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AP
AP: States and cities slow to spend federal pandemic money

As Congress considered a massive COVID-19 relief package earlier this year, hundreds of mayors from across the U.S. pleaded for “immediate action” on billions of dollars targeted to shore up their finances and revive their communities.

Now that they’ve received it, local officials are taking their time before actually spending the windfall.

As of this summer, a majority of large cities and states hadn’t spent a penny from the American Rescue Plan championed by Democrats and President Joe Biden, according to an Associated Press review of the first financial reports due under the law. States had spent just 2.5% of their initial allotment while large cities spent 8.5%, according to the AP analysis.

Many state and local governments reported they were still working on plans for their share of the $350 billion, which can be spent on a wide array of programs.

Though Biden signed the law in March, the Treasury Department didn’t release the money and spending guidelines until May. By then, some state legislatures already had wrapped up their budget work for the next year, leaving governors with no authority to spend the new money. Some states waited several more months to ask the federal government for their share.

Cities sometimes delayed decisions while soliciting suggestions from the public. And some government officials — still trying to figure out how to spend previous rounds of federal pandemic aid — simply didn’t see an urgent need for the additional cash.

“It’s a lot of money that’s been put out there. I think it’s a good sign that it hasn’t been frivolously spent,” Louisville Mayor Greg Fischer said. He was president of the U.S. Conference of Mayors when more than 400 mayors signed a letter urging Congress to quickly pass Biden’s plan.

The law gives states until the end of 2024 to make spending commitments and the end of 2026 to spend the money. Any money not obligated or spent by those dates must be returned to the federal government.

The Biden administration said it isn’t concerned about the early pace of the initiative. The aid to governments is intended both “to address any crisis needs” and to provide “longer-term fire power to ensure a durable and equitable recovery,” said Gene Sperling, White House American Rescue Plan coordinator.

“The fact that you can spread your spending out is a feature, not a bug, of the program. It is by design,” Sperling told the AP.

The Treasury Department set an aggressive reporting schedule to try to prod local planning. It required states, counties and cities with estimated populations of at least 250,000 to file reports by Aug. 31 detailing their spending as of the previous month as well as future plans.

More than half the states and nearly two-thirds of the roughly 90 largest cities reported no initial spending. The governments reported future plans for about 40% of their total funds. The AP did not gather reports from counties because of the large number of them.

To promote transparency, the Treasury Department also required governments to post the reports on a “prominent public-facing website,” such as their home page or a general coronavirus response site. But the AP found that many governments ignored that directive, instead tucking the documents behind numerous navigational steps. Idaho and Nebraska had not posted their reports online when contacted by the AP. Neither had some cities.

Officials in Jersey City, New Jersey, required the AP to file a formal open-records request to get its report, though that shouldn’t have been necessary. City employees in Laredo, Texas, and Sacramento, California, also initially directed the AP to file open-records requests. Laredo later told the AP it had spent nothing. Sacramento relented and eventually provided a short report stating it had spent nothing but might put its entire $112 million allocation toward replacing lost revenue and providing government services.

Among states, the largest share of initial spending went toward shoring up unemployment insurance trust funds that were depleted during the pandemic. Arizona reported pouring nearly $759 million into its unemployment account, New Mexico nearly $657 million and Kentucky almost $506 million.

For large cities, the most common use of the money was to replenish their diminished revenue and fund government services. San Francisco reported using its entire initial allotment of $312 million for that purpose.

Those reporting no initial spending included Pittsburgh, whose mayor joined with several other Pennsylvania mayors in February on a column urging Congress to pass “crucial” aid for state and local governments.

“Congress must act, and they must act soon. Our communities cannot wait another day,” the Pennsylvania mayors wrote.

Pittsburgh ultimately ended up waiting to spend the money until the Treasury guidelines were released, community members had a chance to comment and the City Council could sign off on the spending plans. In the future, the city plans to use part of its federal windfall to buy 78 electric vehicles, build technology labs at recreation centers and launch a pilot project paying 100 low-income Black women $500 a month for two years to test the merits of a guaranteed income program.

The federal money also will help pay the salaries of more than 600 city employees

“Even though the money hadn’t technically been expended” by the Treasury Department’s reporting timeline, “the receipt of the money was enough for us to hold off on major layoffs,” said Dan Gilman, chief of staff to Pittsburgh Mayor William Peduto.

Some officials are intentionally taking their time.

