From the Beacon, April 2021

With one sweep of his pen, President Joe Biden transformed the largest federal aid bill in our nation’s history into the law of the land. The $1.9 trillion American Rescue Plan Act, or ARPA, will soon send an unprecedented $350 billion in direct federal aid to cities, towns, counties, territories and states.

All-in, Massachusetts will receive approximately $8 billion in direct state, local and county funding, including approximately $3 billion that will flow to our 351 cities and towns. In addition, the package will send us billions more for education, transit, housing, public health and other vital needs, as well as tens of billions to residents through enhanced unemployment benefits and direct stimulus checks.

After more than a year in crisis mode, managing and leading during the worst public health emergency in more than a century, ARPA is a huge victory for local governments, providing the resources and investments we need to recover, restore and renew our communities and our economy.

ARPA’s passage was not easy. From the start, our powerful federal delegation was united in their support and advocacy for direct aid to cities and towns, and our national affiliate, the National League of Cities, waged a relentless campaign across the country to mobilize municipal leaders to call on their lawmakers to make similar commitments. Our U.S. senators and representatives delivered. NLC delivered. And the MMA is proud of its active role supporting, educating and informing stakeholders and the public of the urgent need for sweeping federal relief.

Yet this victory is just the beginning of a new and enormous challenge: how to pivot, plan, act and lead to turn ARPA’s promise of rescue and recovery into a reality.

Great opportunity brings great responsibility
While the details will become clearer after the U.S. Treasury Department provides specific guidance by next month, the scope of our new federal aid is known. With approximately $3 billion flowing directly to our 351 cities and towns, every community, from the smallest to the largest, will receive an unprecedented amount of funding to use by December 2024 to combat the pandemic and invest in our residents, businesses and communities to recharge our economy and rebuild our future.

Local leaders will now have the awesome responsibility of allocating and deploying these funds to achieve the best result, following a process that inspires confidence that municipalities are best positioned to make best use for maximum impact. Done well, ARPA will not only rescue our economies, it can also demonstrate to the nation that cities and towns are up to the task and deserve treatment as full and equal partners in our intergovernmental system.

A municipal planning framework for maximum impact
Managing and leading in the public square is always complex and filled with multifaceted challenges. With the stakes so high, and billions of dollars soon arriving on municipal doorsteps, local leaders will need to approach ARPA with a comprehensive planning process that emphasizes three overarching themes: governing well, leveraging ARPA with other resources, and investing for recovery and results.

This diagram provides a high-level visual of the three complementary planning elements that can make ARPA transformative for your community. Use this framework to build a platform for success.

Each city and town will face differing immediate needs, differing pre-COVID challenges, and differing goals for long-range growth. We’ll see different decisions and priorities across Massachusetts, which is the beauty of providing municipalities with direct funding so that local problems can be addressed with local solutions that fit best.

Yet it is imperative that every community embrace governing with excellence, make full use of ARPA by leveraging the funds with other resources and programs, and use a deliberate investment strategy so that the benefits continue long after the spending ceases.

Govern well
With an infusion of thousands, millions or tens of millions coming into your community, there will be no shortage of requests, suggestions, pleas, and lobbying for how to spend the funds. In high-pressure and urgent situations like this, it is not uncommon to start making snap decisions rather than taking a step back and thinking carefully about how to proceed. Here are some basic suggestions:

Convene all stakeholders and build consensus. Decisions on how to spend ARPA funds will likely be concentrated in the hands of municipal CEOs, but the power to act should not short-circuit an open process to bring all stakeholders in the community together to engage in dialogue about needs, resources and priority-setting, including government colleagues, nonprofits, businesses and others. True engagement and listening will minimize friction and encourage collaboration over ARPA’s three-and-a-half-year lifespan.

Follow allowable uses under ARPA. Once the Treasury clarifies how and where the funds can be spent, cities and towns should adhere to the rules. One story of misspent funds will undermine 100 stories of impactful use.

Meet all accounting and reporting rules. Make sure you have the systems in place to track and inform our federal partners of how well you are using your ARPA funds.

Comply with all local and state laws and ordinances. In addition to federal rules, your ARPA processes should be integrated with all other accounting, appropriation and audit requirements.

Ensure transparency throughout. The public and media will want to know how these funds are being used, especially those that are not subject to appropriation. Consider creating an ARPA dashboard, making it easy for everyone to see the uses of the funds, and who is benefiting.

Do not create future budget deficits. This is one-time funding, and it should be treated as such. Do not use the funds in collective bargaining contracts, for example, as this would lead to shortfalls in future years. Even premium pay should be closely scrutinized, as any pensionable benefits would increase unfunded liabilities for years to come, eroding available resources for essential services. Since the funds cannot be used after December 2024, recognize that the funding commitments should end then, too.

Leverage your ARPA aid
While ARPA is unprecedented in scope and scale, all three levels of government have already dedicated massive resources to fighting all aspects of the pandemic during the past year. Coordinate and integrate ARPA into your planning and execution at all levels to scale existing efforts and create new initiatives.

