Leesman pushes spending $3.5 million for county owned broadband

 

[March 23, 2022] 

At the Logan County Board’s voting meeting Tuesday, March 15, the board voted on several finance related motions. One focus of discussion was moving American Restoration Plan Act (ARPA) funds to lost revenue.

Finance Committee Chairman Steve Jenness brought forward a motion to approve a resolution for moving ARPA funds to lost revenue.

Bellwether representative Bruce Delashmit was available remotely to address questions the board had about moving the ARPA funds to lost revenue.

There have been recent changes in ARPA guidelines. Because of the changes Jenness asked Delashmit to explain between ARPA funds, where they are, and moving them to lost revenue. Jenness asked all ARPA funds could be legally moved to lost revenue.

In the early stages of ARPA funding, Delashmit said the United States Treasury provided a formula for lost revenue. He said the formula was not a very good one. At that time, counties under a quarter million in population had a hard time qualifying for these funds.

When interim reports came out in August, the U.S. Treasury realized most counties were incomplete in determining the lost revenue. Delashmit said some were not able to properly attribute the formula.

Of 3,600 counties nationwide, 70 percent of them are comparable in size to Logan County. Delashmit said by October, a large number of counties were still not able to complete the calculations.

More recently, Delashmit said the Treasury suspended lost revenue definitions, but around 70 percent of counties still did not qualify. The purpose lost revenue is to fund essential government services.

As of January 2022, Delashmit said lost revenue was redefined. Now counties can use a standard allocation formula for the funds instead of itemizing everything. He said that is comparable to a standard deduction on taxes.
 

In a nutshell, Delashmit said Logan County can move from itemizing the lost revenue to taking a standard formula provided by the U.S. Treasury.

A $10 million ceiling for ARPA funding is based on the high end of 70 percent of counties in the nation. Delashmit said counties whose population is under 250,000 receiving less than $10 M in ARPA funds could move all these funds into lost revenue.

For Logan County, Delashmit said it means these funds can be used for any government service program or project. These include services related to public health, education, infrastructure, roads, vehicles and labor.

In short, Delashmit said these changes mean ARPA funds can be used for anything that is legal for a county to use the funds for. These can include grants for small business programs and non-profit programs.

The final benefit is that reduced reporting significantly reduces the risk of recoupment. Items Delashmit previously said were not eligible to use ARPA funds on are now eligible if they are still on the county’s wish list under the standard allowance.

Jenness asked about putting part of the ARPA funds in lost revenue. He wanted to know if 20 percent of the funds could be put into lost revenue now and then six months from now, another 20 percent could be put in lost revenue.

For lost revenue, Delashmit said it is a one time all or nothing decision. In other words, the funding either all goes into lost revenue or none of it does. By April, Bellwether would like to know the standard deductions. There will still be reporting of standard allowances.

In the resolution, board member Keenan Leesman asked about inserting a paragraph into the motion. Leesman wanted the paragraph to state that $3.5 M of ARPA funds after moving to lost revenue be allocated to broadband development. This would be pending eligibility of Bellwether and approval of the Logan County Board.
 

What Leesman does not want to lose sight of is what the ARPA funds are intended for. Of the projects the county has listened to or reviewed Leesman feels broadband seems most aligned with a potential for economic development.

State and federal grants can also be used for broadband. One concern board member Annette Welch was whether putting that much of the ARPA funds towards broadband would tie up too many funds.

To have a matching grant, Leesman said the state grant programs prefers a county has about 50 percent of the funding needed for a broadband project.

The grant is based on a point system between 1 and 150. Only those who score 101 or higher are considered. Many criteria help get points, and Leesman said one of those having underserved or unserved populations.

A big chunk of the criteria is based on a county’s commitment to the project with initial funding. Without this commitment, Leesman said counties would not be likely to get state funds or be prioritized.

Because board member Bob Sanders did not want to lock the county into something, he feels there needs to be some prioritization of infrastructure like the safety complex.

There is a difference between want and need. Sanders said we want broadband, but probably need to look at the safety complex. He would like more information before committing money for broad band and locking the county in.

Board member David Hepler addressed also addressed how one person’s want is another person’s need. He said when the county had a study done years ago, it ranked eleven out of eleven as far as higher education attainment. Hepler said anything that will help our population become more competitive is more than just a want. Broadband can help with education and economic development and benefit many in the county.
 

Though Welch is in favor of taking the standard deduction as lost revenue, she asked about putting less than $3.5 M aside for broadband. Welch wanted to know if a smaller amount could still help get a state grant.

This week, Leesman is meeting with representatives of Telecommunications service provider WanRack to find out pricing.

