The $64.7 million question

NEW BEDFORD — In late May, the city received a deposit of just over $32 million into a restricted bank account titled “City of New Bedford ARPA Funds.” 

The deposit was the first tranche of $64.7 million the city is set to receive from the federal government’s American Rescue Plan Act, or ARPA. Now, with the budget for the next fiscal year certified, the city is trying to figure out how best to spend it. 

The mayor’s office said it’s too early to comment directly on how the funds will be used. City councilors and community groups say, at this point, they have more questions than answers, with some urging the mayor’s office to establish a task force to help determine the spending. 

The city is planning to use the funds to cover a significant shortfall in municipal revenue due to the pandemic, according to city officials and those involved in internal discussions. Tentatively on the agenda are urgent upgrades to the water and sewer infrastructure and a long list of capital projects aiming to drive tourism, such as rehabilitating the Zeiterion Performing Arts Center downtown or the Capitol Theatre in the North End.

“I would say it’s exciting. The intention (of ARPA) is to help our local economies get back on track,” said city auditor Robert Ekstrom in a recent interview. “A lot of people have a lot of ideas. The biggest thing to do is figure out how to bring them all to the table.” 

The funds are the local extension of President Biden’s $1.9 trillion economic stimulus bill signed in March. 

City officials say this is the largest direct infusion of federal funds to the city in recent history. And it’s bolstered by an additional $73 million in federal aid going directly to the School Department through a similar ARPA program. Together, the windfall makes up over $137 million in one-time federal aid coming to New Bedford — or about one-third of the annual city budget. 

So far, the only certainty is that the city will use about $5 million of the funds to cover lost municipal revenues due to the pandemic, according to Ekstrom. 

But that still leaves about $60 million on the table for the city. And the questions beginning to stir in City Hall are: How will that money be spent? And who gets to make those decisions?

Mayor Jon Mitchell currently has sole discretion on how the city’s portion of the funds will be spent, according to city officials. There have been internal discussions between the mayor’s office, senior staff and a small working group, which includes members of the New Bedford Economic Development Council, on how the funds might be spent. 

“We’re not the only participant,” said Derek Santos, executive director of the NBEDC, of the group strategizing how best to spend the funds. “It looks to me like there is going to be a great deal of engagement with the community and City Council.” 

But that engagement has yet to come. 

Some city councilors and community groups say they feel like they have been left in the dark through the early phase of determining how the funds will be spent. Two city councilors said, if there have been discussions, they haven’t been involved. They say the council should have some oversight, such as discretion on approving or rejecting the allocation of funds, similar to their role with the city budget. 

The mayor’s office declined to comment, reasoning it’s too early, and that they are awaiting final guidelines to be released from the U.S. Department of the Treasury.

But in May, the Treasury Department released preliminary guidelines on how municipalities may use the funds. Two months later, many cities have already begun publicly planning the distribution of those funds. The city of Fall River, for example, has already established a task force to solicit feedback from the community. 

“New Bedford has a big chance here. … There are a lot of solid projects in the pipeline.”

Derek Santos, executive director of the city’s Economic Development Council

Despite conflict over who controls the purse strings, visions of how the funds should be spent are strikingly similar among city councilors, community groups and the tentative plans coming out of the mayor’s office. 

“(The funds) should be committed only to one-time expenses,” Mitchell wrote in his budget proposal, which was presented to the City Council in May. “We will receive this federal aid only once, and it would be wholly irresponsible to use the funds for obligations that would exist after the aid is exhausted.” 

City councilors and community groups say they agree that the funds should be directed toward one-time projects like deferred infrastructure maintenance.

The city has been strained by expensive and urgent upgrades needed to the water and sewer infrastructure. Those upgrades were deferred, due to a lack of funds during the pandemic. The city is facing potential fines of up to $464,000 a day if it does not soon come into compliance with federal regulations. The ARPA funds would ease the burden of those repairs and open other portions of the city budget in the future. 

The idea of funding capital projects, like the Zeiterion Theater or the Capitol Theater, has also been met with enthusiasm. 

“It’s a transformative project,” said Corinn Williams, executive director of the Community Economic Development Center, of the potential for renovating the Capitol Theatre building with ARPA funds. “It will bring more retail space, affordable housing and opportunities for the neighborhood. It’s the kind of investment that could see a return over time.” 

Santos, of the NBEDC, said the city is discussing between 15 and 20 major projects — many of which are part of the city’s Capital Improvement Program — where the ARPA funds could be tapped. Funding these projects, he said, would rebuild the economic growth that was lost during the pandemic, driving tourism and bringing more investment into the city in the years to come. 

“New Bedford has a big chance here,” Santos said. “This is one-time money. But New Bedford is ready to deploy these resources. There are a lot of solid projects in the pipeline.”

He added: “Overall, you’re going to see the potential for quite a renaissance.” 

The city has until the end of 2024 to spend the funds. Once the Treasury Department releases its final guidelines, the date of which is unclear but expected to be soon, the mayor’s office said it will be more willing to open discussions to the public. 

The tensions mirror what is happening on the state level. The state Legislature has been battling Gov. Charlie Baker to control the purse strings of the remaining ARPA funds. Last week, Baker signed a bill transferring control of ARPA funds to the Legislature.

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