Use a thoughtful and integrated strategic planning process that connects ARPA to your entire municipal government. Over the past year, nearly every aspect of local government has been pulled into the battle to subdue the pandemic, and you have created new programs and new ways of doing business, breaking down silos in the process. Don’t put ARPA in a silo; integrate it into your overall planning process.

Leverage your ARPA aid with other funding. The good news is that the federal government has created multiple funding sources, and you should use these resources to stretch your ARPA dollars as far as they can go. Cities and towns should use ARPA to build on, extend or complement their other reimbursements or grants, including from FEMA, the CARES Act, ESSERs 1, 2 and 3, and more. Don’t spend ARPA funds on items that will be funded by these programs.

Coordinate with other state and federal programs. The state is using its federal aid and its own resources to address a wide range of urgent needs, such as rent and mortgage relief, small business relief, support for child care, access to public transportation, and much more. Work closely with your state partners to complement each other. If your businesses or residents qualify for state funding, look at ways you can augment this or repurpose your aid to address community needs in other ways, rather than spending resources unnecessarily.

Collaborate with community partners and organizations. To maximize efficiency, look at what social service and civic agencies are doing and consider partnering with them if they are already addressing critical needs that need to be scaled up.

Use existing delivery channels for efficiency. You’ll want to spend your aid on direct assistance, programs and investments, rather than using precious resources to create new offices or delivery systems. If that means working with outside partners, including nonprofits or nearby communities that are already engaged in the work so you can leverage their systems, that would be a best-practice move.

Don’t reinvent the wheel: learn from others. In addition to looking across your community to connect the dots, look across the state and nation to see what your peers are doing. The NLC and other leading organizations (including the MMA) have or will be creating networks to share information, compare notes, and learn about what works and what doesn’t. Bring what you learn back home and apply it.

Invest in best uses for long-term recovery and results
The third lens to bring to your ARPA challenge is the investment lens. The funding will come in two tranches and last only three and one-half years. Human nature has us focus more on immediate payback rather than longer time horizons that are harder to imagine. That’s why fewer people in their 20s start putting extra money in their retirement accounts, and lots of people in their 50s and 60s are giving their 401Ks unparalleled priority. As you think about the best use of ARPA money, think about investing in your community in ways that will yield benefits far beyond 2024.

Invest in urgent health and economic needs. Of course the most immediate challenge is to deploy the funds to reverse the damage that the pandemic has done to our residents and small businesses, and using the funds as an economic lifeline is more than appropriate — it is called for, especially to lift up the most vulnerable in your community. Failing to do so will hamper future growth and progress.

Prioritize short-term investments with lasting benefits. Consider multiple ways to provide assistance and choose the path that will go farther and last longer. For example, using ARPA funds to support struggling businesses and households could be coordinated with education and training on financial planning (assuming that would be an allowable use). Some communities could use ESSER funds to address school ventilation issues, making classrooms more pandemic-resilient.

Identify and address pre-COVID inhibitors to growth. ARPA allows investments in certain types of infrastructure, including water, sewer and broadband. If the quality of these systems has hampered your growth in the past, then it would make sense to consider such investments. Capital investments that improve water quality and access, or close the digital divide, can also make great economic sense and free up funds for future investments as well.

Move quickly to stimulate a faster recovery. ARPA is intended to serve two key purposes: to provide massive resources to close out the last stages of the pandemic battle, and to provide investments to stimulate our economy. During the last fiscal crisis, the Great Recession, the federal aid package (the American Recovery and Reinvestment Act of 2009) was whittled down in a compromise with senators who opposed government spending. The result was a sluggish recovery that was unnecessarily slow and prolonged, costing our economy millions of jobs and lost growth. ARPA is intended to avoid that mistake. That’s why ARPA should be used to supplement and expand investments in the community, not simply replace planned spending and banking those funds for future use.

Measure progress throughout to inform ongoing plans. This is a best practice that will be very helpful to allow adjustments over the next several years, ensuring ARPA’s success. The most effective strategic plans have four key phases: 1. make sense of the situation (investigate all angles with all stakeholders); 2. make a plan (choosing what to do and what not to do); 3. make it happen (making sure everyone is aligned with your strategy); and 4. make revisions and repeat steps 1-4. It is impossible to make revisions and improve if you do not measure whether you are hitting your targets or achieving expected results. Making changes is not an admission of failure, it is a commitment to excellence and a best practice.

ARPA brings opportunity and responsibility
The bottom line is clear: ARPA is entrusting cities and towns in Massachusetts and across America with unprecedented aid and resources, and the local leaders of our nation have a responsibility to be outstanding stewards of these resources.

Done well, ARPA can transform our communities, boosting us out of the pandemic recession into a recovery that will create jobs and accelerate growth and prosperity.

Even more, the example of a successful implementation of ARPA programs at the local level can prove once and for all that municipal governments should be equal partners in the governance of our nation. That would be transformational as well.

Written by Geoff Beckwith, MMA Executive Director & CEO