“When Congress throws so much money at the cities that they don’t even know how to spend it, we have a problem,”
A county government in southeast Michigan is moving forward with plans to build a sports complex with federal COVID relief money that could cost up to $80 million. Some residents are pushing back.
A rural county in Utah spent $321,000 in federal COVID relief money to get snow to the Buckskin Hills Ski and Snow Tubing Hill. An auditor’s report later flagged some of the COVID relief spending.
In Tennessee, Shelby County Schools spent $25 million on air purifiers from Global Plasma Solutions, but a lawsuit maintains the purifiers are ineffective.
These are just a few of the examples of how local governments spent billions of dollars in federal taxpayer money provided by Congress to stem the impacts of the COVID-19 pandemic.
Adam Andrzejewski, founder and CEO of government watchdog OpenTheBooks.com, said the amount of federal money has municipalities struggling to spend it.
“When Congress throws so much money at the cities that they don’t even know how to spend it, we have a problem,” Andrzejewski told The Center Square.
Local governments across the country that are flush with federal tax dollars in the wake of pandemic relief are considering a wide range of projects, some of which could saddle taxpayers with operational costs for years to come and others that have raised concerns about community priorities.
Lenawee County in southeast Michigan is moving forward with plans to build a sports complex that could cost up to $80 million. Dubbed Project Phoenix, local leaders hope the project will help bring in out-of-town travel sports teams and boost the local economy with money and jobs. But a consultant’s report lists a number of challenges for the Lenawee County project, including the possibility that the facility will operate at a financial loss each year if it doesn’t secure enough commercial tenants.
The report also noted the proposed facility could face “strong competition” from existing sports facilities in the region and benefits could be capped by the limited number of hotels in the area. The report further noted that “several peer facilities operate at a deficit” and “facilities of this type are often built for the economic impacts they can generate to the surrounding area.”
Lenawee County officials estimate the facility will create 200 jobs and generate $15.2 million in total economic activity in the area, based on the report from Crossroads Consulting. Crossroads Consulting noted the report “does not account for potential short- or long-term implications resulting from COVID-19.” The pandemic has hit the travel and tourism industries especially hard.
Kevon Martis, the zoning administrator in Deerfield Township who spoke about the project as a county resident, raised concerns about the project and its location.
“My No. 1 concern was how did this make it to the top of the county’s priority list?” he said. “It’s not in the middle of the county and the cost is twice the annual budget for the county government.”
Lenawee County Administrator Martin Marshall didn’t respond to multiple requests from The Center Square to discuss the project. Deputy Administrator Kim Murphy also didn’t respond to a request for an interview. Lenawee County Board Chairman David Stimpson also did not respond to a request for comment.
Other projects across the country got funding in the race to meet federal COVID relief spending deadlines.
COVID Relief Spending
Uintah County, in Utah, spent $321,000 in federal COVID-19 relief money to get snow to the Buckskin Hills Ski and Snow Tubing Hill. An auditor’s report later flagged some of the COVID relief spending.
The report found the county bought six snow guns and associated parts for the Buckskin Hills Ski & Snow Tubing Hill, totaling $146,862, including $3,000 in shipping costs. Each individual snow gun cost $19,999, just below the county’s $20,000 threshold for a sealed bidding process. While all five snow guns were purchased at once, the county split the invoice up to stay below the bidding threshold.
“The County circumvented established purchasing policy by splitting an invoice, ignoring open bid requirements, awarding contracts outside public meetings, and later retroactively modifying its purchasing policy,” according to the independent audit. “At the time, the County purchasing policy required that purchases exceeding $20,000 go through a sealed bidding process and be awarded in a public meeting.”
In Tennessee, Shelby County Schools spent $25 million on air purifiers from Global Plasma Solutions. A lawsuit has been filed over the effectiveness of the purifiers, but Shelby County spent $1 million on installation even after the Maryland and Delaware lawsuits.
In some cases, questions about local COVID relief spending have led to federal criminal charges.
U.S. prosecutors charged Michael DiMassa, 30, of West Haven, Connecticut, with defrauding the city of West Haven of more than $600,000. Prosecutors said DiMassa, a city employee and state lawmaker at the time, created a company called Compass Investment Group that fraudulently billed the city of West Haven and its “COVID-19 Grant Department” for consulting services purportedly that were not performed.
Prosecutors allege DiMassa made cash withdrawals from the Compass Investment Group LLC bank account. Some of those withdrawals were made shortly before or after he was recorded buying chips at the Mohegan Sun Casino.
Others have left some taxpayers and officials scratching their heads.
In Flint, Michigan, Flint Public School officials authorized a $22,500 COVID-19 bonus for staff members using federal money intended “to safely reopen” schools just before the district in January shifted to online learning indefinitely citing COVID-19 concerns. The move put more than 3,500 students back into virtual learning, despite poor past results from remote learning and at least $99 million of federal money the U.S. Department of Education expressly designated “to reopen K-12 schools safely.”
Michigan state Rep. and House Education Committee Chair Pamela Hornberger, R-Chesterfield Township, called on Flint schools to offer in-person school, noting that proximate private and public schools are open in-person.
“If you got a $20,000 bonus, why wouldn’t you return to the classroom?” Hornberger said.
The Flint schools remained closed for about three weeks before reopening on Monday.
“While people of good will can debate how the money was spent, but the fact is that all of it was borrowed against our national debt – which is now $30 trillion and growing,” Andrzejewski said.
Brett Rowland | The Center Square
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