What do you do when the federal government has given you millions and millions of dollars, but you have to spend it by a certain deadline or give it back – and you can’t meet that deadline?
Well, if you are Guilford County government, you take that money, reassign it to projects where it can legitimately be spent now, and then use the freed-up money from that reassignment of funds to spend later at your leisure, after the federal deadline has long come and gone.
It’s all perfectly legal and to call it a “shell game” wouldn’t be fair to county officials who are just trying to keep the massive amount of free federal money in Guilford County.
As of November 2022, the Guilford County Board of Commissioners had determined how it planned to spend $104 million in federal American Rescue Plan (ARP) funds for projects within the county. All that money had to be “committed” by the end of 2024 and spent by the end of 2026 or be given back to the federal government.
Many of the projects Guilford County wanted to use ARP funds for couldn’t meet the deadlines, so the county got creative.
Among eligible spending categories allowable for the ARP money by law is one called “Revenue Replacement” – under which, according to county documents, “the Treasury Department developed an annual revenue loss formula to determine the amount of revenue governments have lost due to the impacts of COVID-19.”
Guilford County staff calculated that the county had just over $90 million in “lost revenue” that’s eligible for the ARP revenue replacement category.
According to the rules laid out by the US Treasury, revenue replacement funds may be spent on the provision of government services, “which can include general fund expenditures, operating expenditures, and administrative costs, among a broad range of spending authorities.”
What the county commissioners approved at their Thursday, Jan. 18 meeting is this: They voted to approved the ARP money to be used as replacement funding for Guilford County operating expenditures, which then freed up funds to support projects that were originally slated to be ARP-funded projects.
The funding amount for all the projects remains exactly the same. However, since the move magically transforms federal funds into county funds, the federal deadlines disappear.
In the words of a memo from county staff to county commissioners, “As ARPA Enabled Projects are funded via county funds, they will not be subjected to obligation and expenditure deadlines for ARPA funding as imposed by the US Treasury. Projects requiring long-term system changes will have the ability to move towards desired outcomes, ensuring that the County is thoughtful and inclusive in their approach to addressing systemic changes.”
Here are a few of the former “ARPA projects” subject to deadlines that will now become “ARPA-enabled” projects that are not subject to the deadlines:
• Windsor Chavis Nocho Community Complex – $15 million
• Pleasant Garden Water/Sewer Infrastructure – $5.5 million
• Recovery Housing – $3 million
• Transitional Therapeutic Foster Care – $1.5 million
• Broadband Initiatives – $391,880
• Infant Mortality Programs – $85,000
• EMT Academy – $393,052
• Food Security Efforts – $774,926
The Greensboro City Council allocated all of its ARP funds to the general fund in August 2022 for similar reasons.