NEWS

How will city spend millions in stimulus?

Federal guidance, local decisions are still to come

By DANIEL A. KITTREDGE
Posted 8/4/21

By DANIEL KITTREDGE How will Cranston spend millions of federal stimulus dollars over the next three years? Some of the money has already been allocated to offset revenue losses for the fiscal year that began July 1. And there are still more questions

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NEWS

How will city spend millions in stimulus?

Federal guidance, local decisions are still to come

Posted

How will Cranston spend millions of federal stimulus dollars over the next three years?

Some of the money has already been allocated to offset revenue losses for the fiscal year that began July 1. And there are still more questions than answers, it seems, over what uses the U.S. government will approve.

But on Monday, members of the mayor’s administration and City Council appeared in agreement that any decisions about the money’s use should, and will, be made collaboratively.

“My department and other departments will be doing the legwork to see what [the funding] can be spent for and once we can kind of identify it, then I have no problems reporting that to the council for approval,” said Finance Director Robert Strom, responding to questions from council members during a meeting of the Finance Committee. “We wouldn’t just go out and just spend the money. I want to make sure we have no issues five or six years from now when the feds maybe want to do an audit … We certainly don’t want to have to pay back anything. That’s not going to happen under my watch.”

The city is due to receive approximately $27 million directly from the federal government through the American Rescue Plan approved in Washington, D.C., earlier this year. Robert Strom, the city’s finance director, said another $15 million could be headed to Cranston, but that will be “filtered through” the state.

The first half of the city’s direct stimulus – roughly $13.3 million – was transferred from the U.S. Treasury on May 20, Strom said. That money has been invested, he said, generating roughly $1,000 in interest to date.

The second half of the city’s direct stimulus funding is due to arrive in May 2022. The money, Strom said, can be spent through December 2024.

“I’m being very conservative with the money,” he said. “We haven’t used one dollar yet.”

Strom said to this point, there have been discussions over some possible uses for the funding, including investments in broadband equipment for the Fire Department and sewer infrastructure projects through the Department of Public Works.

He also noted that the roughly $311 million city budget for the fiscal year that began July 1 relies on roughly $7.8 million of the stimulus funding to cover revenues lost due to the pandemic. Going forward, he said, the administration anticipates revenues will rebound, particularly as economic activity picks up post-pandemic and projects like the delayed Topgolf development go forward. He also said the federal government will be more restrictive in terms of using the stimulus money to cover revenues in future years.

“Going forward, there’s a formula that they’ve generated, so we wouldn’t be able to do the same thing we did this year, because obviously, a lot of the revenues have started to come back … As an example, the $7.8 million this year may be down to $2 or $3 million next year,” he said.

Strom said he has been in continued discussions with other municipal finance officials throughout the state. He anticipates having more concrete guidance from the federal government regarding the allowed uses for the stimulus funding in the fall.

During Monday’s meeting, a number of council members shared their thoughts regarding how the process should proceed – and, in some cases, how the money should be spent.

“I just want to make sure that the council’s aware of what the money’s being spent on … we want to make sure we see it before the money gets spent. That’s my only concern,” Council President Chris Paplauskas said.

Ward 6 Councilman Matthew Reilly said he has “some concerns” about the money being spent “bit by bit.” He is particularly fearful, he said, of any stimulus spending that creates “future structural deficits” – in other words, costs that will recur without an established funding stream. He said the city should “be creative and put that money to its best use.”

“We’re never going to get an opportunity like this again,” Reilly said, adding: “Year after year, we don’t have money to fix things … We can really bring this city back.”

Citywide Councilman Robert Ferri expressed support for using some of the funding for programs focused on providing support to the city’s “working families,” such as assistance with rent, taxes and health care.

Both Strom and Anthony Moretti, chief of staff to Mayor Ken Hopkins, said that kind of use for the funding remains under consideration.

“That’s something we’re taking into consideration and we’re working on that,” Strom said.

Ward 3 Councilman John Donegan said he agrees with Reilly that the funding should be utilized for “one-time” projects and capital needs, and with Ferri about the “opportunity to invest in building a healthier community, a more equitable community.”

He also made a call for officials to involve the public in the process, perhaps through forums held in each of the wards to seek feedback.

“It’s really important that when we decide how to spend this money … that we are intentional with our outreach to the community,” he said.

In May, the political action committee Cranston Forward released the results of a survey regarding how residents would like to see the American Rescue Plan funding spent. The survey, conducted via social media and email in April, drew 63 responses.

According to Cranston Forward, the “most pressing community needs in order of priority” were job and income loss, lack of access to health care, rental and mortgage assistance and the eviction moratorium, food assistance, COVID-19 vaccinations, education disruption and learning loss, and the increased need for mental health support.

The top priorities for the spending of the stimulus funding, according to the group, were primary health care and behavioral health care, relief aid to small and local businesses, affordable, housing, “putting city residents back to work,” early childhood education, green energy and environmental sustainability, and vaccine sites.

The survey also included priorities “related to challenges in our schools to open safely and provide a robust online learning infrastructure for students who have to learn remotely.” Those include air filtration and ventilation, access to internet at home and in community settings, a more engaging online curriculum, and equipment including laptops and tablets. Elsewhere on Monday:

* The Finance Committee approved a series of so-called fourth-quarter transfers submitted by the administration. Those represent adjustments to the budget for the fiscal year that ended June 30, based on actual expense and revenue figures.

Strom told council members that “at this point … we’re generating a surplus” for fiscal 2021, although he said it is too early to provide a precise figure. The past fiscal year will be fully closed out in September, he said, with an audit to follow in October.

“All in all, given the pandemic, I think we ended up this fiscal year pretty well,” he said. * The Finance Committee also approved a transfer of $4,900 from the “council contingency” line item in the current fiscal year’s budget to the “orders of the mayor” and “executive contingency” line items, which will receive $1,000 and $3,900, respectively.

In effect, the transfer – which must still be approved by the council – reverses amendments that had drawn the mayor’s public ire, as well as his veto, during the budget approval process. On Monday, the move was approved with virtually no discussion, aside from a clarification with legal counsel that the transfer was acceptable.

* The Finance Committee approved several labor agreements, including a new three-year pact with Laborers Local 1322 and one-year reopener agreements between Cranston Public Schools and a number of its bargaining units, including tradespeople, custodians and bus drivers.

The new Laborers contract with the city, which would be effective through June 30, 2024, would have a cumulative fiscal impact of nearly $500,000, according to a note attached with Monday’s agenda. The bulk of that is tied to salary increases.

Arthur Jordan, the union’s business manager, urged approval of the pact, calling it “fair to the taxpayer” as well as the employees.

Moretti called the negotiations that led to the agreement a “pleasure.” He called the pact “a fair, good deal for the public” and “a good deal for the employees, who truly mean a lot.”

Moretti also told council members the “vast majority” of the increased cost associated with the agreement for the current fiscal year is already covered through the budget.

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