ARPA Funds - What are they and why are they so important to the FY2026 Budget Development?

What is ARPA?

The American Rescue Plan Act of 2021 (“ARPA”) is a federal aid program established in response to the COVID-19 pandemic. These funds are available for use for a wide range of municipal expenses, but do have restrictions – 

Examples of Allowed Uses: 

· Provide premium pay to essential workers

· Invest in infrastructure related to broadband, water & sewer

· Programs or services related to negative health & economic impacts of COVID-19 pandemic

· Revenue loss due to COVID-19 pandemic

Examples of Prohibited Uses:

 · Pay for debt service

· Deposit into any pension fund

· Add to stabilization funds

· Use as match for federal grants

If you want more information on the details of ARPA funds, including allowed and prohibited uses, check out this presentation by the Massachusetts Municipal Association.

The Town of Townsend received a total of $2,834,314 of ARPA funds.

The Townsend Board of Selectmen wrote three policies relative to ARPA funds. The policies are linked below. 

There is a policy that outlines the allocation of ARPA funds. Pursuant to the Board of Selectmen’s “ARPA Funds Allocation-Reallocation Policy”, all that is required for an allocation of these funds is a majority vote by the Board of Selectmen. Voters do not have a say in where this money is spent, and our budgeting process does not reflect where this money has gone. 

The policies are here:

ARPA Funds Allocation – Reallocation Policy 

ARPA Funds Expenditure Policy

ARPA Sub-Recipient Funding Policy

Why are ARPA Funds important to the FY2026 Budgeting Process?

ARPA Funds have funded several projects. There are concerns related to the available balances based on Public Records Requests: 

· ARPA Funds were used to create a Human Resources Director position for the Town of Townsend. Over $330,000 was allocated for this purpose. 

· Townsend has a limited number of 40 employees (the school district employees are separate from the town employees). 

· Townsend did not have a Human Resources Director prior to the receipt of this federal aid.

· With the budget situation, a conversation with the community is warranted to determine the use of the remaining funds. 

· There are alternatives, NMRSD has offered to assist the town in the functions of this role. Surrounding communities of similar size do not have Human Resource Directors, there could be an opportunity to regionalize. Former boards discussed contracting as needed. Larger communities with hundreds of employees have one person covering school and municipal HR functions. 

· NOTE:  Only a portion of the salary appears on the budget spreadsheets (since the ARPA portion is not included), This is a high paid position that was added, without any public input. 

· Information from two Public Records Requests for ARPA Funds balances, is inconsistent. It is difficult to confirm balances when documentation does not match, however, the position could be vacated, and remaining personnel funds could be allocated to the budget decreasing the override. 

· Depending on which document is reviewed, there is $98,797 remaining in unexpended ARPA Funds, total across all projects, heading into FY2026. 

· The Board of Selectmen has allocated (this and more it appears from operating) toward the Human Resources Director and Wellness Coordinator (another position added with ARPA funding that is currently vacant). We would be able to allocate this money to other line items within our FY2026 Budget, reducing the gap (aka override) by approximately $100,000. This would be the best use of these funds available for the budget.

· On December 12, 2024, the Board of Selectmen voted to take funds from the prior ARPA Project allocations, totaling $287,632, and use them to cover a budget deficit for FY2024 caused by “a missed expense” (approximately $87,000), a shortage on the anticipated PAYT trash receipts (approximately $190,000), and three APRA projects that went overbudget – Stormwater Management, Vinton Pond Comcast Buildout, and Broadband & WiFi ($31,600 combined). The funds were taken from many ARPA Fund Projects, including but not limited to Meals for Seniors, Building Evaluation, Conservation Agent, Police Department Wages, and Election Expenses. This reallocation resulted in zeroing out many of these ARPA Projects. 

o The Greenville Road Bridge Improvements project appears that it will be overbudget.  

o The Selectboard voted to eliminate Meals for Seniors ARPA funding for FY2026 and FY2027, and instead allocated the entire remaining balance to the staff positions mentioned above. 

The ARPA Policies put in place by the Selectboard, allowed them to have complete and total control over how to expend this aid,  without public input. The lack of clear and consistent information being provided to voters raises concerns that need to be addressed prior to approving our FY2026 Budget – and especially prior to adding an override vote to our ballot.

You can find the ARPA Fund information provided under the Public Records Request here.