Iowa small cities eager to get federal relief funds for infrastructure work

Like teams playing basketball with a shot clock, Iowa small cities are making their game plans — before the timer starts — to take advantage of nearly $222 million in federal coronavirus pandemic relief funds.

The funds are part of $19.5 billion for local governments included in the Biden administration’s American Rescue Plan for cities of less than 50,000 people. In Iowa, that’s all but 11 of the states 900-plus cities.

In Hiawatha, City Manager Kim Downs said she will feel “very blessed” to receive recovery funds.

However, while the city’s anticipated $1.3 million may move up the water, sewer and fiber-optic projects, “it doesn't mean that we're going to be able to do five years’ worth of projects.”

The rescue plan funds will jump-start infrastructure projects and help Iowa cities recover revenue losses attributable to COVID-19 as well as address “community recovery,” Robert Palmer of the Iowa League of Cities said Wednesday.

“Cities can look at areas of the community where there was a disproportionate impact” and apply the rescue fund money there, he said.

That could include housing and food assistance as well as direct cash assistance to the hardest hit residents, according to Iowa Citizens for Community Improvement, which said the state is dragging its feet on getting the rescue plan funds to cities.

“We’ve heard nothing from the state on how to set up to make sure the money gets into the hands of the cities that need it,” said Ross Grooters, a member of the Pleasant Hill City Council and the Iowa Citizens group. “There’s a short window once the state gets the money to make sure it gets into hands of cities that need it.”

Many small cities don’t have the staff and resources of their larger neighbors to deal with the paperwork, Grooters added. “It will be really difficult for some of them to apply.”

That was the case when some cities did not take advantage of the CARES Act funds, Palmer said.

‘Clock is ticking’

Gov. Kim Reynolds and her Department of Management Director Michael Bousselot “are missing in action while the clock is ticking,” added Jane Noble Davis, an Iowa City Catholic Worker and Iowa Citizens member from Washington, Iowa.

Bousselot pushed back Thursday, saying that his office is being “very intentional” in how it approaches the draw down of the federal funds. It wants to give small communities, especially those with limited resources, every opportunity to prepare before the application period begins.

Some communities may decide the strings attached to the funding may exceed their management capacity, Bousselot said. In those cases, the state wants the cities to make an affirmative decision not to participate so the funds can be redirected by the state into those communities. If not, the money will be doled out on a per person basis across the state.

From Palmer’s perspective, the clock isn’t ticking, which the League of Cities believes is a good thing.

League staffers have been meeting weekly with state officials for several weeks and are in frequent communications with city officials on how to prepare for the application process.

Grooters is right that many smaller cities don’t have the staff and resources of the larger cities, Palmer said, so the League has been communicating through emails, legislative updates and conference calls — one with more than 750 participants — to keep cities abreast of the process.

‘Shot clock’ starts

Once the state starts the process, “that starts a shot clock” for cities to submit documents.

There will be a 30-day window, with the option for state to seek a 30-day extension.

The state hasn’t pulled the trigger “out of concern about starting that shot clock too early,” Palmer said.

He believes Reynolds’ office, which did not immediately respond to questions about the rescue plan, is waiting until after the Fourth of July holiday “because we don't want the timeline to kind of tick down while people are on vacation.”

“We’re encouraging everybody to get their pieces in line so it goes smoothly,” Palmer said.

Once the state opens the process, the League expects there will be a web-based portal — similar to what some other states are using — for cities to complete their applications.

“Then the dollars will start flowing,” Palmer said.

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