With less than 50 days before a Dec. 31 deadline to allocate its American Rescue Plan Act funds, Smithfield’s Town Council voted unanimously on Nov. 6 to add its unspent remainder to the town’s 2024-25 budget for payroll expenses.

Congress passed the $1.9 trillion COVID-19 pandemic relief package in 2021, which included $19.5 billion in aid to localities with populations under 50,000. Of this, Smithfield received $8.7 million.

As of July 11, Smithfield had committed $7.8 million, largely for costly one-time water infrastructure and parks and recreation upgrades, leaving just over $928,000 unallocated as of that date.

“The federal guidelines require that all ARPA funds be ‘obligated’ by the end of December, 2024,” Town Manager Michael Stallings wrote in an Oct. 28 memorandum to the council. “An obligation is defined in the Federal guidelines as an ‘order placed for property and services and entry into contracts, subawards, and similar transactions that require payment. While Council has allocated funds to specific projects, that does not satisfy this definition of an obligation. Working with our auditors, staff have recommended we appropriate the remaining ARPA funds that are left to obligate into the FY 24-25 operating budget to cover payroll expenses through the end of the calendar year.”

According to Stallings’ memorandum, the council vote would move $3.6 million in ARPA funds into the 2024-25 budget. Roughly $2.3 million will be used to fund payroll for July 1 through Dec. 31, 2024, and the remainder would cover the already approved and obligated Windsor Castle Park footbridge replacement project and the nearly completed construction of a two-story building at the Luter Sports Complex that houses a concession stand, bathrooms and a second-floor boardroom.

Moving the ARPA money to cover payroll “will satisfy the obligation requirement in the Federal guidelines,” Stallings’ memo states. The non-ARPA funds previously approved in the town’s budget to cover payroll “will then be freed up to fund the remaining ARPA projects that have previously been approved, and will still leave around $500,000 left to allocate.”

The $928,000 remaining as of July was the amount not allocated to any project, not the amount left to spend, Stallings told The Smithfield Times.

The $2.3 million that would cover payroll “is the dollar amount that has not been spent yet,” Stallings said. “All but the $500,000 has been allocated to projects that are currently under way or have yet to get started.”