Although Orange City leaders have wide discretion in how they may spend new stimulus funds from Washington, city officials have tentatively decided to devote the cash to water and sewer improvements and expansion.
Orange City is set to receive between $5.18 million and $6.18 million from the American Rescue Plan Act, a coronavirus-related recovery bill passed by the Congress and signed by President Joe Biden in March.
“Six million dollars sounds like a lot of money,” City Manager Dale Arrington told the City Council Aug. 10. “I want to give you the information you need.”
The $1.9 trillion measure allocates money to state and local governments, as well as medical institutions, education and some business sectors hit hard by the pandemic, such as tourism and hospitality. Some of the funding may be used to offset the costs of the negative effects of the pandemic between March 3, 2020, and Dec. 31, 2024. Among the approved uses of the funding are providing pay increases to essential workers and improving areas where federal Community Development Block Grant funds may be used.
Arrington said there is one use of the ARPA funding not available to Orange City.
“This is when there is a shortfall in your budget from the prior year. Orange City does not meet the criteria,” she noted.
Indeed, Orange City’s balance sheet is such that the town will begin the new fiscal year with a $10.1 million fund balance, or cash reserve.
In addition, under the terms of the legislation, local governments also may not use the funding to reduce taxes or to pay existing debts or the costs of incurring new debts, such as the expenses of new bond issues. Moreover, cities and counties may not set aside ARPA dollars for an emergency or rainy day fund.
“We have the opportunity to spend the money on water and sewer projects,” she said. “This is just an idea.”
The idea resonated with the City Council.
“The water issues we need to solve,” Council Member Bill Crippen said, summing up the sentiments of his peers. “I support the water and sewer.”
Orange City, according to Arrington, has many unmet needs in its utility infrastructure. The costs of replacing old pipelines and looping areas together amount to $9.5 million. Orange City has contracted for designs to improve water and sewer systems in the northeast portion of the city — including Country Village, Sherwood and the Orange City RV Resort — but the costs of the upgrades now total about $8.3 million.
The actual allocation of the Rescue Plan funding for water infrastructure awaits action by the City Council at a later date.
“This is a one-time opportunity available to us,” Arrington said.