The head of the Kentucky League of Cities told lawmakers in Frankfort earlier this week federal funding provided by the American Rescue Plan will help but won’t be a cure-all for local needs.
J.D. Chaney, KLC’s executive director and CEO, gave the General Assembly’s Interim Joint Committee on Local Government an overview of the $931 million in fiscal recovery funds made available to cities across the state.
“This doesn’t fix lingering policy issues,” he said. “These are one-time funds that won’t be reoccurring.”
The lion’s share, more than $607 million, will go to nine cities that serve as principal communities of metropolitan areas. They are Ashland, Bowling Green, Covington, Elizabethtown, Henderson Hopkinsville, Lexington, Louisville and Owensboro. The communities will receive funding directly from the federal government.
The remaining money will be doled out to the other 405 cities across the state through the Kentucky Department for Local Government.
The funds can be used in a variety of ways, including mitigating the pandemic’s effect on the local economy, supporting the local health response, covering premium pay to essential workers and upgrading water, sewer and internet infrastructure.
It cannot be used to pay down debt or settlements, nor can it be used to replenish rainy day or other surplus accounts.
He added that guidance from the federal government to municipalities is still a work in progress.
“We have a lot of unanswered questions from the United States Department of Treasury,” he said. “They’re updating their FAQs, their interim final rule as we go along.”
One thing though that will help communities is that they don’t face impending deadlines to spend the money.
Unlike initial federal funding from the CARES Act, which was reimbursement based and required cities to beat deadlines to recoup the money, the Rescue Plan funding must be allocated by the end of 2024.
Chaney said local communities should be “deliberative” in their approach to spending the money.
“We’re not in a rush to meet a looming deadline,” he added.
Kentucky’s cities weren’t the only ones receiving funding. All 120 counties did as well to the tune of nearly $868 million. The state also received an allocation of $2.1 billion, which it plans to spend on water and broadband infrastructure development and school construction.
This article was originally posted on Kentucky cities need more than to fix problems