Missouri Gov. Mike Parson, a Republican, opted not to call a special session to appropriate money from the latest federal pandemic relief act. So far, he’s publicly outlined just one proposal — $400 million for broadband.

Parson’s budget director said the administration will present more ideas to lawmakers when they convene for their regular session in January. Until then, the state should have enough money left from a previous federal relief law to cover the costs of fighting the virus, budget director Dan Haug said.

“We want to try to find things that are going to benefit Missouri not just next year or the year after, but 10 or 20 years down the road,” Haug said. “That takes some thought and some planning.”

Republican state Rep. Doug Richey, who leads a House panel on federal stimulus spending, said he’s not convinced Missouri needs to spend all of its American Rescue Plan funds.

“To the extent that we spend these dollars, we are participating in an ever-increasing federal debt or bad monetary policy,” Richey said.

Missouri was one several states that waited to request its initial allotment. Five other Republican-led states — Oklahoma, South Carolina, South Dakota, Tennessee and Texas — waited so long that they weren’t required to file reports by the Treasury’s Aug. 31 deadline.

Tennessee wanted to make sure small cities were prepared for a 30-day clock that starts ticking for them to seek funding once the dollars arrive at the state, said Lola Potter, a spokesperson for the state Department of Finance and Administration. A South Dakota official cited similar reasoning for the delay. Financial Systems Director Colin Keeler said it’s difficult for small towns to take the steps needed to apply.

“The state was in no rush at all,” he said. “The cities wanted to get theirs, but we needed to be prepared.”


featured
NET reported second most new cases ever in September

Month 19 of the COVID-19 pandemic was a difficult — and deadly — one for Northeast Tennessee, with the region reporting its most new cases and deaths since last winter’s devastating surge.

Across the region’s eight counties, there were nearly 14,000 new coronavirus infections reported in September, along with at least 178 deaths. At least 1,395 Northeast Tennesseans have died of COVID-19 thus far.

September was, in many ways, the worst month of the pandemic since December 2020, though a record 233 people were reported to have died of COVID-19 in January 2021. September’s 13,979 new infections trail only December’s total of 15,141, while the 178 deaths are the third most ever reported behind January’s toll and December’s toll of 226.

Between August and Sept. 30, there were at least 26,000 new cases reported in Northeast Tennessee, the most of any two-month period during the pandemic, surpassing the roughly 23,900 new cases reported between Nov. 1 and Dec. 31. Five counties reported at least 1,000 new infections last month, led by Sullivan County’s 3,963. Washington County reported 2,815 new cases in September, followed by Greene County’s 2,449.

There were 317 new hospitalizations reported in September, the third most ever reported in a single month and the most reported since December. In August, the region reported 305 new hospitalizations, with a record 449 reported last November, according to the Tennessee Department of Health’s data.

Last month also saw the number of patients hospitalized at Ballad Health’s hospitals reach a record high of 413 on Sept. 8 — exceeding the winter surge peak of 361 on Jan. 5. As of Friday the number of people hospitalized with COVID-19 at Ballad facilities was down to 301, with 90 people in intensive care and 66 on ventilators.

Fortunately, the number of new infections appears to be slowing, with just 1,920 new cases reported over the last week — down 29.4% from the week prior. The decline is even more apparent over the last two weeks, with new cases down 45% from the previous two.

And while the worst of this surge may be behind us, the virus is still circulating enough that the possibility of another winter surge is a concern for health officials.

“I am concerned as we move into the winter months where we move inside that, if people are not masking appropriately, if they have not gotten the vaccine, I think we could potentially see another surge in the winter like we saw last year,” Ballad’s Chief Operating Officer Eric Deaton said Wednesday. “Although I am optimistic we are seeing a decline based on the data we’re seeing, I think we could see a surge again just based on people coming together again and moving more inside.”

Vaccine uptake, however, remains low in Northeast Tennessee.

As of Friday, just 44% of the region’s population has been fully vaccinated, below the statewide rate of 46%. Of the eight counties in Northeast Tennessee, only Washington County has fully vaccinated at least half of its population, while Sullivan (50.96%), Unicoi (51.13%) and Washington (58.49%) are the region’s only counties with more than half its population at least partially vaccinated.

New vaccinations are trailing off though, with new vaccinations over the last two weeks down 25.7% over the previous two. In September, 12,636 people received a vaccine across the region which, while up from July’s total, is down 41.2% from August’s total of 21,504.

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Local-news
centerpiece
Cement Hill has some new residents: a tribe of goats

KINGSPORT — If you’re driving down Main Street and see a tribe of goats on Cement Hill, don’t worry. They’re there for a reason.

