Lehigh Valley cities plan how to spend funds

Stimulus package allotted the three areas a combined $112 million in pandemic relief

The Lehigh Valley’s three cities are deciding how to spend a combined $112 million in American Rescue Plan money, but they must juggle fiscal priorities with financial relief for their most vulnerable residents.

It’s a New Deal-like stimulus package that attempts to reignite the U.S. economy after the major slowdown wrought by the pandemic.

Among its provisions is $65.1 billion for cities and municipalities across the United States. Cities can use their dollars to respond to the COVID-19 pandemic, replace lost revenue, stabilize the economy for businesses and households, and address public health and economic hardships that arose from the pandemic.

Cities receive that money in tranches — the first half came this past May and the next half arrives in May 2022. They have until 2024 to decide where that money will go and until 2026 to spend it — if they don’t, they have to send the money back to the federal government. Of the three Lehigh Valley cities, only Allentown has approved part of an American Rescue Plan budget — $28 million for several capital projects.

While city leaders are eager to replace lost revenue and catch up on capital projects that have long been on hold, they’re facing demands from residents to prioritize those living in poverty who have been hit hard by the pandemic. Cities also face rising costs of implementing projects and programs because of economic inflation, and must make sure programs they roll out through ARPA don’t overlap with those that already exist at the county and state level.

Allentown wants to put more than half of its ARPA dollars — $36 million out of almost $58 million — toward infrastructure projects like storm sewer improvements ($5 million), water main replacement ($6.3 million) and sewer linings ($2 million).

City Council unanimously approved $28 million in infrastructure and capital projects in an early November meeting. Members were swayed to vote in favor of capital spending earlier because of the rising costs of steel and other materials needed for projects.

The city is deciding how to spend money for community reinvestment efforts. It faces pressure from local activists and nonprofit leaders to address poverty, homeless and gun violence in the city.

Allentown activists and nonprofit leaders were upset with the city’s original ARPA budget, which proposed giving $2 million to the Da Vinci Science Center, $1 million to the IronPigs and creating a $2.5 million fund to which all local nonprofits could apply for portions.

Activists said the city’s proposal singles out some businesses and nonprofits while leaving the rest to “fight over the scraps.”

“There is very little support here for work being done on the ground to build community,” Kim Schafer, executive director of Allentown nonprofit Community Bike Works, said at a September public input meeting on ARPA.

The city amended its first proposal in response to the community’s feedback. It put more money toward nonprofit relief, scrapped the sums for the IronPigs and Da Vinci Center, and added $250,000 for a disparity study and over $1 million for a violence prevention program.

The most recent proposal also puts $4.7 million toward housing projects and $6 million for a broadband project that aims to bring high-speed, affordable internet all throughout Allentown.

But some council members think even more needs to go toward pressing needs such as poverty and homelessness. Progressive City Council members Ce-Ce Gerlach and Joshua Siegel crafted their own proposed ARPA budget, featuring investments such as a $10 million affordable housing trust fund, $2 million toward an anti-violence initiative and $2 million for a youth service corps.

Incoming Allentown Mayor Matt Tuerk said he’d like to see the amount of money for affordable housing “beefed up.” His priorities for ARPA, he said, will be to help Allentown residents recover from the pandemic. Tuerk will be able to propose changes to the ARPA budget that remains unspent when he takes office early next year.

It’s unclear when the city will pass a finalized ARPA budget. Council President Julio Guridy said he hopes to host more public input meetings on ARPA before its final passing, but so far none has been scheduled.

Bethlehem

Bethlehem officials want to use some of the American Rescue Plan money to offset the city’s budget deficit. But they are also working to balance the city’s fiscal priorities with the needs of residents in poverty.

The city is facing a $2.4 million deficit that threatens to rise to more than $10 million by 2026. Even with the influx of ARPA money, the city might need to hike taxes in the coming years unless officials can find another way to close the gap.

In September, Bethlehem Business Administrator Eric Evans gave a virtual presentation on the city administration’s plans to spend $34 in relief money. The city proposed putting $8 million toward personnel costs, $12 million toward capital projects and revenue recovery, $6 million in much-needed road repairs and an $8 million community reinvestment fund for nonprofits, housing and small businesses.

