CEO & Founder
SLATE Research & Consulting
The impacts of the Federal funding. Ryan Gallant, CEO & Founder of SLATE Research & Consulting, joined the podcast to dive deep on the American Rescue Plan Act and answer questions about how it will impact local government. He discussed what the funding could be used for and how it differs from the CARES Act funding. He also makes the case for using ARPA funding for IT needs and digitizing services.
Host: Alyssa Dinberg
Alyssa Dinberg 00:00
All right. Coming to you from Denver, Colorado, this is Gov Love, a podcast about local government. Gov Love is produced by ELGL, the Engaging Local Government Leaders Network. We engage the brightest minds and local government. Today’s Gov Love episode is brought to you by Granicus. Short term rentals or STRs are found on sites like Airbnb and VRBO. Their numbers are growing at a staggering rate and 1000s of communities across North America. What does this mean for government? It’s time to act. STRs can be a tremendous source of revenue for local government or real community nuisance. It all depends on adopting the right Compliance and Enforcement strategy. To date, over 350 communities have partnered with Granicus on their STR compliance programs for everything from address and host identification to ordinance consulting and permitting tools. Interested in learning more about the STR market in your community and how Granicus can help? Visit granicus.com to schedule a free consultation. That’s granicus.com for more information. I’m Alyssa Dinburg, the COVID-19 Recovery Coordinator for Clear Creek County, and today I’m joined by Ryan Gallant with SLATE Research & Consulting. Ryan works with IT companies who sell to, sell to local government and education, but also provides his services for free to the public sector. Ryan has over 15 years of research and consulting experience and has worked directly with local governments across the nation. Ryan, welcome to Gov Love.
Ryan Gallant 01:41
Hi, Alyssa, thanks so much. Happy to be here.
Alyssa Dinberg 01:43
Thanks for being here. We’re super excited to have you even though you’re wearing a Florida shirt. we’ll forgive you.
Ryan Gallant 01:50
I’ll have to hope all my friends back home Forgive me for talking to a Crimson Tide fan.
Alyssa Dinberg 01:58
So today we’re going to talk about the American rescue plan or ARPA for short. Ryan’s gonna walk us through some of the most common misconceptions around ARPA so far, and how to help us sort out the facts versus the rumors. But before we get started, we are going to go through one of our signature lightning rounds. We do this with every episode and I am super excited to hear your answers. I think you can handle some of these questions that I’ve I’ve proposed. So you’re ready? Okay. He looks a little nervous. You guys can’t see his face, but he looks a little nervous. Okay, so number one. What did you eat for breakfast today?
Ryan Gallant 02:39
I took care of my daughter all morning today. We went and had a bagel and cream cheese. We sat out on the patio and had an everything bagel and cream cheese together. Delicious.
Alyssa Dinberg 02:50
That’s one of my favorite bag, that’s one of my favorite breakfasts for sure. Okay.
Ryan Gallant 02:54
Yeah, it’s got to be boiled. Boiled bagel.
Alyssa Dinberg 02:56
Yes, I agree with that completely. Okay, second question. And I want you to be honest, how often do you work from your bed?
Ryan Gallant 03:08
Besides checking the occasional email, I don’t do any actual work in bed, I have a pretty extensive monitor and lighting and office setup in my bedroom. When I lose my my lovely monitors, it suddenly becomes a lot harder to work on a laptop screen.
Alyssa Dinberg 03:26
That makes sense. I like to take my like first meeting of the day, which is usually just like a department check in where no one turns their cameras on. I like to take that one from bed but other than that, I do need my monitor.
Ryan Gallant 03:41
I’ll do reading in bed, you know, read articles, read journals, things like that. But any heavy duty work I I need my full setup.
Alyssa Dinberg 03:50
That makes sense. So what is your favorite scent?
Ryan Gallant 03:57
I thought about this hard. And I don’t know how to perfectly articulate it. But the smell of my my baby daughter when she gets out of the bath. And she’s clean. She has this amazing smell, warms my heart, makes me very happy.
Alyssa Dinberg 04:09
That’s awesome. That’s a good answer. I think a lot of parents will agree with that. What’s the hardest part for you about working virtually? And what’s the easiest?
Ryan Gallant 04:22
You know, I think the hardest part is something many families and working professionals are dealing with right now. My wife is at home working. We have a young daughter, her daycare is closed down because one of the workers there had COVID so my daughter has to stay home for two weeks and my wife and I are working so managing two different partners, a child, work from home, all in the same space. Many people are going through these difficulties but it can be challenging.
Alyssa Dinberg 04:54
Yeah, definitely what’s been the easiest for you?
Ryan Gallant 04:58
My kitchen is downstairs. I love that.
