Oklahoma Cities Prepare for American Rescue Plan Funding

Author: Sidney Lee - eCapitol
Date: 07/01/2021

(eCap) Most Oklahoma cities are waiting to receive their American Rescue Plan funds while also lobbying the federal government to reconsider rules related to city utility fees.

Right now, Oklahoma municipalities will be eligible for more than $500 million in federal COVID-19 aid dollars.

Oklahoma Municipal League Executive Director Mike Fina said the organization, as well as similar municipal organizations in all 50 states and the National League of Cities, are lobbying at the federal government for further guidance on the ARP program, especially a current rule related to each city's allocation.

The United States Treasury has stated that each municipality cannot receive more than 75 percent of their pre-COVID budget, with any funds from utilizes not included in that calculation.

Fina said the rule was likely written with larger cities, especially those on the East Coast in mind, because of the legal relationships between these large cities and their utility providers.

But in Oklahoma, the legal relationship between cities and their public works authorities are very different. Other states have some similar relationships between their smaller municipalities and utility services, but no other state only allows municipalities to rely on sales tax dollars outside of those utility funds.

"We're hamstrung on just having sales tax," Fina said.

OML and their partner organizations have asked daily for updates from the US Treasury, and he does believe there will be a ruling or clarification in their favor, but Fina and Oklahoma cities are stuck waiting for the federal government's reply.

Oklahoma's federal delegation has so far not bee involved in making requests for a change or further interpretation of these rules.

Oklahoma cities aren't just waiting for a Treasury ruling to receive their funding.

They are also waiting for the Oklahoma Legislature. [Editor's Note; See related story, McCall, Treat create bipartisan joint committee to prioritize projects for federal funds, June 16]

Oklahoma cities, with the exception of eight Entitlement cities, will not receive their funds until the state government has requested its own share of the ARP federal funds. That does not mean state legislatures have any control over how cities or counties spend their ARP dollars, which is something OML, NLC and other municipal leagues worked to ensure in the federal legislation.

"No disrespect to state legislatures, but they don't know what the priorities for municipalities are, so that's why we fought so hard to have this bill the way it is," Fina said.

From the federal government, there are controls on how the ARP funds can be used. Each municipality has a portion of funds that can be used for public safety funding and a portion that can be used for specific kinds of infrastructure projects, including water, wastewater and broadband.

Fina said the timeline to use the ARP funds gives cities more than enough time to plan, engineer, bid and work projects.

"They really need to make long-term investments in their communities with these dollars, and be very thoughtful with them," Fina said.