Multiple metro Atlanta cities are adjusting the scope of their pandemic relief plans after recently learning they would be getting lower amounts of federal aid than early estimates suggested.
Due to a classification error, at least six cities will receive 44% to 73% less than they initially expected through President Joe Biden’s $1.9 trillion stimulus package, the American Rescue Plan Act.
For cities receiving millions less than they had expected, officials have to significantly temper their plans for how to use their allotment. The federal dollars can be spent to offset cities’ pandemic-related revenue losses, pay essential workers or address economic harms felt by workers, households, businesses or government.
Smyrna was among the first cities to learn of its smaller allocation — it will get $8 million instead of the $17.9 million estimate released by a U.S. House committee in March. Mayor Derek Norton said he’s disappointed at the smaller amount, but he’s glad the city hadn’t started acting on its plans before it received the money.
“Thank goodness we didn’t because that would have been a lot of time wasted figuring out something that didn’t end up coming to fruition,” he said.
In Georgia’s case, it will receive about $861.8 million to distribute among small cities and towns. Its 23 metropolitan cities will split a pool of about $576 million, going directly to each city from the feds.
Over the past few weeks, some cities in Georgia were scrambling to reconcile the difference between the early funding estimates, released March 8, and the final figures released by the U.S. Department of Treasury on May 10.
Under the Treasury’s allocations, metropolitan cities include places with more than 50,000 residents. Cities with fewer than 50,000 residents are still in this group if they are classified as metropolitan under a grant program by the U.S. Department of Housing and Urban Development.
The six cities who lost the most in American Rescue Plan Act funds following the Treasury’s correction are unlikely to see their final allocations change, according to a spokeswoman.
Smyrna, Alpharetta, Brookhaven, Johns Creek, South Fulton and Stonecrest, were initially in a group with funding based on population in the March estimate. Now, they’re grouped with larger cities across the U.S. with funding based on other factors.
Regardless of the size of its allocation, each city will have a good amount of discretion about how to spend the funds they receive.
“We had plans to help businesses, citizens, nonprofits as well as shoring up our budget and plug in any holes,” Norton said. “The plan is still the same, but obviously much scaled back.”
Besides using the money to pay for pandemic-related revenue losses, cities can also invest in infrastructure by making improvements to wastewater and storm water systems or expanding access to broadband internet.
Alpharetta tentatively plans to use their funds for repairs to sidewalks, a boardwalk on its greenway and storm water system said Tom Harris, director of finance of the north Fulton city. It will also consider using it to resurface roads, he said.
The cost of the projects are expected to exceed the American Rescue Plan Act funds that Alpharetta receives.
“We certainly are disappointed with the negative impact caused by the Treasury’s interpretations and final allocation methodology, especially in light of the initial projected allocation,” Harris told The Atlanta Journal-Constitution on Wednesday.
Alpharetta received its first check of about $3.32 million, with the second in the same amount coming next year. City Council will officially vote on how to use the funds when it approves its annual budget in June, Harris said.
Stonecrest, rattled by a recent scandal involving how city leaders used the last wave of federal COVID-19 relief funds from an earlier program known as the CARES Act, is also taking its time allocating the new funds. Acting City Manager Janice Allen Jackson said the city is in no rush to make concrete plans, because American Rescue Plan Act funds don’t have to be spent until the end of 2024.
“We have the luxury this time around of being able to really have some time for planning as well as execution of these projects,” she said. Jackson added that Stonecrest didn’t lose a ton of revenue amid the pandemic, so she expects the City Council to focus on infrastructure, small business development and nonprofit support initiatives.
Johns Creek will receive about $7.1 million, a 73% decrease from the $21.2 million estimated in March. The Council will officially decide how to use the funds later this summer, according to city spokesman Bob Mullen.
At a tense Monday work session meeting, Johns Creek officials discussed using it to offset revenue lost during the pandemic, then using the funds for storm water projects.
“At the end of the day, the reason that the revenues were down is because the government shut down the businesses,” said Councilmember Stephanie Endres during the meeting. “... I’m not interested in paying ourselves back since there are far too many residents who have not been whole. And this money is going directly into the federal debt and I’d rather keep it in circulation.”
Some of the cities whose allocations shrank say they are disappointed that their early lofty plans likely won’t happen, but Norton said the funding his city will receive is still much better than nothing.
“The amount of good we could have done with ($17.9 million) is significant,” Norton said. “But we’re still going to be $8 million more than we were before, which will help plug some gaps and help some folks.”
Credit: Georgia Department of Economic Development
Credit: Jason Getz / Jason.Getz@ajc.com