Economic Resilience and Recovery Planning Following COVID 19

SUMMARY: With all this federal funding, do our local governments have the capacity and capabilities to manage, let alone apply for all this funding? Let’s take a look focusing on USEDA as an example.

The CARES Act provided an unprecedented amount of recovery funds in 2020- over $1 trillion. The American Rescue Plan Act (ARPA) surpassed this earlier this year with nearly two trillion in recovery funding. The US Department of Commerce Economic Development Administration (USEDA) received $1.5 Billion to support economic recovery projects under CARES and $3 Billion under ARPA. To provide some perspective on how monumental this is for USEDA, their annual appropriation in FY 2019 was $333 Million. So, CARES was 4.5 times that amount and ARPA is nearly 10 times that amount.

The White House also recently announced an unprecedented nearly $5 billion to “increase their preparedness in advance of climate-related extreme weather events and other disasters and improve their ability to recover after these events” with $1 billion for the Building Resilient Infrastructure and Communities Grants (BRIC) program and $3.46 Billion for the Hazard Mitigation Grant Program (HMGP). And a few days after that announcement, the US Senate passed a $1 Trillion Bi-Partisan Infrastructure Bill, but Senate Democrats are currently working on a Partisan $3.5 Trillion spending budget for the Infrastructure Bill before the legislation goes to the House.

All this funding will provide planning and infrastructure assistance to state and local governments across the country. But do our local governments have the capacity and capabilities to manage, let alone apply for all this funding? For those who work in disaster recovery, we know all to well that this is a major challenge for local communities. Further, rural, low-income, and indigenous communities are disproportionately impacted by economic disruptions and typically do not have the same local capacity to apply for and manage funds. This issue came up with last year’s FEMA funding indicating that grant awards were preferential to higher income communities. While it may be a fact that more higher income communities were successful in receiving grants, those of us in recovery are aware that it is more likely the case that these communities had more capacity to apply for those funds within the timelines and deadlines compares to low-income communities.

USEDA’s ARPA funding includes several Notice of Funding Opportunities (NOFOs) which is not typical for this agency- they normally have one NOFO per supplemental. The USEDA ARPA programs are innovative and encourage innovative and transformational projects that encourage regional recovery and strong stakeholder partner engagement. To get the money “on the street” quickly, USEDA has invited states to apply for non-competitive grants with 45 days to respond and no match required. There are also two-phase challenge grant competitions, a coal communities commitment set-aside (based on an interagency initiative), a NOFO specifically for indigenous communities, and several other initiatives. There are several deadlines and different eligibility and match requirements. Some of the competitive programs are due as soon as this October. USEDA must obligate (award) the funds by the end of the fiscal year (September 2022); and they are encouraging all applications be in by March 2022 (for those that do not have earlier deadlines). The NOFOs are long and detailed- as they should be. But as indicated earlier, USEDA typically has one NOFO for disaster supplemental funding. And to add to this- USEDA changed their investment priorities with the change of administration this past Spring- so grant applicants will need to have a better understanding of that as well. This may be a lot for potential grantees to handle.

The “typical” USEDA grantee or major grantee stakeholder is a USEDA designated Economic Development District (EDD). If there is not an EDD, there may be an organization responsible for a USEDA funded Comprehensive Economic Development Strategy (CEDS). If there is not a CEDS, there is usually an approved “CEDS equivalent.” USEDA also funds organizations with Revolving Loan Funds (RLF) and university centers; these are also USEDA “stakeholders.” This is all to say that states are not typically engaged with USEDA like they are under ARPA. Further, this amount of funding is likely to attract grant applicants not familiar with USEDA. I’m providing USEDA as an example, but this is applicable to several federal agencies receiving supplemental funds for grant-making.

These are my concerns for communities that lack capacity and/or capabilities to competitive for these projects:

Many of these communities do not have familiarity with different federal programs and the different grant application processes, eligibility, local share, compliance reporting, and “terms and conditions” of grant awards.
Communities may not be familiar with federal points of contact that cover their area (for USEDA, these are Economic Development Representatives (EDR)) putting them at another potential disadvantage.
Many communities do not have familiarity working with several federal grant programs to leverage programs for larger initiatives or, at a minimum, ensure that their grant awards align. For example, a state may be considering a grant award to update their Hazard Mitigation Plan to include resilience from FEMA, but they are also pursuing a state economic resilience plan with USEDA.
The alignment and leveraging of federal funds and plans provide another challenge. Many communities do not embrace cross-sector and interagency planning. “Silos” are a major challenge for all this federal funding. In the recovery world, we know how important it is for cross-sector engagement to maximize the use of various recovery funds.
With all the funding programs available- Treasury funds directly to local governments, HUD’s CDBG funds, etc. it may prove to be confusing how to prioritize projects and determine which funds are most appropriate for which project.
Many of these NOFOs and pending NOFOs have very quick turn-around times. Will communities with less capacity and capabilities be able to provide the necessary documentation to meet these aggressive deadlines? It is understandable why there are quick turnaround times; however, we still need to look at how this impacts communities.
Some states and cities have an office of resilience or recovery office in disaster-prone states and territories. However, many regions and states do not have the frameworks in place to apply for, manage, and procure contracts for multiple federal grants.
USEDA is encouraging transformational projects that are driven from a regional approach encouraging grant applicants to “think bigger.” Many communities need to focus on their existing conditions and how the systems are working before they consider applying for moonshot projects. Aspirational goals are great, but they need to consider their baseline as well. Can communities do both?
Finally, the concept of “resilience” is often misunderstood. It doesn’t help local governments when each federal grantmaking agency has a different definition of resilience. It is understandable that agencies would have their own definition, but this can be confusing for grant applicants considering funding from different federal agencies

USEDA is prioritizing equity and resilience with their updated investment priorities; and this is clear through the initiatives highlighted under their ARPA grant programs. Further, language related to equity and resilience can be seen in other agency funding opportunities as well. That being said, will communities that lack the capacity and capabilities to work with different federal funding sources be provided the assistance they need to plan and carry out these projects, so they are a “level playing field?”