BARRE TOWN — “Soon” has arrived and the final rule for the use of pandemic relief dollars has been released, though local officials think a last minute change may be too good to be true.
At its regular meeting Tuesday night, the Select Board spoke with Finance Director Katelyn Kran about the use of $2.3 million in American Rescue Plan Act funds the town has been awarded. Kran told the board the federal government released its “final rule” for the use of that money on Jan. 6. Officials had been operating under general guidelines for the past several months and were told a final rule would be coming “soon.”
Kran said she was surprised by a change in the rule that greatly simplifies the program for small municipalities. The change allows towns to claim a “standard allowance” for revenue lost from the pandemic up to $10 million. This change is similar to a “standard deduction” for taxes where instead of detailing and calculating the revenue losses, the town can simply use all of its award to make up lost revenue and fund government services without much reporting.
Officials were skeptical.
Board Chair Paul White said, “It just sounds like it’s inviting some communities to get themselves into trouble.”
Kran said this change was unexpected and she reached out to the Vermont League of Cities and Towns to make sure she was reading the rule correctly. She said the town doesn’t have to show a loss to use the funds for government services.
“No need to show your work,” Kran said.
Board members speculated this change was likely made because of the cost associated with the federal government paying staff to go through every town’s itemized lists to show the revenue they lost to justify the use of the funds.
Kran said she’s been told this change should greatly reduce the town’s reporting requirements for how the federal dollars are spent, but she doesn’t know what that looks like yet.
“This is definitely a game-changer,” she said. “It has that ‘too good to be true’ edge to it.”
Town Manager Carl Rogers said the rule states there is still “streamlined reporting” involved in this change and government services is “the most flexible eligible use,” which means there would still be some restrictions.
“It’s not like we just tell them one time that we’re taking this all as lost revenue and we can do whatever we want with it and not tell them about it,” Rogers said.
Some of the restrictions that were expected are still in place. The funds cannot be used to reduce taxes; to pay off debt, settlements or judgments; to fund a pension fund; or to pay for projects that “conflict with the purpose” of the act.
Kran said such conflicting projects, according to the rule, include those that undermine coronavirus mitigation measures or would be a violation of current laws.
White said while the funds can’t be used to pay off debt, they could be used to prevent future debt. He said the town could outright buy a piece of equipment instead of financing it.
Board members discussed a list Rogers created of possible projects the town could undertake using the federal dollars. A sizable portion of the list included water and sewer projects. The town also needs to upgrade its radio system for emergency responders because there are dead spots that need to be addressed for radio coverage. They also discussed improvements to the building on 22 Wilson St. to make it more attractive for the day care that operates there. That building is owned by the town.
Board member Justin Bolduc suggested installing electric car charging stations in certain parts of town using the pandemic relief dollars. Board member Bob Nelson noted the state recently received $50 million in grant funds for such stations.
Board member Norma Malone focused on public safety, roads and infrastructure projects. Malone said she wanted to see how the funds could enhance the town’s road maintenance program because that would be a benefit to many town residents.
eric.blaisdell @timesargus.com
