Montague sorts out best use of American Rescue Plan Act funds

MONTAGUE — The Selectboard voted to declare its entire $2.45 million American Rescue Plan Act (ARPA) funding as lost revenue during Monday evening’s meeting in an effort to grant the town maximum spending flexibility.

Under the U.S. Treasury’s “Final Rule,” Montague was eligible to claim up to $10 million — or in Montague’s case, its entire $2.45 million allotment — as standard allowance for revenue loss. The declaration, Town Administrator Steve Ellis said previously, could be of significant benefit to the town due to standard allowance being “generally the most flexible category from a spending perspective.” Montague had to declare ARPA funding as standard allowance by the April 30 reporting deadline if the Selectboard were to decide to do so.

“Essentially here,” Ellis explained, “most communities as I understand it are exercising their option to take the standard allowance to either the maximum extent possible, allowing greater flexibility in their ability to spend funds as situations arise that might require their use.”

Montague will receive its ARPA funding in two installments of $1.23 million, the first having already been received in June 2021 and the next expected in June 2022. This money, Ellis said previously, can be spent to address documented negative economic impacts on small businesses, households, nonprofits and industry sectors; provide premium pay to essential workers; provide replacement revenue to offset pandemic-inflicted reductions; and make improvements to water, sewer, and/or broadband infrastructure. The Selectboard’s previous ARPA funding commitments include a $49,000 long-term combined sewer overflow control plan, a $52,000 collection system study with $250,000 on hold, and $18,450 for 1,000 COVID-19 test kits.

During Monday’s meeting, the Selectboard also confirmed an ARPA funding appropriation for a Vactor sewer truck, which was estimated to cost $540,000 across a five-year lease term, and a Water Pollution Control Facility screw pump replacement, which is now quoted at $745,000. Ellis highlighted that other projects to be funded in the future might include “interesting initiatives that drive street traffic to the community.”

Prior to declaring their funding as lost revenue, the Selectboard discussed the potential concern that they wouldn’t be able to directly provide aid to businesses impacted by the pandemic.

“I think that there is a reason (why declaring everything as lost revenue might be negative),” Clerk Matt Lord said. “I’m not necessarily supportive of it, which is providing direct support to businesses who feel that their revenue has been hurt. The only way we could do that is under the other system.”

While Ellis had previously addressed the concern by suggesting the town withhold a small amount of money to be used for small downtown business development aside from being declared as lost revenue, he also provided assurance that standard allowance spending possibilities would be so flexible that the town could comparably aid local industry in a variety of ways.

“I think we’re going to have a bunch of different manners in which we can provide support for the business economy,” he said.

Reach Julian Mendoza at 413-772-0261, ext. 261 or jmendoza@recorder.com.