Throughout the COVID-19 pandemic, Heartspring — a nonprofit that provides services and education to children with special needs and developmental disabilities — spent $109,000 on personal protective equipment and cleaning equipment. They paid $1.24 million in COVID-related personnel costs.
They’ve also lost $170,000 to rescheduled, modified or canceled events and $2.12 million in revenue when the facility was forced to shut down.
These added expenses and lost revenues throughout the pandemic built up. To offset them and add new programs the organization sees a need for, Heartspring is seeking $14 million in COVID relief funds from the city of Wichita, Sedgwick County and the state of Kansas. Heartspring wants access to American Rescue Plan Act (ARPA) funds, of which Wichita was granted $72.4 million, Sedgwick County $100.2 million and the state of Kansas about $1.6 billion. The funds can be used broadly to offset the impacts of the pandemic — from replacing lost government revenue to direct assistance to households, small businesses and nonprofits.
But after receiving the first half of the federal dollars in June — the next half will be distributed in May 2022 — Wichita has spent none of it, and the county has spent around $11.3 million. Neither has released dollars to households, small businesses or nonprofits.
“The need is now. The need is not a couple years from now,” said Rachel Mayberry, senior director of public policy and communications at Heartspring. “The longer we wait to use the rescue funds for their intended purpose, I believe the more small businesses and nonprofits you are going to see having to decrease services or close their doors.”
But Wichita is not alone in its slow rollout of ARPA funds. The majority of cities with more than 250,000 people spent none of the federal funds, according to the first ARPA expenditure report released Aug. 31. The federal government does not require that the funds are spent until December 2026 — though they must be obligated by 2024.
Wichita’s plan to spend ARPA dollars
The city established a rough spending plan in the budget the City Council passed in August. That splits ARPA funds into two buckets:
- $52.4 million toward internal needs, including restoring city positions left vacant during the pandemic, investing in capital projects and filling future budget shortfalls.
- $20 million toward three community investment initiatives, in affordable housing, small business and workforce development.
Only $2.2 million of the funds for internal needs were meant to be spent in 2021. The money was allocated for rehiring staff positions held vacant during the pandemic.
“We now believe that we will be able to rehire positions without utilizing as much ARPA funding as previously predicted,” city spokesperson Megan Lovely wrote in an email to The Wichita Beacon.
The majority of the $20 million allocated for community investment, which nonprofits and other community organizations could be eligible to receive, would be spent in 2022, according to the budget.
City Manager Robert Layton gathered an advisory committee throughout the fall to study and recommend the creation of an affordable housing trust fund to the City Council.
“The affordable housing group is almost complete with its recommendations,” Layton said at a Nov. 16 council meeting. “We are hoping to have something to the Council on affordable housing possibly in December.”
The city is preparing solicitations for proposals for the small business and workforce development investment areas, Lovely wrote. The City Council is expected to consider those proposals in mid-January.
City Council member Becky Tuttle also suggested at a Nov. 23 council workshop to add a category to the community investment initiatives — investing $2.5 million to combat food deserts around Wichita.
The city established the focus on the initial three community investments — affordable housing, small business and workforce development — through a social media town hall and presentations to District Advisory Boards earlier this summer. The community engagement efforts did not include addressing food deserts as an option for ARPA funding.
Sedgwick County’s plan to spend ARPA dollars
Sedgwick County initially planned an even greater rollout of ARPA funds in 2021, laying out a $42.9 million 2021 spending plan in September. That money was set to primarily address internal county needs:
- $9.3 million for the public health response to COVID.
- $9.8 million to fix a court backlog.
- $20 million for employee premium pay, which awarded county employees for work hours in which they were exposed to the coronavirus between March 2020 and March 2021.
So far, the county has spent $11.38 million. The majority of that spending — $10.22 million — has gone toward employee premium pay. The rest has largely funded the costs of staffing COVID testing and vaccine sites, as well as paying for the lease of a county COVID testing site at Harry Street.
“When we put the spending plan on place, I don’t think we had quite the full realization of how long and how arduous the federal procurement requirements were really going to be in action,” Sedgwick County Chief Financial Officer Lindsay Poe Rousseau said.
But how the county might distribute ARPA funds to community organizations like Heartspring hasn’t yet been determined, Poe Rousseau said. Instead, the county is still collecting feedback on where it should focus the funding through a survey on its website. The county also gathered feedback this summer on how to prioritize ARPA money through six focus groups and a county-wide survey of almost 1,500 people.
Poe Rousseau hopes to have the focus areas for community spending decided and open for grant applications in spring 2022. She added that this gives the county more time to see what programs the state of Kansas will fund with its $1.6 billion in ARPA dollars.
“What we do not want to do is create a duplicative program,” Poe Rousseau said. “We want to try and step in with specialized programs for our area to fill gaps that aren’t addressed through other areas.”
But Mayberry said she is concerned that waiting to distribute the funds until after the state has laid out its programs puts organizations behind. The state committee overseeing the distribution of state ARPA funds, the Strengthening People and Revitalizing Kansas (SPARK) Executive Committee, is explicitly looking to partner with local governments to maximize funding.
“They’re looking for solutions or opportunities to fund that have braided funding from the city or county,” Mayberry said. “Because the SPARK committee is moving forward a little more quickly than Wichita or Sedgwick County, that puts organizations within Sedgwick County at a disadvantage to other parts of the state.”
The state narrowed down its buckets of funding in September and completed its public listening sessions in November. But a process for how the public can submit funding proposals, and how the state will evaluate them, has not been established.
Cities slow to distribute ARPA dollars
Compared to other major cities across the country, Wichita is not alone in spending none of its ARPA funds.
Seventy-four percent of cities over 250,000 people had not spent any ARPA funds by July 31, the only spending report cities have filed regarding ARPA dollars, according to a dataset gathered by the Associated Press. The next report is due Jan. 31.
Only eight cities had spent more than 10% of their ARPA funds.
A slow rollout of ARPA funds is “not necessarily surprising nor worrisome,” according to the Brookings Institution. Cities have only received half of their ARPA dollars — the second half comes next May — and the U.S. Treasury Department still has not issued final rules for how ARPA dollars can be spent. Poe Rousseau said this was a major concern for the county when rolling out programs.
Another roadblock is that cities and counties are waiting to learn more about other federal money that may be coming in the next several years. The federal Infrastructure Investment and Jobs Act, which passed Nov. 6, may fund initiatives like broadband access that can also be funded under ARPA.
“Cities are waiting, some, to know if there’s more coming from the federal government,” said Eli Byerly-Duke, a senior research assistant at the Brookings Institution. “My sense is that most folks don’t know what all is there yet.”
Poe Rousseau confirmed that Sedgwick County is weighing the infrastructure bill as it considers ARPA spending.
“That’s going to cover, we would imagine, all of the broadband needs that have come up,” Poe Rousseau said. “We want to make sure we’re using the infrastructure bill strategically and free up ARPA money to do other things.”
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