Alyssa Dinberg 05:00
Yes, I totally agree with that i actually eat lunch now that I work right next to my kitchen. And before I didn’t, I wouldn’t say that I eat lunch at lunchtime but I actually eat something now which is an improvement.
Ryan Gallant 05:17
Better than nothing.
Alyssa Dinberg 05:18
Yeah, exactly. All right. And last but not least sticking on the food topic. If you were a vegetable, what vegetable would you be and why?
Ryan Gallant 05:31
I’m torn between a corny, corny answer, an onion because I have layers from Shrek or a potato because I’m pretty boring. I don’t like to go out and do too many crazy things. I’m a homebody. I like to stay in. Potato is pretty neutral.
Alyssa Dinberg 05:48
I love potatoes.
Ryan Gallant 05:50
I love potatoes, too.
Alyssa Dinberg 05:52
Okay. All right. I think those are both good answers.
Ryan Gallant 05:54
That was hard.
Alyssa Dinberg 05:55
It is it is a hard question. And it’s one that I asked on every episode. So I have to ask that, I’m sorry. Alright, so before we begin, I do have some exciting news tickets for our ELGL Pop Ups are on sale now. ELGL Pop Ups are our approach to regional conferencing, and due to COVID, this year, we are hosting them virtually on May 21st. These events are a great way to learn more about regional local government topics. Tickets are $10 for students, which is so cheap, $40 per person, and $80 for an all access pass to attend any region sessions. We also have volume discounts. So if you want to sign up your full team, feel free to visit us at ELGLPopUps.com, save your spot today. That may 21 date is coming around the corner. So hopefully, everyone can make it. Alright, so let’s get started. We’re going to talk about ARPA. I am very personally excited to learn more. As I mentioned in my intro, I’m working with COVID. And so these dollars are going to greatly impact our COVID relief efforts. So this question is something that a lot of people are probably wondering, what is the difference between the CARES Act and ARPA?
Ryan Gallant 07:15
So something that I have noticed becoming more and more prevalent in my work with both private sector and public sector is CARES Act and ARPA are becoming a little bit interchangeable for some people. And it’s important to understand that while there are some similarities, and there’s some crossover, these are two entirely different pieces of legislation. So the crossover comes in some of the funding streams that were established during the CARES Act. So in March 2020, when the CARES Act passed, for example, the elementary Fund and the Higher Education Fund were created and money was appropriated. ARPA also appropriates more money to those same funds. It’s actually the third appropriation to those funds. Other funding streams that were created in the CARES Act, such as the Coronavirus Relief Fund, which was the aid to state and local government, in the CARES Act are not included in ARPA. There are new funds, state and local fiscal relief recovery funds. While they’re similar, the rules around what the money can be used for how long governments have to use the money. And how the money is distributed is slightly different than the CARES Act.
Alyssa Dinberg 08:32
Great. Awesome. That was super helpful to understand I’m so in terms of the difference with ARPA in spending, what does that look like? Because I know that there are some differences around how the money can be spent.
Ryan Gallant 08:52
So when the CARES Act was passed, in March of 2020, there was a lot of confusion. A lot of people were waiting for guidance from either their state or local leaders or the federal government about how the money could be used. In the CARES Act, the money needed to be directly in response to the COVID-19 pandemic. It also could not be used to fill any revenue gaps from a tax base reduction or loss of sales tax, tourism tax, all of these things that went down during the pandemic. You couldn’t use the CARES Act funds to fill those gaps. With ARPA, you can. They can be used to fill any revenue gap in comparison to January 2020. So they take your your revenue projections from January 2020 and then compare them to what actually happened and the gap. The funds from ARPA can be used to fill that gap.
Alyssa Dinberg 09:57
Are there any differences with projects that can be funded other than just filling the gap, filling the gap?
Ryan Gallant 10:06
Yeah, the use cases for ARPA are really quite broad, which provides a lot of opportunities for local governments to act in a way that makes most sense for them. And the way that’s going to help them best recover, and carry on into the future into the post COVID-19 world. For example, in the CARES Act, many governments had to quickly set up remote workers with laptops, connectivities, they needed to get networks, firewalls, VPN, all of this going. In the rush to set up remote work, not all of these endpoints were secure. Or maybe their laptops were purchased. Because we needed to buy in bulk. So we got a good price. But we’re finding that the hardware isn’t durable, and it’s not lasting a long time. This money can be used to say, for cyber security, secure the remote work, secure your distance learning, upgrade your hardware to enable remote work. So those are some prototypical tech uses you might see for this for funding, other tech uses that would fall under the use cases would be setting up digital services for citizens. So they can access DMV permitting, tax licensing, all of those day to day services that many local governments, prior to the pandemic, were still doing face to face or through paper, now’s a great opportunity to use, great opportunity to use your funding to modernize and digitize.
