“An opportunity for a once-in-a-lifetime investment”
Who in your community felt the effects of the pandemic the most and who might not have been affected as much?
The impact in Dayton was largely felt in our hospitality and service sectors, as well as some of the auto component manufacturing jobs. Many of our residents are in entry-level positions and struggled with unemployment during the pandemic.
Another major impact in our community was felt around digital equity. Families who don’t have computers at home, or don’t have high speed connectivity, or couldn’t take advantage of the shift to work from home easily as others could.
Largely, the people who who struggled the most were those who had the least resources. So in our majority Black and Brown neighborhoods in our low income neighborhoods, those residents had the greatest struggle, while other other residents who had more resources were able to accommodate the shift to working from home, schooling from home and working through the pandemic.
The pandemic impacted everybody. The shutdown was huge for the business community, people working, people paying rent, our schools, especially our young people converting to distance learning. And it was also huge for our own employees. I think one of the biggest things that we were able to do during this pandemic was to continue county services. Our employees continued to come to work, water and sewer continued to flow, Job and Family services continued. Our emergency management team continued to do what they do along with managing our strategic reserves of PPE.
The NAACP Dayton Unit covers Montgomery County and I can tell you that the Black and Brown communities faced tremendous hardship. They were a lot of the frontline workers during the pandemic. We applaud the City for putting on a lot of different work sessions for the people who wanted to go out there and apply for those awards and grants. When we think about what was said during each of those sessions, the strongest recommendation was that the Black and Brown minority-owned businesses need assistance.
One of the US Treasury’s main objectives is addressing the disproportionate impact on marginalized communities and on minority communities. Could talk about what you are planning to address those impacts?
Knowing that the impact was greatest in our low-income and marginalized, historically Black and Brown neighborhoods, we set out to put together a process that would create long-term transformation, that would disrupt multi-generational poverty. Now we know $140 million is a lot of money, but when you put it in perspective, it’s about two thirds of our annual budget. So it’s not going to undo decades of problems.
We wanted to put a plan together that was data-driven, that address racial equity, drives investment into marginalized communities, and looked at a way to leverage that investment with other resources, whether it was other city funding resources from our CDBG funding, whether it was other funding sources from federal state or local government, because the more leverage. the greater impact that we set ourselves up for.
We did have a very robust process, about 10 months in length, where we had almost 2,000 people providing input to give us direction on where to invest. As a result of that, we put a plan before City Commission on that proposed $55 million to improve our neighborhoods. That includes demolishing blighted structures, improving housing conditions, reconstructing sidewalks and curbs, and upgrading parks. We wanted to address quality of life. We wanted to address those areas in our city that were struggling with health impacts from COVID and previous disinvestment.
Unlike CARES, the ARPA funding allowed us to put aside funding for revenue loss. We anticipate quite an impact from the work-from-home revenue loss to our income taxes. We set aside about $36 million for that three-year runway, to be able to keep ourselves whole so that we don’t have to disrupt services to the community. That left $102 million of the $138 million that we received. Nearly two thirds of that $102 million is being invested to benefit minority and low-income populations.
If you’re asking the community to participate in where this money should go, then we should be listening to the community. When we think about individuals who who don’t know the process, yes, they were given opportunities to go through workshops to understand the process, but they needed one-on-one time for additional training and that’s why we sent a letter back on October 28 asking for the City to extend the deadline. The relief funds do not have to be obligated until the end of 2024. I don’t see why why there has to be such a hard cut off.
I believe we do have some great leadership, including Shelley, who’s on this call with us right now. But what I’m saying is that we can still open the door up for other individuals who don’t really truly understand the application process.
With regards to why that money has to be obligated at the end of 2024, we know that there’s a front end tail on this to get all of these contracts in place. We didn’t even have final guidance until the end of January, then you had to vet and make sure that all of the intended uses were compliant with the final federal guidance, then another deep level of vetting if we’re going to be responsible with these tax dollars. It’ll be July, August, before we’re even going to be able to get contracts into the applicants’ hands and some of them will have to wait until the next construction season. Two and a quarter years may sound like a lot of time, but it’s not a lot of time when you’re dealing with the training that it takes for federal compliance.
Could you talk about the approach that Montgomery county is taking and how it’s going to impact marginalized communities that really need the help?
We’ve taken a broader, long-term approach to this and it started a little bit before the pandemic and dovetailed into the pandemic. We defined, through a resolution, racism as a public health crisis. And we didn’t just make it a resolution, we actually put some teeth behind it.
It started with making key investments in certain communities, including in our Northwest Dayton Jobs Center and the Montgomery County Employment Opportunity Center.
And then we also did things like completely pay for a mobile grocery store, because we knew some communities had more than enough in groceries and other communities didn’t have enough that store can move through communities and offer full service grocery. We also invested significant economic development dollars in the Gem City Market.
ARPA is going to involve our strategy of doing a lot of contracting work, because we’re looking at ARPA a lot differently than the work we did with the CARES Act money. We’ll do some very targeted contracting in those projects to make sure that Black and Brown communities get their share of that work.
You say looking at ARPA differently, can you explain that expand a little bit?
With ARPA, the Treasury restrictions are much more vigorous. There are certain buckets and certain areas where the standard is a lot different. Knowing that, we decided to look at ARPA and ask how we can enhance the infrastructure and the service level for our customer investments in water and sewer. We want to make sure that our water and the quality of the sewer water that we’re putting back into the rivers across Montgomery County is of the highest quality.
