Decatur eyes spending COVID relief funds to spur growth in Limestone

·7 min read

Jan. 23—The city's undeveloped area north of the Tennessee River, viewed by officials as being on the verge of an economic boom, will likely be where Decatur spends most of the $10.8 million in COVID-19 relief funds it is receiving from the federal government.

The funding is from the $350 billion American Rescue Plan Act (ARPA) approved by Congress and signed into law on March 11 as "guaranteed direct relief to cities, towns and villages" to offset the impact of the coronavirus pandemic.

Chief Financial Officer Kyle Demeester said Friday the city received $5.4 million in August and he expects the city will receive the other half this summer.

While some local counties and municipalities have already decided how they plan to spend the money, Decatur officials held off on the decision as they awaited more certainty in federal rules on how the money can be spent.

The U.S. Treasury Department sent out specific guidance Jan. 7. The final rule takes effect April 1.

Demeester said the interim rule issued in May appeared to limit the city's use of the money, but the latest federal instruction says cities can use up to $10 million on governmental services.

"This little wrinkle benefits us drastically," Demeester said. "The standard amount is $10 million, and that's almost our entire allocation. This makes it a lot broader on what we can potentially spend the money."

One of the allowable expenditures under the rule is that the city can "invest in water, sewer and broadband infrastructure, making necessary investments to improve access to clean drinking water, to support vital wastewater and stormwater infrastructure, and to expand affordable access to broadband internet."

That focus on infrastructure caught the attention of Mayor Tab Bowling and the City Council.

Bowling said the city has good coverage with its water and broadband infrastructure, so sewer infrastructure focused on growth is the likely choice.

Along with Bowling, most City Council members said they support helping Decatur Utilities expand sewer in the area where the city is building an overpass at Alabama 20 in Decatur-annexed Limestone County.

The city received a $14.2 million BUILD grant from the U.S. Department of Transportation to use toward the $18 million overpass. The overpass project is meant to spur economic development in this largely undeveloped area that city leaders have believed for decades is a prime location because of its proximity to interstates 65 and 565.

"We need to use this money on infrastructure," Councilman Kyle Pike said. "This is not money the city can use on recurring expenses. We may never see this kind of money again."

Decatur Utilities has sewer mains that run east along Alabama 20 to I-65. Council President Jacob Ladner said the city would need to help the utility run sewer north on Bibb Garrett Road and possibly along Airport Road, if residential development materializes there.

Road improvements

Ladner said a 1.5-mile portion of Bibb Garrett Road, which runs north from the overpass and then turns east to the city limits at I-65, needs to be upgraded.

He said Airport Road, which runs past Calhoun Community College and intersects with Bibb Garrett Road from the west, also needs to be improved.

"That road is horrible," Ladner said.

Airport Road is a Limestone County road, and Ladner said the city may eventually need to take it over from the Limestone County Commission to make the needed improvements.

"We expect the traffic on these roads to really pick up when the overpass is finished and the area begins to develop," Ladner said.

Ladner said he expects this could be a potential area for residential development, which he said is needed to support the retail development the city is trying to attract to Alabama 20.

Councilman Carlton McMasters estimated the city would need to spend up to $3 million on sewer, roughly $3 million on Bibb Garrett Road and as much as $4 million on Airport Road.

"That's almost all of the $10 million there," McMasters said. "We need to be mindful of how we spend the money, but I think we need to use it as a catalyst for growth."

Councilman Hunter Pepper said he "would go along" with the plan to use the money in Limestone County "if there's opportunity there. If there's no opportunity, then it's a waste of money and a waste of time."

Other needs

Bowling said a large portion of the federal funds could be spent in Decatur-annexed Limestone County but he and the council members need to remember "there are other opportunities within Southeast and Southwest Decatur in which this money can help us develop."

Ladner said there are other growing areas of the city that are developing and will need sewer and roads, like the Burningtree area, the Modaus Road Southwest area near Austin High and the McEntire Lane Southwest area.

Councilman Billy Jackson said the council is focused too much on what it wants, and instead needs to sit down and make a prioritized list of critical needs.

Jackson, who was against the initial extension of sewer lines along Alabama 20 in 2002, disagrees with the plan to spend the money in areas of anticipated growth.

"This council and mayor seem to work on a 'build it and they will come' approach, and that's never really been proven to be actuality," Jackson said. "We put that sewer out on Alabama 20 in the early 2000s, and the growth they said would happen never did.

"We have so many pressing needs in the city. I think we should address those needs before doing work for something that may or may not happen."

Instead, Jackson said, the council should spend the ARPA funds on addressing current needs like the city's drainage problems.

"We've got flooding throughout our city and we're getting more of these heavy rains," Jackson said. "Much of our city is older now, so our drainage is undersized and antiquated."

Ladner and McMasters said they also want to correct some of the city's drainage problems.

Ladner said he would like to discuss at some point the issue of providing sewer to some of the areas of the city where residents are still on septic tanks.

Employee bonuses?

McMasters and Pepper said they want to add more paving to this year's budget before the spring.

"We really need to knock out some paving," Pepper said. "We're behind on so many roads, it's really not even funny. It's becoming a laughing matter to people in other cities."

Pepper said he would like to use a portion of the ARPA money to give some employees raises or bonuses. He noted that the Morgan County Commission approved about $2 million in employee bonuses — $5,120 each for full-time and about $3,500 for part-time workers.

Demeester said employee pay is considered a city service so the council could give employees a one-time pay increase with the ARPA money.

Bowling said he believes the council wants a small portion of the ARPA money "to go to something that residents can touch, feel and enjoy. We'll look at recreation, parks and other possibilities in this area."

McMasters and Ladner said the city is in a great financial situation to address many of these needs while setting Decatur up for more growth. Not only is the city getting the ARPA money, it also has roughly $20 million in the unassigned fund balance and $20 million from a bond issue. There will also be about $42.2 million from the 3M chemical contamination lawsuit settlement that is designated for recreation facilities and supporting "community development and recreation."

"It's really like a shell game," McMasters said of the varying funds that can be used for different purposes.

Ladner said he "doesn't care where the money comes from" as long as it's used to improve the city.

The ARPA funds must be obligated by Dec. 31, 2024, and expended by December 31, 2026.

bayne.hughes@decaturdaily.com or 256-340-2432. Twitter @DD_BayneHughes.