In his 2022 budget proposal this month, Bethlehem Mayor Robert Donchez proposed a scaled-down version of the broader proposal tacked onto the yearly budget. It put $2 million in ARPA dollars toward personnel costs, $3 million toward roads and $6 million toward capital projects that would otherwise be financed via a loan, plunging the city into further debt.

It also includes a $1.5 million for the “community reinvestment fund.” Donchez said he still hopes to see over $8 million in relief money to go toward the fund, and hopes Mayor-elect J. William Reynolds will oversee the rollout of the rest of those dollars.

As in Allentown, some Bethlehem City Council members want to see more money helping those in the community, in particular, for housing and homelessness. Some council members in particular singled out a $2 million investment that the city administration is proposing for maintenance projects as a “lopsided priority,” according to Council member Grace Van Wirt.

Council member Grace Crampsie Smith, drawing upon her own experiences, called on council to prioritize financially struggling residents, while also acknowledging the difficult task of balancing fiscal priorities.

“If this was my household budget, repaving the tennis court versus giving someone shelter is a no-brainer,” Crampsie Smith said.

But unlike in Allentown, Bethlehem residents haven’t been giving much feedback. When City Council member-elect Kiera Wilhelm asked if the city has considered soliciting input from the public, Council President Adam Waldron said that the city has struggled to get residents involved. He encouraged Bethlehem residents to attend meetings and email their thoughts on how the money should be spent.

Reynolds said his priority as mayor is making sure the money “helps those that were most affected in the short term, as well as using the dollars in the most effective way possible over the long term for our city.” He said he agrees with some of the priorities that Donchez laid out in his budget proposal, such as the community reinvestment fund, but also referred to the budget as a “working document” and said it would remain open to changes throughout 2023.

In particular, he said he’d like to see more money go toward affordable housing and neighborhood investment.

Easton

Out of the three Lehigh Valley cities, Easton has so far solicited the most public input. The city has held two meetings soliciting public input and plans to hold one more. It has also circulated an online survey asking for residents’ thoughts.

That input is evident in the city’s initial ARPA proposal, which Mayor Sal Panto Jr. first outlined Sept. 22. Panto said the public said it would most like to see investments in programs for affordable housing and for mental health, especially youth mental health.

“We want make sure that we assist people with affordable housing, which is becoming a problem in the Lehigh Valley,” Panto said. “And improve mental health — kids have been so impacted by closure of schools, wearing masks, things like that.”

Easton’s proposal puts $6.6 million toward “public health” programs like community gardens, youth mental health programs and affordable housing. It also creates a $1.5 million pool for small-business assistance grants, mortgage assistance grants and rental assistance. There’s also nearly $9 million to replace lost revenue and rehire staff, $2 million for water, storm and sewer projects, and just over $1 million for tourism development projects.

Panto said he wants to see ARPA money “out on the streets” in the first quarter of next year, but the city awaits final guidelines from the U.S. Department of Treasury on how cities are allowed to spend it. Treasury released interim spending guidelines for cities this summer, but has not yet released finalized guidance, Panto said.

Elsewhere

Allentown, Easton and Bethlehem aren’t the only cities taking their time deciding how to spend ARPA dollars. According to an Associated Press analysis, a majority of large cities and states have yet to spend a dime of their American Rescue Plan money. Large cities with populations over 250,000 have spent just 8.5% of their total allotted dollars — only large cities are required to report their spending, so it’s harder to compare cities the same size as Allentown, Bethlehem and Easton.

While the majority of large cities have put money towards replenishing diminished revenue and funding state services, some cities have proposed wide-reaching programs working toward equity and inclusion. St Louis is putting $72 million of its ARPA money towards homeless services, eviction prevention and youth programs. In Buffalo, New York, the city describes its spending plan as a “targeted anti-poverty program” that puts million dollar sums toward a minority-assistance business assistance program, food security initiatives and youth programming.

On the other hand, some cities have done nothing at all to engage their populations on how to spend the ARPA money. San Francisco, for example, used its entire initial allotment of $312 million to address the city’s revenue shortfalls.