Here’s how you prepare for a generational opportunity.
City of Gastonia
Funds Received: $15.6 million
Gastonia’s approach to the American Rescue Plan is a case study in preparation.
To date, only two expenses have yet crossed the finish line: law enforcement investments, totaling $1.3 million; and reimbursement of direct COVID expenditures, totaling $1 million. The latter was especially important, as Gastonia is a self-insured city and incurred significant costs due to the pandemic.
These projects only scratch the surface of what Gastonia will ultimately achieve. Their plan has been to take a prudent approach, and as such, they’re as well prepared as possible to achieve the full potential of the American Rescue Plan.
Gastonia’s strategy, as coined by City Manager Michael Peoples, is “patience with a purpose.” It’s a prudent approach that recognizes several key elements of the American Rescue Plan: that it is a one-time opportunity, that it can be transformational if executed properly, that it will require significant internal capacity and talent to administer, and that its reporting and accounting requirements can be challenging. Towards these ends, the city has put its focus on preparation.
First, Gastonia acted fast upon the passage of the American Rescue Plan Act in March 2021, and almost immediately developed a list of potential projects. Operating under the U.S. Treasury’s interim guidance, Gastonia formed an internal committee of city leaders that worked to develop a compilation of eligible investments. This list contained all possible projects that met the town’s needs, met the town’s forward-looking priorities, and met Treasury rules. “We were looking only at transformation investments,” Peoples said, reiterating the one-time nature of these funds. “I’ve been in local government 22 years, and nothing like this has ever happened.”
With project ideas developed, Gastonia then took on a more patient approach. They chose not to invest until Treasury had issued its final guidance, which ultimately added flexibility to expending ARP funds; and they waited to see how best they could leverage not just their own ARP distribution, but all of the federal and state money that became available through the state budget, the federal Infrastructure Investment and Jobs Act, and other programs. Again, this patience paid off. The state budget appropriated millions more to the city, they received $2.8 million from the U.S. Department of Housing and Urban Development, and they received additional monies due to their designation as a CDBG entitlement city.
Most importantly, Gastonia looked internally: they focused on employee retention. Using general fund dollars — not money from ARP — Gastonia approved a mid-year compensation adjustment for its staff. “We said, ‘We need to do everything we can to have the right tools and right people in place so we can take full opportunity of this one-time occurrence,'” said Peoples. Also to that end, the city is hiring additional staff that will be solely dedicated to overseeing and administering American Rescue Plan funds.
Capacity, Retention. Mid-year, Manager Peoples and council understood the upcoming situation: federal money would be coming into town in significant quantities, additional funds would be available through new programs and state appropriations, and it’d almost all need to be dedicated to one-time investments. That would require a city staff at full capacity. Plus, the job market brought additional uncertainties. To ensure internal capacity, Gastonia approved a compensation adjustment for staff. “We talk about leveraging, but if you don’t have the right people with the right skillset to do that, then it’s probably just talk,” said Manager Peoples. It was a general fund expenditure.
Capacity, Addition. Using ARP funds, Gastonia is presently hiring for an ARP Grants Manager to oversee and administer the funds. “It was important we bring somebody on to help make sure we’re in compliance, because that is certainly that we’ve talked to our city council about: being deliberate, strategic and compliant,” said Peoples.
Preparation. Gastonia acted immediately upon ARP passage to create a working list of potential projects that would both meet Treasury guidance and meet the town’s goals of making transformational investments. While only a few projects have been ultimately decided upon to date, having the working list will allow Gastonia to move quickly when decisions are soon made. “Through what we’ve done internally, we can get those projects out the door quicker,” said Peoples.
Patience. With the list in hand, Gastonia chose only to spend on the most direct and immediate needs: COVID expenditure reimbursement and a much-needed public safety investment. By waiting, Gastonia can now take advantage of Treasury’s more-flexible final rule.
Citizen Engagement. Citizen input is critical for Gastonia in determining their investments. Again, the working list of projects proved invaluable towards this aim, as it defined to the public the boundaries of what investments were possible and eligible. “We were careful not to get ahead of ourselves,” said Peoples. “We want to only discuss projects that can happen.”
Leveraging other funds. Hand-in-hand with their patient approach, Gastonia made their priorities clear from the beginning: homelessness and affordable housing initiatives. During this patient period, Gastonia has received additional funds from both state and federal sources, and they continue to pursue competitive federal grants. That additional funding, supplemented by ARP funds, will almost certainly go towards those priorities, said Peoples.
Leveraging partnerships. Success towards these goals is even more likely when money is paired with partners. They are working presently to partner with neighboring municipalities and Gaston County.