In 2021, amid a flagging economy and the height of the coronavirus pandemic, the Biden administration and Congress enacted the American Rescue Plan. The sweeping legislation included hundreds of billions of dollars to establish a vaccination program, reopen schools and provide financial support to individual Americans.
It also included more than $360 billion in emergency funding for state, county and local governing bodies, with the goal of improving the lives of Americans by maintaining the operation and quality of their communities.
Now, the time to use that funding is running out. It expires in 2026 and needs to be committed by the end of this calendar year. In 2023, a debt ceiling deal included the return of $27 billion in emergency COVID funding from federal entities. This move also opened the door to discussion of clawing back the unspent emergency funding distributed to smaller municipalities.
With all these ticking clocks in play, government entities in the Greater Peoria area are working to put a bow on their final plans for ARPA spending.
County planning
Peoria County is the largest recipient of funds in the Greater Peoria Area, at $34.8 million. All but $1.4 million of the funds is budgeted for specific projects, with around $8.8 million spent to date. You can see a breakdown provided by County Administrator Scott Sorrel below, outlining 17 different areas receiving portions of the funds.
The largest single project undertaken by Peoria County is construction of the new Health and Human Services Building that utilized $16.6 million in ARPA funds. Other large projects include $2.5 million to survey and plan future broadband infrastructure updates for the county, $4 million for highway outbuildings [including the county’s fleet maintenance facility] and just over $2 million for roof replacement at the county jail and juvenile detention center.
“The county board has really made it a priority to invest in county infrastructure with these dollars, because these are one-time dollars,” Sorrel said. “So we don’t want to create programs and deliver services that, once this money goes away, we’ve got to use property taxes or sales taxes to sustain them.”
There are a few line items on the budget snapshot that may appear demand-dependent at first glance — like the $650,655 remaining to be spent on small business initiatives.
“Most of that $650,000, actually, is locked up in multi-year contracts and agreements that we have with service providers,” Sorrel said.
In total, projects that could be considered “county infrastructure” make up more than $28 million of the budget snapshot. Sorrel said some of the infrastructure projects have come in below budget and the count will need to have conversations about how to allocate the remaining funds. But he’s confident every dollar, including the more than $1.4 million budgeted for “Projects for Board to Determine FY24,” will find a home.
Tazewell County received $25.6 million in total ARPA funds. All of these funds have been committed to projects or already spent. The vast majority of these funds, just over $20 million of them, are planned for the county’s New Justice Center Annex project. You can see a breakdown of spending provided by the county to the right.
“We’re currently in six buildings here in downtown Pekin,” said Tazewell County Administrator Mike Deluhery. “And this is going to give us an opportunity to consolidate a lot of our operations and make them more efficient.”
The new Justice Center annex also has improvements to security lacking in the current county courthouse.
Tazewell’s second largest spending target for ARPA funds is the construction of a health department satellite office, at $3.9 million. The remaining funds are split between hazard pay for essential workers (around $1.2 million), making up for lost revenue [just over $439,000] and the hiring of an ARPA funds consultant for $20,000.
Woodford County received just over $7.5 million. You can see February’s monthly report on the funding’s status, which does include some projects that won’t be happening anymore, on page 148 of the board’s monthly agenda packet here.
The largest project, at a revised budget of $3.87 million, is a replacement of the HVAC system in the Woodford County Courthouse. Other notable expenditures include almost $100,000 for COVID testing and treatment, over $115,000 on new election booths and voting machines and just over $180,000 for body cameras for the sheriff’s office to meet SAFE-T Act requirements.
“The focus was on improving our services and our communities for all of our taxpayers and stakeholders,” said county board chairman Chuck Nagel. “And that’s how we focus on where the funds should be. So when someone hears about new heating in the courthouse: ‘big whoop,’ it’s important because of the people working there and the people visiting and so on.”
In total, the three counties received $68,031,244 in American Rescue Plan Funding. More than $56 million of that funding is spent on or budgeted for infrastructure projects and capital improvements to county buildings. Around $4.7 million is spent on or budgeted for county employee and operations needs, like COVID hazard pay and IT cybersecurity projects.
Notably, Peoria County is the only county budget including public programs like business grants and health resources, to the tune of $2.5 million. Woodford County is the only county with significant spending on specific law enforcement needs, with over $583,000 dedicated to items like body cams, a full body security scanner and mobile computer systems.
City planning
Of the five cities reviewed for this story, Peoria received the most American Rescue Plan Funding by a wide margin, at just under $47.1 million. The programs and needs fulfilled by the funding are diverse. City Manager Patrick Urich said the city has spent about $25.4 million, with much of the remainder budgeted into large buckets of spending areas.
One of the early expenditures for the funds was $10.3 million for lost revenue during the pandemic. Like in Tazewell’s use of funds for lost revenue, the money made up for cash that would regularly be coming into the government entity that was absent during the Covid-19 pandemic. Urich uses a loss in sales tax as an example.