We had a distance learning challenge from the standpoint of having adequate fiber optic and having the necessary subscriptions, that we needed to make sure that families have the high speed internet that they need. So we want to expand broadband and fiber optic into areas that wouldn’t normally get an opportunity, our rural areas, and our areas inside the urban core. Even if they have the access, they might not be able to afford the subscription.
And we are still the number one player in the emergency rental assistance space. We went through the first $15 million allocation of emergency rental assistance and we will now be turning to a broader utility assistance.
What did you do to solicit input from your community? And what did you learn?
Miami Twp. updates its master plan every 10 years and had begun that process in December of 2019. So our process actually began soliciting community feedback about what’s needed in the township even before the pandemic.
The answers were pretty straightforward. We need the roads replaced. We need park upgrades. And they’re concerned about the Dayton Mall. As the pandemic happened, many of those concerns amplified. Roads maintained the same, but parks became more important as people were less likely to congregate inside and needed more outside venues. The Dayton Mall was certainly stressed by the economic impact of the pandemic on retail businesses and in fact went into bankruptcy. Elements of it are still in bankruptcy or for sale today.
Townships were not included in the ARPA funds until literally the last day before they went final. And so when we began the conversation of how to use this, the Treasury restrictions on our funds went from very specific and narrow in a way that we thought we were going to have to get very creative to actually find good ways to use it to the point to where they now say you can use lost revenue recognition for up to $10 million without documentation. We only have $3 million in township ARPA funds! And so if we consider it all lost revenue, is that the right thing to do with it?
We went slow both because townships were added late in the process and we’re a little more deliberative and conservative because the primary constituents that we have may commute elsewhere, we have a couple of retail areas that we need to take care of. But we aren’t facing a lot of the social problems in the same way that the other municipalities in the county are, and a township’s obligations towards its citizens are different than a city or a county. And so that process has been slow for us.
I thought that the original ARPA plan was going to require to get real creative when the township residents want roads and we were told that the funding could only be used for waterline reconstruction. Do we have water lines that are under roads that need replacement? We didn’t get to that stage, but that’s the kind of conversation and creative thinking I was anticipating. And it doesn’t demand any less creative thinking in the sense that these are all dollars to be leveraged in the most impactful way possible.
What are the restrictions or obstacles to spending this money?
The rules, broadly speaking, are the same no matter the size of the local government. Everyone has the ability to put the money into a category of lost revenue and then it’s sort of unrestricted. The interesting thing about ARPA funds, generally, are that they are defined by these four categories, a little different than CARES funding. And so what we’re hearing from communities and also the state as it tries to administer its allocation is that everyone is struggling around these purpose-built funds and trying to fit within these categories.
Everyone has a lot of places have these community priorities that have been defined through master plans or community plans and the challenge is to get those priorities to match with the purposes outlined in ARPA. A lot of places, particularly smaller townships, smaller villages, and more rural counties are very risk averse and they do not want to be audited by the federal government and then have to give back dollars. So we are seeing the larger cities and more urban counties being maybe more “creative” in the way that they’re justifying the use of funds, and other places, smaller places, tend to play much more closely by the rules.
I think we all have a lot of the shared goals. This is one-time money, an opportunity for a once-in-a-lifetime investment. Given some of the decisions that were made decades ago that created disparity in our community and now being able to use this plan to seed investment in those areas that haven’t always received their fair share of investment was really important to Dayton, just like it’s important to the NAACP, and just like it’s important to Montgomery County.
That is a starting point that led the City of Dayton to have two-thirds of our targeted investment areas are in West Dayton, where we know we can leverage it for 10 to 15 years to come. We’re using our place-based economic development strategy experience to put together these plans that we can come back and build on year after year after year so that we can drive investment into our Black and Brown neighborhoods and amenities and improve quality of life.
Between the One Ohio opioid settlement, which is actually setting up a regional opportunity for collaboration on these issues, and ARPA funds themselves, I think this is the once-in-a-lifetime kind of situation where local government, regional government, county governments, city governments can start to think collaboratively about what projects are needed across boundaries. And I think that that conversation should continue in a variety of ways. Between the ARPA funds and the opioid settlements, these are new dollars coming in for specific purposes that these conversations are able to be had among these communities in ways that they may have been competitive for these dollars in the past, even if they had common goals.
There was a huge amount of money that was lost to fraud during the pandemic and so there’s concerns about fraud from readers now. What’s the oversight mechanism? How are we making sure that this money gets where it needs to go?
Where there’s opportunity, we always will find bad actors. And so we have to be very proactive. The City of Dayton, for that reason, at the start of our process, contracted with a third party independent auditor, informing the application process and forming the training process and forming the contracts that we’re setting in place. And they will be doing robust auditing throughout the implementation phase two, so that we know the money is going to the uses we intended. The City of Dayton is ultimately responsible for every dollar of this of this ARPA funding.
We went through this when we we distributed $92.7 million of CARES funding in seven months. Immediately, we had the auditors come right in and we were fortunate the auditors gave us an unqualified clean opinion on both our internal controls and our financials, so our team did a great job. But there were a lot of lessons learned. We took those lessons, especially around emergency rental assistance, emergency housing assistance, emergency utility assistance, and we beefed up our internal controls as it relates to the ARPA monies, because now we’re doing that all over again, with ARPA only with a bigger pot of money.