WanRack previously told Leesman $3.5 M plus the matching state grant would meet the criteria for the project. The matching grants would get the county the rest of what is needed [to do a countywide broadband project]. If less was set aside, Leesman said the project would need to be done in phases. Certain areas would not get connectivity.

Because there is a “laundry list” of items, board member Jim Wessbecher feels $3.5 M is too much to allocate for broadband.

Though the lost revenue needs to be allocated by April, Jenness asked if the $3.5 M earmarked for broadband could be adjusted later.

Until there is a contract or invoice, Delashmit said the funds are not obligated. The board could amend the amount set aside for broadband later.

Though board member Dale Nelson said he supports moving ARPA funds to lost revenue. Nelson also believes in broadband and knows the jail needs repaired but would like the county to prioritize a list of requests based on needs and wants.

Board Vice Chairman Scott Schaffenacker said making a list would be helpful. He feels broadband is good but would like to add jail repair to the amendment. Schaffenacker said it would help show why the funds need to be converted to lost revenue.

Broadband is something board member David Blankenship said would bring in revenue for the county. He would like to explore the idea of all future permit fees being dedicated to jail improvements. Blankenship feels both projects are important.

At this point, Leesman wants some assurance this project will not be thrown to the curb. He said amounts could be changed later.

Before voting to allocate $3.5 M to broadband, Sanders said he would like more information.

Once Leesman meets with WanRack, he will know the costs. He plans to present that information to the board’s Planning and Zoning and Finance Committees in April. Leesman said the grant application will ask for every minute detail of the broadband project.

As for the priority list, a subcommittee made up of Davenport, Leesman and Jenness met recently and reviewed requests. Davenport thinks there is enough in the contingency fund to address everyone else’s requests. The ARPA funds can then be split up between broadband and the jail.

To make everything cleaner, Welch amended the motion to add a separate line to the resolution about safety complex upgrades pending approval of the full board.

Welch’s amendment to add safety complex upgrades to the resolution passed unanimously.

Leesman’s amendment to allocate $3.5 M of ARPA funds to broadband passed 11-1 with Sanders voting no.

The main motion as amended to approve a resolution for moving ARPA funds to lost revenue passed unanimously.
 

Another focus of discussion was a motion by Nelson regarding premium pay. The intent of his motion was to bring a previous motion for premium pay off the table. Due to questions about income thresholds and eligibility for premium pay, the motion for premium pay was tabled at the February board meeting.

Nelson motioned to bring premium pay off the table and approve premium pay at $1,500 for each full time employee and $750 for each part time employee as a onetime payment based upon income thresholds set by statute.

Since the motion was tabled last month, Nelson felt they needed to decide on the premium pay this month.

Board members had questions about the total amount needed for premium pay and who is eligible.

With moving ARPA funds to lost revenue and the new set of rules, Leesman feels a new process is needed to decide on premium pay.

Because of the questions, Leesman moved to send the premium pay back to the Finance Committee for further review and discussion. Jenness said it is still listed on old business for that committee.

To make it cleaner, Leesman said the Finance Committee should probably bring forward a new premium pay motion after their discussion.

The board also approved the following action items brought forward from the Finance Committee:

- A resolution for Bank Depository Designation. The board must approve this designation each year for depositing county funds in a local bank.

- A payment of JANO invoices in the amount of $26,924.53 out of the contingency fund line item.

- An annual contribution of $2,500 to Greater Peoria Economic Development Council. The board has asked for a report from the CEO of GPEDC about what they have done for the county.
 

If the report shows that what GPEDC has done exceeds the county’s expectations, Jenness said the board could decide to give at least $5,000.

- The purchase of TEK84 x-ray body scanning machine for use at the Logan County Safety Complex. Jenness said the amount is not to exceed $180,000.

Jenness amended it to come from the ARPA funds designated for the safety complex in the resolution for lost revenue.

One question Hepler had was who would service the machine.

Logan County Sheriff Mark Landers said the service technician is from Minnesota.

Though Blankenship said he supported getting the scanner, he asked whether it needed to be bid out. He did not want the county to be in a situation where they found out later they need to go out for public bids.

When looking at various body scanning machines, Sheriff Landers said the TEK84 has the best technology. This company is the closest and has sold over 500 units in the Midwest since 2019. The amount for the scanner will include $7,500 a year for maintenance for the next six years.

Leesman asked the expected life span for the equipment. After the warranty expires, Leesman wanted to know if the scanner would need to be upgraded or replaced. He is concerned about replacement costs down the road and factoring that into the budget.

Though Landers has no projections, he said the x-ray machine in the courthouse lasted 25 years. He said it is good to plan for replacement costs in about 10 years.

[Angela Reiners]