now we do not have definitive, Council-approved plans, the City of Milton is extremely grateful to have access to this funding.”

Top five funding amounts for Georgia cities with fewer than 50,000 residents

  • Dunwoody: $18,431,324
  • Peachtree Corners: $16,395,722
  • Newnan: $15,527,856
  • Milton: $14,783,224
  • Tucker: $13,591,216

A full list of the funding amounts for cities with fewer than 50,000 residents is available on the website of Georgia’s Governor’s Office of Planning and Budget: https://opb.georgia.gov/local-fiscal-recovery-fund.