NCLM.ORG 27 The American Rescue Plan and Local Infrastructure REPORT FINDINGS A Generational Opportunity •The American Rescue Plan will bring $1.3 billion to N.C. cities and towns, and it includes a broad mandate to allow investments in water and sewer infrastructure. •Local governments repeatedly demonstrate the ability to lead transformational change—case studies in Bethel, Hendersonville, and many other towns show that when properly funded and supported, local government-led infrastructure projects yield lasting results. A Clear Need •Significant investment in water and wastewater infrastructure is needed—close to $30 billion, according to estimates. INTRODUCTION North Carolina cities and towns will receive $1.3 billion in federal American Rescue Plan (ARP) funds in 2021 and 2022. That is a staggering number, and it encompasses just a small piece of the ARP. More funds will be sent to North Carolina counties. Still more is going to the state itself. Never before has money flowed directly to our cities and towns like it will through the ARP, and as such, it is a generational opportunity—to both recover from the pandemic and to prosper well into the future. These dollars come with limitations and will require strict accounting for their uses. Although continued U.S. Department of Treasury guidance is still expected related to eligible spending, the federal bill includes a broad mandate to allow investments in water, sewer, and broadband infrastructure. (It should be noted that, despite the federal law and its guidelines, North Carolina law continues to place substantial restraints on local government broadband spending.) “A few years from now, people will look back on the American Rescue Plan and the ways that it did or did not transform communities. They will look at whether the purposes on which it was spent created a legacy of a better North Carolina, or whether opportunities were squandered.” » Karen Alexander, NCLM President and Salisbury Mayor •The responsibility falls almost solely to local governments, who get just 8% of their water and sewer needs met by outside funding yet provide service to 89% of the state’s population. •Many of those same local governments are dealing with population loss in recent decades, reducing revenue and lessening their capacity to meet those infrastructure needs. Planning for the Future •The League encourages its members to consider investments into water and wastewater infrastructure. •Additionally, the League encourages municipalities to seek partnerships and regional collaboration when planning American Rescue Plan spending. •Not only do funding projects go further when partnered, but also investments in infrastructure represents the most likely paths to a lasting funding legacy. There are numerous examples of federally-supported infrastructure projects yielding transformational changes to our municipalities. The highlighted projects within include those that are now underway, funded through sources other than the ARP and those planned with ARP funds. In each case, substantial outside funding—similar to amounts being awarded local governments across North Carolina under the federal American Rescue Plan—made these projects possible. There is a well-documented and clear need for water infrastructure investment in North Carolina. This issue represents the most significant threat to the sustainability of many towns, and existing state and federal funding streams are insufficient given the scale of the problem. With the addition of ARP funding, however, those funding totals more adequately address the issue. Investments in projects that have long-term impacts on residents’ quality of life, create economic opportunity, and help solve these infrastructure challenges are now possible. continues on page 29
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