The towns of Oro Valley and Marana are set to receive more than $10 million each in American Rescue Plan Act funding to help mitigate ongoing financial difficulties caused by the pandemic after the act was signed into law in March.
Both towns are expected to receive their share of the federal government’s $1.9 trillion COVID-19 relief package in two payments, split 12 months apart. The Town of Marana is expected to receive $11.7 million and Oro Valley is set to receive $10.9 million.
Oro Valley’s Chief Financial Officer David Gephart said they are going to wait for guidance from the U.S. Department of the Treasury before they allocate their AFRA funding, but suggested they have plenty of projects to exhaust the $10.9 million by the December 2024 deadline.
“We have a capital improvement plan that outlines major capital investments over the next 10 years that the town needs to invest in,” Gephart said. “So, we’re looking at accelerating some of the projects on that plan that would provide future budget relief.”
Gephart also said spending the ARPA funding on town projects will free up money to use toward Oro Valley’s growing Arizona Public Safety Personnel Retirement System (PSPRS) liability, which has not been properly funded for over a decade and other town projects like utilizing solar power.
“Hopefully, we’ll be able to use these ARPA funds for these capital projects that we’re planning on utilizing town reserve money for and so that frees up that reserve money for us to make a significant payment toward the PSPRS unfunded liability,” Gephart said. “It [ARPA funding] provides budget flexibility for us to be able to take a look at that and make that investment.”
Marana’s deputy town manager Eric Montague said ARPA funds can be used to help states and municipalities cover COVID-19 related expenditures, providing essential assistance to individuals and businesses affected by the pandemic, replenish lost revenue and updating local water, sewer and broadband infrastructure.
However, ARPA funds cannot be utilized to offset or defer the impact of a tax reduction and it can not be placed in a pension fund.
“The Treasury is going to come out with formal guidance that has yet to be issued. So, some information that you see may change, but most should be relatively clear,” Montague said. “Until we receive final Treasury guidance, all our plans are up in the air. Our plans at this point are really to look at utilizing that money for facility maintenance and improvements that the town has.”
Marana Mayor Ed Honea said he would like to see the funds used toward the Northwest Recharge, Recovery, and Delivery System (NWRRDS), a collaborative infrastructure effort between the town, Oro Valley and Metro Water to jointly recover stored CAP water in Avra Valley.
“We already have a commitment with Oro Valley and Metro Water to do this project and our cost continues to go up, but it’s $12 million plus,” Honea said. “This [ARPA funding] would take care of that project. Instead of trying to do it piecemeal and do a little bit here and there.”
Honea also pointed out NWRRDS could recover roughly 50% of the money spent on the project from impact fees.
Marana Town Manager Terry Rozema said no plans for the funding have been set in stone, however the town will need to spend those federal dollars by December 2024 once received. He said he sees the time limit to use the funding limits the town’s ability to properly plan unless the project was shovel-ready.
“We have to have projects that are ready to go that can be completed or near completion by that time and we don’t have a lot of those projects,” Rozema said. “I suspect we’ll probably hone in on where we want to spend the money and what we want to put it towards.”