The American Rescue Plan Act: 4 questions to get thinking about infrastructure projects
March 25, 2021
March 25, 2021
Getting ready for this unprecedented funding now will help maximize long-term community impact
The American Rescue Plan Act fund is on its way to every corner of the US. This is the first time ever that an act has been passed that will send money to every city, town, village, and county in the US, which makes it unique. The dollar amount—$130.2 billion within the $1.9 trillion billion package—is turning heads. If you’re wondering how much is coming to your hometown, the National League of Cities pulled together allocation estimates which you can view here under “Local Funding Info”.
Specific guidelines for funds are being established—water, sewer, and broadband qualify—but how and where to direct the funds may not be obvious. One stipulation of the act is that funds need to be spent by December 31, 2024. This may seem like quite a bit of time, but it really is not a much time when it comes to infrastructure investment. Feasibility studies, preliminary design, final design, and construction can take years, depending on the project. Additionally, when you consider that every municipality in the US will get money that can be spent on similar projects, you provide yourself more options on when to spend the funds by getting an early start.
We are advising our clients to get started now, to make sure they are funding the right project, and making the greatest impact on their community. Here are four questions to get started on directing your American Rescue Act funding.
COVID-19 has hit public coffers hard, with funds deployed to emergency uses as revenues have fallen. Whether it’s due to lost tourism dollars, hotel taxes, toll revenue, parking revenue, or other revenue generators, most municipalities are hurting. This has led to many jurisdictions falling behind on their slate of infrastructure projects, many of which are critical to the success of the community.
This is an opportunity to catch up if you have fallen behind. Given the time limit on these funds, it would be wise to consider projects that have some of the preliminary work done already, whether it’s having formed a project team or conducted feasibility studies. The permitting process—whether it’s through the Environmental Protection Agency, departments of Heath, Natural Resources, or otherwise—can take some time. It’s important to understand the process and estimated time for approvals. You want to avoid unexpected delays that might interfere with funding.
Every municipality and county should have a plan to rebuild better. We took a look at getting “shovel ready” for emergency funding in a previous post. This includes tracking pandemic-related expenses, knowing what has and hasn’t been done for each project cycle, and having a funding strategy in place.
One glaring issue that we’ve heard a lot about is broadband access and its role in keeping everything moving from the economy to our kids’ education. Many have been arguing that more equitable access to broadband internet is no longer a luxury, it’s a right. Having a more robust network available to all people may also contribute to collective resilience (more on resilience later).
Thinking about the foundation of the community and what will help it weather the next economic shock should be part of the equation.
An important factor in getting projects moving is having the right talent on your team. Unfortunately, many cities and counties had to furlough or lay off employees, which means some teams may now lack the expertise they need to effectively deliver their projects.
These funds can also be used to address budget modifications, rehire team members, staff up, or bring in necessary consultants to move things forward. It should be noted that these could also be considered “reimbursement costs” to mitigate the damage done to municipal budgets by the pandemic if water, sewer, or broadband projects are not needed.
Roads and pipes don’t stop at local government borders, and communities don’t thrive in a vacuum. Procurement of shared and common services like fire halls, roads, lift stations, water extensions, etc., should be done jointly. Having a plan to partner with other governments or organizations to fund projects is always a best practice, though it may prove particularly relevant with this Rescue Act funding. Cost-sharing with a neighboring jurisdiction on a joint project could be easier now. After all, every city and county in the country is entitled to a share of these funds.
State governments also have money coming and can certainly be an important ally on the right project. We are aware of project needs shared between neighboring communities, but the funding hasn’t aligned to move the project forward.
It will also be important to communicate with state agencies, regional organizations, and your neighbors so that gaps are not left unfilled and to not duplicate efforts. In some cases, bidding together may even help communities leverage better pricing through scaling up the scope. This is a great time to collaborate and leverage efforts for a more strategic recovery program for your region.
The phrase “build back better” is something we’ve been saying and hearing frequently in our industry. We are seeing that climate change, environmental justice, racial equity, and removing barriers to opportunity are key priorities of federal agencies. You should also think about addressing these elements in your planning and investments not only because it’s the right thing to do but it will improve your competitiveness for future federal funding.
Good infrastructure investment pays dividends over many years, and that should be the case here as well. As we’ve written previously, thinking about the foundation of the community and what will help it weather the next economic shock should be part of the equation.
A big part of this relates to systems thinking—when you invest in resiliency and build stronger systems then you don’t suffer nearly as much as if you’re paying out after the fact. One dollar spent upfront can save many more in reactive response when disaster strikes. So, it’s important to ask, what have we learned from COVID-19, and how can we be better prepared for the future?
The social benefits from new infrastructure investment could be transformative. By focusing on what makes us collectively stronger, we may emerge from this global pandemic better than when we started.
To make sure we’re making those effective investments, we need to get started now. Taking action by doing a real needs assessment, collaborating with neighbors, and thinking of the future is what will best serve our communities. When it comes to infrastructure, we’re all in this together.