New Hanover makes updates to spending strategy for federal Covid-19 relief

NEW HANOVER COUNTY –– After the signing of the American Rescue Plan Act (ARP) in March, New Hanover County officials learned their portion of federal Covid-19 relief would be $45.5 million. Local government leaders composed a guidebook for their spending strategy released later that month. 

As the U.S. Treasury Department began to offer guidelines on how the federal money could be spent, the plan was reworked and refined to remain compliant with federal oversight. At the board of commissioners meeting next week, county leaders will vote on a budget amendment to establish a multi-year fund for the money. The first half, around $22.8 million, has already hit the county’s account, with the second half expected next year. 

The differences between the original ARP spending strategy and the revised plan that will be voted on next week are as follows:


Subtractions 

Water and Sewer: One idea proposed in March was to use around 9% of the federal Covid-19 relief dollars to extend water and sewer infrastructure on Sidbury Road, a northern area of the county in which development has been slow due to the lack of utilities. The county planned to extend utility lines on a route that would run directly up to an incoming residential development project. Updated Treasury rules outline that “necessary investments” in water and sewer were eligible in places “unlikely to be made using private sources of funds.” 

Since the developer was already in the process of paying for this work themselves, it’s ineligible to be funded with ARP dollars. More than $3 million will still go to adding utility infrastructure in the unincorporated county, but it is presently unclear where.

A $500,000 “bill assistance” program will be considered as an addition to the ARP strategy, which will provide financial relief to utility customers “negatively impacted by the pandemic.”

Stormwater Services: The county planned to use $3 million to cover the implementation of the new stormwater services fee in unincorporated areas of the county. It was determined a portion of the stormwater services item amounted to paying “debt and reserves,” and so some of the money was reprogrammed elsewhere. The fees recently kicked in at a heavily discounted rate locally, at $1 a month this fiscal year for average single family residents, before rising to $5.65 the following year sans federal assistance.

Sales Tax Revenue: According to county documents, revenue replacement was green-lit as a proper use of funds in the act’s Congressional language, but the Treasury rules offered a “more complicated process to arrive at a figure for revenue replacement,” involving equations for growth adjustment and unexpected formulas. “When staff recalculated based on these rules, we found no net loss of revenue,” according to documents. Therefore, the plan to use $3.2 million for sales tax reimbursement was reconsidered. 

Employee premium pay: The county plans to offer bonuses to employees who worked during the pandemic, and a separate payment for those specifically working within the vaccine response. Since Treasury rules prohibit “providing premium pay for those who exclusively teleworked from a residence,” the county plans to move $263,000 from the general fund to pay for bonuses for employees who worked remotely this past year. 

Additions

Numerous spending items have been introduced since the initial rollout of the strategy in March.

Afterschool transportation: $1.2 million for New Hanover County Schools after school and tutoring program transportation needs.

Workforce Rental Housing Assistance: Establishes a $600,000 pilot project to provide direct payments to the landlords of qualified renters.

Infant and Toddler Mental Health: “Provide two years of recovery-related mental health services for families with infants and toddlers through five county staff positions at Health and Human Services”: $891,994.

Other programs under $300,000: Chamber of Commerce apprenticeship program ($110,000); job training ($250,000); Senior Resource Center virtual outreach position ($86,406); scholarships for students pursuing careers in childhood mental health ($100,000)


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