Sep 29, 2022 - News

Billions in pandemic relief flows in Colorado with little oversight

American Rescue Plan Act funding for Colorado counties
Data: U.S. Treasury; Map: Erin Davis/Axios Visuals

The massive chunk of federal pandemic relief for Colorado is landing directly in local government bank accounts with essentially no strings attached.

Why it matters: The unprecedented, one-time infusion raises major questions about how it is spent and whether it will generate the economic stimulus promised.

Driving the news: Colorado cities and counties are set to receive $1.7 billion of the $3.8 billion earmarked for the state in the American Rescue Plan Act, U.S. Treasury figures show.

  • Even the smallest counties are getting at least $10 million, a potentially game-changing sum for rural areas.

In addition to law enforcement and homelessness programs, much of the spending is directed toward construction projects, per a new analysis by Axios Denver in collaboration with the nonprofit Marshall Project.

  • Larimer County set aside $610,000 for improvements to the swim beach at Carter Lake.
  • Palisade spent about $200,000 on a new ambulance.
  • Branson put $18,000 into a new greenhouse to grow food for the community.

Other localities directed money to efforts that range well beyond traditional pandemic health care and economic stimulus initiatives, federal reports show.

  • Pueblo created a $500,000 program to pay local children $100 to read 10 books.
  • Delta County bought a $37,000 machine to scan voter ballots.
  • Jefferson County spent at least $800,000 on wildfire mitigation work and another $135,000 to hire a mitigation specialist.

What they're saying: "This gives flexibility to use money to support people who need help," said John Swartout, executive director of Colorado Counties Inc., which assisted counties in allocating the money.

Of note: The spending likely fits within the parameters set by Congress and the Biden administration because the rules only prohibited contributions to pension funds, debt service and budget reserve accounts.

  • The state's two U.S. senators, Michael Bennet and John Hickenlooper, advocated for flexibility after localities struggled with tighter rules governing the millions in federal CARES Act money, Swartout tells us.

Between the lines: In many places, such as Denver, leaders sought public input, but much of the money went to powerful agencies and entities, records show.

  • Not all counties have received their entire allocation and millions more in spending is expected in coming months.
  • The varied processes and priorities led to wide disparities in spending, but Swartout said he's not worried about misspending because counties often participate in federal audits and must account for the money.

Details: ARPA earmarked the funds to local governments as "revenue replacement," and many used it to backfill services or projects that would have suffered budget cuts.

  • Colorado Springs gave $3.5 million to the U.S. Olympic museum to defray lost revenue from shutdowns.
  • Don Warden, Weld County's director of finance, said the county lost about $80 million in tax revenue from the drop in oil prices. The county decided to use $38 million for road and bridge projects that would have otherwise been deferred. Northglenn did the same.

Other areas prioritized water quality and broadband projects, which are two identified uses in the federal bill.

  • Larimer County has made broadband a priority, and budget director Josh Fudge said federal dollars allowed new service expansions that otherwise would have taken years to achieve.

The bottom line: "This was a one-time chance to put pots of money together to address a critical infrastructure problem," Swartout said.

Related: Read the first and second installments in our ongoing series.

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