'Nobody is ready:' Many U.S. cities lack resources to chase $1 trln infrastructure windfall

Erie Indemnity

10/02/2022 11:00

By Andy Sullivan
    Feb 10 (Reuters) - Erie, Pennsylvania could use a facelift.
The lakefront city of 100,000 has been adding jobs and
businesses downtown, but it remains saddled with vestiges of its
industrial past: abandoned factories, ugly concrete buildings,
decaying houses.
    Leaders have written a stack of development plans, but lack
the money needed to turn them into reality.
    Now their dreams seem possible. Congress last year passed
President Joe Biden's $1 trillion infrastructure https://www.reuters.com/world/us/roads-bridges-airports-details-bidens-1-trillion-infrastructure-bill-2021-11-05
 law, which provides $550 billion in new funding for bridge
repair, environmental cleanup and other projects that could
transform places like Erie. 
    It amounts to the largest U.S. public-works surge since the
1960s, but there is no guarantee those dollars will make it to
Erie. Roughly half of the funds will flow through state
governments, while the rest will be doled out on a competitive
basis https://www.reuters.com/world/us/us-infrastructure-bill-makes-power-broker-transportation-chief-buttigieg-2021-11-11.
 
    To win the money, local governments will have to apply for
it -- and after decades of belt tightening, many lack the
bureaucratic muscle to do so. 
    "Nobody is ready because nobody has needed to be ready until
now," said Perry Wood, executive director of the Erie County
Gaming Revenue Authority, which distributes gambling money for
redevelopment projects.
    Since the onset of the COVID-19 pandemic two years ago,
local governments have shed 3.7% of their administrative jobs,
according to the U.S. Labor Department. 
    Some have had trouble handling the $500 billion in COVID-19
aid that Washington has sent to local governments. One out of
five communities in Michigan missed out on the initial round of
federal coronavirus aid because they didn't know how to fill out
the paperwork, said Shanna Draheim of the Michigan Municipal
League.
    
    CHALLENGE FOR SMALL CITIES
    Many turn to outside experts. The city of Mason, Michigan
has set aside up to $40,000 to hire a consultant to apply for
funding to upgrade its sewer system -- a substantial expense for
a community of 8,300 people.
    "It makes it very challenging for smaller communities to
position themselves to be competitive," city manager Deborah
Stewart said. 
    Academic studies have found that federal homeless https://www.tandfonline.com/doi/abs/10.1080/07352166.2019.1638267
 and rail https://journals.sagepub.com/doi/10.1177/1087724X12469794
 grants are more likely to go to communities that can show they
will use the money effectively, rather than those that need it
most.
    That can favor cities which have the resources to navigate
federal bureaucracy. In the past fiscal year, just 11 counties
received 50% of the competitive grants awarded by the agencies
that will handle most infrastructure spending, according to a
Reuters review of federal data.  
    Experts say smaller cities might get boxed out in the
scramble for infrastructure dollars. "It's going to be
overwhelming in many cases and could actually favor large,
prosperous metropolitan areas," said Bruce Katz, a Drexel
University professor who is helping Erie seek infrastructure
grants.
    Many federal programs also require local governments to
provide matching funds -- a hurdle that has kept Erie from
participating in recent years, according to the city's planning
director, Kathy Wyrosdick. Washington also provided little help
navigating the red tape. 
    "It's disingenuous to say, 'We'll give you the money if you
figure your own stuff out,'" she said.
    The Biden administration says it is working to reduce those
barriers. 
    Many of the new competitive grant programs include
carve-outs for "disadvantaged" communities that have suffered
from poverty, pollution or racial discrimination. The
administration also requires that at least 40% of its spending
on clean energy and climate change benefit those areas.
Matching-fund requirements can be waived in many cases,
officials say.
    The White House last week released a 461-page guidebook https://www.whitehouse.gov/wp-content/uploads/2022/01/BUILDING-A-BETTER-AMERICA_FINAL.pdf
 that breaks down the law's funding opportunities, and the
Transportation Department has held outreach sessions for local
governments. 
    Biden himself has met with mayors and other local leaders to
promote the law, and the White House's infrastructure
coordinator, former New Orleans mayor Mitch Landrieu, says he
has spoken to hundreds of officials.
    In Erie, civic groups, governments and private businesses
like Erie Insurance, the city's largest employer, have developed
a plan to win as many federal dollars as possible. 
    A first step is to hire more planners, grant writers and
other bureaucrats, with local philanthropies covering the $11
million cost. That should help the region weather other dramatic
events, such as climate change or another pandemic, in years to
come, Wyrosdick said.
    "The system that needs to be in place to compete for these
federal dollars is the system that should have always been in
place," she said.

 (Reporting by Andy Sullivan; Editing by Scott Malone and
Alistair Bell)
 ((andy.sullivan@thomsonreuters.com; +1 202 421 5603;))