Kingsport has placed roughly 50 of the animals on Cement Hill within the confines of an electric fence to help clear the land of kudzu for future development.

According to a release from the city, the goats are eating the invasive plant species in an effort to clear the site in an environment friendly way without using chemicals or risking employee safety. Some parts of the hill can’t be cleared by mechanical means, the city noted.

And as the goats clear sections of the hillside, the fence will move, until all of the property is cleared. The grazing should take about a month to complete.

Kingsport officials are asking the public to admire the goats from a distance, as they have a job to do. The local goat provider, as well as city staff, will regularly check on the animals to ensure their safety.

Cement Hill is slated to become a park with walking trails and overlook spots. Work on these projects is scheduled to begin next year.


Business
featured
Davis-Bacon Act adds net of almost $88,000 to D-B cooling tower project

KINGSPORT — The federal Davis-Bacon Act will help some workers on a local school project bring home more bacon.

But that extra bacon is giving financial heartburn to officials of the affected school system.

Some pipe fitter assistants are going from $13 an hour to more than $42 an hour on a job at Dobyns-Bennett High School. Kingsport City Schools officials are faced with unexpected increased expenses from that and other mandated pay increases.

So a $1.3 million-plus cooling tower replacement at D-B will cost almost $88,000 more than the originally accepted bid because of the federal minimum wage requirements, according to KCS officials.

Additionally, the increase could have been almost $118,000 if the school system and its engineering firm, Holston Engineering of Johnson City, hadn’t found something that could be taken out of the bid and a decrease in one trade area: carpentry.

The Davis-Bacon Act will have an impact on spending on all federally funded projects paid for by the Elementary and Secondary Emergency Relief Act or ESSER. The system has the following amounts that add up to more than $26.3 million: ESSER 1.0 $1,685,794.98; ESSER 2.0: $7,603,109.14; and ESSER 3.0: $17,075,503.09.

COOLING TOWER PRICE GOES UP

During Tuesday night’s Board of Education meeting, the board voted 5-0 to approve a change order on the D-B cooling tower replacement reflecting the requirement. It is because the project is funded by federal COVID-19 relief money from the ESSER funds.

The only compliant bid came from S.B. White Co. of Johnson City and was accepted by the board in June and implemented July 28, 2020. The bid amount was $1,324,000. However, the Davis-Bacon Act requirements added $117,845.85 to that cost.

The only saving grace, according to KCS Chief Finance Officer David Frye, is that the original bid could be reduced $29,988.42 because part of the project, a chemical feed system, was deleted because it is already supplied.

Still, the net result was an $87,857.43 increase in the contract to $1,411,867.43, Frye told the board before the vote.

DAVIS-BACON DROVE THE INCREASES

The minimums are based on federal requirements for federally funded projects in Davis-Bacon.

Frye said the money is basically flow-through for the contractor and will benefit mostly pipe fitters and electricians, although an “overhead” amount of $6,103.43 is included in the increase by the contractor. If the project were paid for by local funds, no such increase in worker wages or overhead would have been required.

Documents presented to the school board from the engineering firm indicate the pipe fitter foremen, pipe fitters and helpers will go from $25, $20 and $13, respectively, to $42.46 an hour.

Electricians will go from $24 to $33 an hour, while web insulator mechanics at $17 and hour and helpers at $13 an hour will go to $42.46 an hour and iron workers from $28 to $44.29 an hour.

The only category to decrease was carpenters, from $36.74 to $28 an hour.

Frye said the bids were made without knowledge of what the Davis-Bacon minimums were for such construction and that highway construction worker minimums were used by all bidders. However, after the winning bid was chosen, Frye said the federal government put out information about the pay minimums for such construction projects higher than the road work minimums. Documents date that new information Jan. 1, 2021.

Board member Todd Golden said at least the money likely will go to local workers helping support the local economy, but Superintendent Jeff Moorhouse said the school system will face similar situations in all ESSER-funded projects, including the renovations of the Sullivan North High/Middle schools campus into the new Sevier Middle School.

Frye earlier this year said some bids for all projects, ESSER funded or not, are expected to come in higher than otherwise because of the increased demand for construction work driving by federal COVID-19 dollars for school systems and governments in general.

He said that could drive prices up as the number of bids per projects goes down because of a wealth of projects on which contractors to bid.

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Team members walk through pit row in the rain Sunday at Talladega Superspeedway in Talladega, Ala.


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