In order to meet a federal COVID-19 relief funding deadline by the end of the year, Leelanau Township is starting discussions of how they can best repurpose American Rescue Plan Act (ARPA) funds in the months ahead.
According to the Michigan Township Association, townships have until Dec. 31 to obligate their allocation of federal ARPA funds, however, the funds must be fully spent by Dec. 31 2026. If funds are not obligated or spent by these deadlines, they will have to be returned to the U.S. Treasury.
The board was also informed about the fast approaching deadline during its 2023-2024 audit presentation last month, where the township’s auditor, Michael Cool, UHY Advisors managing director, addressed the “liability” and leftover ARPA revenue of $140,000 noted as of March 31. The ARPA funds are considered “unearned revenue,” and Cool suggested that the board take action on project priorities before the end of the year.
The monies were originally to be distributed to local and state governments to mitigate the fiscal impacts of the COVID-19 pandemic. Funds can be used to provide government services affected by a revenue reduction during the pandemic, to make necessary investments in water, sewer, and broadband infrastructure, and to respond to the pandemic emergency and address its negative economic impacts. In addition, it can be used to provide premium pay for essential employees performing an essential function in the pandemic, emergency relief from natural disasters, surface transportation infrastructure, and Title I projects, which includes community development in line with the federal Housing and Urban Development Community Development Block Grant program. ARPA prohibits the use of the funds for pension or to offset revenue loss due to a tax cut.
Trustee Gina Harder began the discussion at the township’s regular board meeting last week, bringing up one of the first ideas to repurpose funds. Harder said the township previously obligated $60,000 in ARPA funds to assist households with solar energy. As part of the comprehensive energy assistance program in partnership with Cherryland Electric Cooperative, Harder explained that the township’s contribution of $6,000 helped to lease solar panels for eligible households. In the last 2.5 years, she said they have only been able to enroll at least three households, but with a fourth household in queue, she thought it was considered “at risk” of losing those funds due to the Dec. 31 deadline.
“It seems to take a long time to get people through the vetting process and there’s a limited number of people who qualify…” Harder said. “So because we have to have all of our funds obligated by December of this year and we only have one person in the queue, I think we’re at high risk of having to forfeit that money… My recommendation is that we would close the program to new applicants, and that would leave us with $36,000 that we would need to obligate before Dec. 31 this year.”
Mike McMillan, township supervisor, touched on their second idea for repurposing ARPA funds. Since 2022, the county and township have been working together to move forward with plans to construct a telecommunications tower. In that time, several major actions were taken, like the township passing a resolution urging the county to assist with their coverage shortfalls, and the board’s approval to commit $100,000 in ARPA funds towards the project. With the tower project on hold since April now, McMillan said that one of his biggest concerns is the funds being potentially at risk of being returned.
“For one, if it doesn’t get approved, it has to go to another whole tower process. Two, if it does get approved but it gets litigated… that can extend how long that lasts,” McMillan said. “So we’re at risk of losing $100,000 if things don’t fall into place properly for us.”
While no action was taken, McMillan suggested that the township follow up on its commitment of $100,000, but to take it from a fund with reserves such as the general or facilities. The $100,000 from the ARPA would then be repurposed to another commitment in the community, he explained.
“We have a couple months to work through it. I just want to make sure that county commissioners understand we’re committed to that $100,000 on the tower, and I think what this does is it kind of takes the handcuff s off for us so they can just move forward with an improved process overtime,” he said. “I think the community can come back with suggestions and that can get through the board in the next three months. Again it doesn’t take away our commitment to the tower, it just takes away that it has to be done by a certain period of time.”