“With the drop in economic activity, with the spike that we saw in 2020 due to unemployment, we saw a real shrinkage in the amount of sales tax that we were normally able to collect,” he said. “So this money went in to offset that kind of lost revenue that we saw just from people not spending money during the first year of the pandemic.”
Moving into budgeted areas, $16.1 million is budgeted for infrastructure spending. Some infrastructure projects benefiting from the funding include street lighting on Nebraska Avenue, mill and overlay work on Prospect Road and replacement of a stretch of road MacArthur Highway. $6.5 million contributes to neighborhood programs like vacant home demolitions, housing rehabilitation, down payment assistance and neighborhood grants.
For economic development, $7.6 million is allocated for small business grants and commercial facade rehabilitation. There’s also money there for programs with Distillery Labs, the tourism and hospitality industry, and a pilot program from the Racial Justice and Equity Commission’s Economic Development Committee to provide workforce transportation.
There’s $3 million budgeted for violence prevention funding, which has been distributed partially through grants over the last few years, a $1.2 million remainder there will aid violence prevention through environmental design programs. Another $1.2 million is budgeted for health equity spending, matched by the Peoria City/County Health Department. Urich said that was used for housing programs.
That all adds up, both spent and budgeted, to about $45 million. Urich said the remainder, about $1.6 million, went to administrative costs: marketing the programs, hiring the staff to manage them and paying their benefits.
“[ARPA dollars] are a big part of us being able to catch up on some infrastructure needs, focus on our neighborhoods, really lean in on economic development, particularly for our small business community,” said Urich. “And I think that’s what the federal government intended for us to do with the money.”
However, Urich does acknowledge that some demand-based programs, like the neighborhood grants, housing rehabilitation and down payment assistance, may need to refocus if their funds aren’t depleted by the end of the year.
“We’re really going to have to look at re-authorizing those dollars to go in a different direction,” he said. “Maybe putting it into infrastructure or other aspects of it that we know that we can spend quickly. Just to ensure that the dollars are spent and obligated by the end of this year.”
According to East Peoria Finance Director Jeff Becker, the city received just $3 million in ARPA funding.
“We spent some of it on a new [Enterprise Resource Planning] software system and the rest of it has been spent on road projects,” said Becker.
He did not have the cost of the software system readily available for time of publishing, but this story will be updated when it is provided.
One of the road projects that already received East Peoria’s ARPA funds include the Grange Road Project. A remainder of $900,000, budgeted but not spent, is expected to aid with a Veterans Bridge replacement and an upgrade to Camp and Washington Streets.
Washington received $2.4 million in funding, Pekin received around $11 million and Peoria Heights received just under $800,000. These cities are grouped together because their spending strategies for the money are all similar: covering the salaries of law enforcement and fire departments to enable spending elsewhere.
Washington Administrator Jim Snider said their full balance went towards offsetting public safety employee costs.
“Police costs, employee costs, benefit costs, all of those things were eligible,” he said. “And so that was our determination, administratively.”
Snider says he expects freed up money in the general fund can contribute to road and infrastructure projects in Washington.
It’s a similar picture in Peoria Heights, where the full balance was used to cover police salaries over a two year period. City Administrator/Police Chief Dustin Sutton says the funding maintained salaries as they were previously negotiated. Some of the “freed up” funding was used to purchase additional equipment for the department, including two new vehicles, training and a drone.
At the time of the ARPA fund disbursements, both Peoria Heights and Washington had primarily volunteer fire departments, so these were primarily police salaries. This is not the case in Pekin, where $10 of their $11 million was put towards both police and fire salaries, covering roughly two quarters of a year. Interim Finance Director Bob Grogan said the remainder will refurbish a pair of fire trucks.
As Grogan explains, for smaller municipalities, covering a portion of public safety salaries to free up spending for other infrastructure projects was just a safe bet for ARPA spending.
“You always have the risk that the feds can change their mind, right? They can go and say ‘hey, who hasn’t spent the money, we want it back,’” he said. “And if you’re spending it on, say, a big infrastructure project…that just takes years and years to do.”
Grogan uses a straightforward metaphor.
“From an administrative standpoint, it’s much easier to spend it on dinner, as opposed to spending it on repainting your porch. It’s just simpler to get it done.”
Notably, out of the approximately $64.2 million total allocated to Greater Peoria area cities through the American Rescue Plan Act, over $13 million aided in covering salaries for public safety employees. It’s difficult to quantify exactly how much impact this had in “freeing up” funding for other infrastructure and capital improvement programs.
Without exact numbers from East Peoria, it’s difficult to say exactly how much was spent and budgeted on infrastructure and capital improvement projects. But, with Peoria’s infrastructure and neighborhood spending combined with East Peoria’s budget for future projects, the total breaks $23 million.
Whatever the final use of the remainder of the funds, Peoria and the counties appear prepared to pivot on programs, and find a way to get the last of the American Rescue Plan assistance out the door before the 2026 deadline.