Northeast Ohio cities say consultants help them spend smart with ARPA money, but are they worth the cost?: Stimulus Watch

CLEVELAND, Ohio — Cities and counties all through Northeast Ohio have been spending a whole bunch of hundreds of {dollars} on consultants to handle their federal stimulus spending.

The consultants, many from main companies, promise to assist Ohio’s cities and counties spend good with their hundreds of thousands in {dollars} from the American Rescue Plan Act.

However is including an additional layer of paperwork the suitable funding?

Whereas the proportion of ARPA cash dedicated to consultants is a slim share of the general cash, charges to consultants nonetheless run into the six- and seven-figure realm. For instance, the $191,000 Cleveland Metropolis Council accredited for a marketing consultant makes up .04% of the $512 million town obtained from ARPA.

Nonetheless, contemplate this: It prices roughly $50 to fill a single pothole, in keeping with SealMaster, an organization that makes pavement merchandise and gear. Town might fill hundreds of potholes for the price of hiring a marketing consultant.

The native pattern to rent ARPA consultants echoes one seen all through the nation, stated Alan Berube, a senior fellow on the Brookings Establishment, who research financial growth in cities and ARPA spending.

Used appropriately, consultants “may be fairly useful,” Berube stated.

The classes for eligible ARPA spending embrace: financial support to households and small companies, premium pay to important employees, changing misplaced authorities income, enhancements to water or broadband or sewer infrastructure, in keeping with the Federal Register.

“You don’t want a whole bunch of billable hours to a legislation agency to determine (that) out,” Berube stated.

Nonetheless, many municipalities are doing simply that, hiring a marketing consultant to determine which tasks are eligible for ARPA cash.

To do this, native governments have seemed to worldwide firms, reminiscent of Guidehouse LLP, and extra native companies, together with Ohio-based legislation agency Bricker & Eckler.

“I’ve had some shoppers inform me, ‘We simply don’t have the bandwidth to get into that ARPA steering,’” Jeffry Harris, a public finance lawyer at Bricker & Eckler, advised cleveland.com.

Bricker & Eckler, which is consulting for town of Cleveland and Medina County, has seen a rise in authorities shoppers searching for assist with ARPA spending due to the sophisticated nature of the act’s steering, Harris stated.

“ARPA, for native governments, doesn’t lend itself to generalization,” Harris stated. “It’s all fact-based.”

Whereas some municipalities advised cleveland.com they requested consultants to assist them decide what’s eligible spending, others are merely making an attempt to handle the large sum of money headed into native coffers, Berube stated.

“Now, with the flood of sources, not each metropolis is within the place to do multi-dimensional allocation of sources, and so they’re searching for assist with that,” Berube stated.

Some native governments, reminiscent of Lorain County, have opted to make use of in-house sources to find out how greatest to spend ARPA {dollars}, Lorain County Commissioner Matt Lundy stated in an electronic mail.

“We’re working intently with our division heads to find out funding wants and eligible investments. Our administrator is ending ARPA Request Kinds for non-profits. Our assistant county prosecutor evaluations all supplies to verify we’re in compliance.”

Though Lorain County plans to make use of in-house and different authorities sources to allocate ARPA cash, the county does plan to rent a marketing consultant to implement a broadband enchancment plan, Lundy stated.

The Metropolis of Lakewood has been in talks with marketing consultant Guidehouse about how different cities are utilizing ARPA cash, however has not employed a marketing consultant, in keeping with an electronic mail from the mayor’s workplace.

The the explanation why cities and counties say they’re hiring consultants to assist oversee ARPA cash distribution differ.

Medina County, for instance, doesn’t have a normal, in-house lawyer, in keeping with the county’s listing and stated Assistant County Administrator Amy Lyon-Galvin. That’s why the county employed Bricker & Eckler in February for as much as $15,000 to supervise ARPA spending, in keeping with county paperwork.

Lyon-Galvin stated that, beneath the settlement with the agency, the county would solely invoice for time spent addressing ARPA-related questions. So, the whole quantity billed would fluctuate based mostly on the quantity and complexity of requests the county makes.

The Metropolis of Lorain is within the means of hiring a marketing consultant to supervise ARPA funds, Lorain Mayor Jack Bradley stated in an electronic mail.

“We wished to ensure that we had one other layer of evaluation earlier than we spent hundreds of thousands of federal {dollars},” Bradley stated. “The Treasury rules may be considerably sophisticated and our legislation director thought it was clever to make use of a marketing consultant to assist us make funding selections.”

Whereas massive governments have extra in-house sources to spend on determining the way to distribute ARPA cash, in addition they have extra money to distribute. So, economies of scale don’t essentially make the job simpler for giant cities, Berube stated.

Cleveland Heights lately accredited spending as much as $250,000 to rent Guidehouse to supervise the distribution of its ARPA funds. Throughout the pandemic, Cleveland Heights confronted deep funds cuts, which elevated metropolis workers’ workloads, stated metropolis spokesman Mike Thomas.

“As a substitute of including capability on workers, it made extra sense to outsource it,” Thomas stated.

Cleveland Heights obtained $38.8 million in ARPA cash, however a lot of that’s already earmarked, cleveland.com reported beforehand. Throughout a current assembly, Council President Melody Pleasure Hart stated Guidehouse can be serving to Cleveland Heights spend $10 million of the ARPA {dollars}.

Cleveland Heights is only one of many municipalities who’ve employed Guidehouse, previously the PricewaterhouseCoopers public-sector marketing consultant wing, which markets itself as a bunch that may minimize by way of crimson tape.

The Metropolis of Dayton, for instance, accredited spending as much as $2,050,807 for Guidehouse to supervise ARPA funds till as late as 2026, in keeping with paperwork obtained by way of the Freedom of Data Act.

Whereas Guidehouse has a Dayton workplace, the contract with the Metropolis of Dayton lists the corporate handle in McLean, V.A.

Guidehouse, which has places of work in a number of continents, has additionally been concerned in coronavirus-related work on the federal stage, the place it has obtained $204 million in federal contracts for COVID-19 response, in keeping with ProPublica.

Cleveland Heights and Guidehouse held their first administrative assembly this week. Earlier than the assembly, Thomas advised cleveland.com it’s “nonetheless a bit of early” to say whether or not they’re glad with the marketing consultant.