The Town of Herndon has taken its initial steps toward utilizing federal funding earmarked to help alleviate the impact of the COVID-19 pandemic.
The Herndon Town Council approved the allocation of the town’s funds from the American Rescue Plan Act of 2021 (ARPA) during a public session on Tuesday (Aug. 10). However, the budgeting of the funds will take place in the future as the town reviews capital projects and other operations and maintenance needs.
“This is the initial [move] just to kind of get the town started,” Herndon Director of Finance Robert Tang said. “We can do future budget amendments and re-appropriations as needed.”
Passed by Congress and signed by President Joe Biden in March, ARPA allocated $350 billion to assist state, local, territorial and tribal governments affected by the pandemic, establishing the Coronavirus State and Local Fiscal Recovery Fund.
Virginia’s windfall included over $633 million to provide a “substantial infusion to local governments” that are in turn meant to help turn the tide on the pandemic, address economic fallout, and lay a foundation for a strong and equitable recovery, according to Tang.
Herndon received a first installment of $12.7 million, and a second installment of roughly the same amount is expected in summer 2022, giving the town a total of $25.5 million in relief funding.
The funds can be used to address public health expenditures, negative economic impacts caused by the public health emergency, lost public sector revenue, premium pay for essential workers, and water, sewer, and broadband infrastructure investments.
Tang detailed plans for the funding to support operations, maintenance, and capital projects from fiscal years 2020 and 2021 in order to recover and prepare for another potential economic downturn.
The focus points include addressing the pandemic’s negative economic impacts, supporting safe operations and working conditions for staff, replacing lost public sector revenue, and funding water and sewer projects.
However, Tang told the town council that there are a variety of challenges to meet, including vague and shifting guidance from the US Treasury and the need to follow proper procurement, documentation, reporting, and monitoring requirements.
The ARPA funds are subject to audits to ensure they are utilized for their intended purpose. Funds that are deemed to be improperly utilized would have to be paid back.
Mayor Sheila Olem said that once a spending plan is created for the town, the council will have further public hearings before approving the final allocation of these funds.
The ARPA funds must be allocated by Dec. 31, 2024, and expended by Dec. 31, 2026.
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