Alyssa Dinberg 11:43
That’s really awesome. I know a lot of local governments are going to benefit from that. I’m, I’m really curious to see how services like the services that we provide start changing based on this. Can you try, oh, sorry, go on.
Ryan Gallant 12:01
No, I was just going to say, kind of going off what you were just saying, What changes this will produce. I also view ARPA as more significant than just a one time aid package. If you look at what the Biden administration is doing right now, and the priorities they’re laying out in acting on through legislation, executive orders, you can tell this is new deal level change to government and education. You can see that the Biden administration is focusing on infrastructure, and that now includes broadband, cybersecurity. This is really a chance to make a generational investment in local governments and education to help them prepare and be ready for the next, you know, the next era where more and more services are expected to be digital. Citizens expect to be able to easily and safely access information, and they expect to be able to work remotely securely. I really think this is going to have long lasting benefits and impacts for local government.
Alyssa Dinberg 13:15
Yeah, I think one of the things that I’m most excited about having worked very closely with the CARES dollars, the CARES dollars were very much retroactive in their benefit, and while yes, we did need, we did need that immediate support, ARPA really has the potential to set us up for generations to come. And that’s, that’s really exciting. And as a, as a public servant, I’m really excited to be a part of that. And I know a lot of our listeners are as well.
Ryan Gallant 13:48
It’s a very exciting time in our field, definitely. There’s gonna be a lot of big changes. And, you know, obviously, the COVID-19 pandemic was horrible, and many, many people suffered and died and with economic impact, but in times of difficulty, the tech industry always seems to innovate. And so does local government. They really stood up during this challenge. A lot of people thought governments were going to have major, major difficulties going remote, distance learning had some problems, but on the whole local governments handled the problems very, very well. They adapted, they were agile, and they persevered.
Alyssa Dinberg 14:29
Yeah, I mean, it’s been pretty incredible. Can you talk about what funding is available for local governments and how is the allocations being determined?
Ryan Gallant 14:41
Sure. So for local governments, there’s one funding stream it’s called the Coronavirus local fiscal relief recovery fund. It’s got about $130-140 billion in it split between counties and cities. Half of the money is reserved for counties, and then the other half of the money is reserved for cities, the city’s money is split between larger cities over 50,000. And then jurisdictions below that split evenly between the counties and the cities.
Alyssa Dinberg 15:15
And how can a local governments figure out how much they’re getting? Like, where can they find out that information?
Ryan Gallant 15:24
So, for the official determination, we need to wait for the federal government or your state comptroller, or another government official from your state government to release that information, some states are on it, Texas, I know is already on it. There are estimates out, it’s a formula for the funding. So you can do the math and figure it out. And many people have, and that should give you a pretty good estimate, but the official numbers will either come from the federal government or your state government.
Alyssa Dinberg 15:57
Gotcha. Okay. Um, how do you access the funds, either for your department or your project? Because I know that money in this amount coming from the federal government is sometimes daunting, and seems like it’s never going to come.
Ryan Gallant 16:15
So this is where I am hearing the most questions in my work and the most confusion. I have County IT directors who have told me that their county manager has told them it could only be used for broadband, or, you know, I work with a tech company who has been telling their clients some other piece of information that’s not exactly right. This money is basically supplemental revenue to your local government. It’s not earmarked for any one specific cause or appropriation or project. Now, your local governmental leaders, the legislative body, and the executive, however your local government is set up, does have a fair bit of leeway, and how they want to use the dollars. So it’s up to you as a department leader, or a leader in your department, or your agency or your government, to make the case, to your leadership, your legislative and executive leadership, why your project should be funded using these dollars. And the sooner you do that, and the more you know about exactly how the funding works, how much there is and what it can be used for, and you can show that to your leadership, the more likely you are to get that money. Because your leadership knows you’ve got a project ready, he knows what the value, what value is, he or she knows what value it’s going to bring. They know that’s going to set them up for success in the future. It’s going to make them more secure, things like that. So really emphasizing that to your leadership, is the best way to make sure you get a piece of this money.
Alyssa Dinberg 18:01
That makes sense. So this is one of the questions that I have. What can the funding be used for? And what can it not be used for?
Ryan Gallant 18:15
I think I mentioned it earlier, it’s really quite broad. On the whole, it’s both, it’s meant to be used to respond to the coronavirus pandemic, and prepare for the future. Use cases for that are going to be shoring up public health agencies, PPE, testing supplies, testing equipment, supplies and furniture and whatever schools need to reopen, government buildings needs to reopen, could also be used for technology such as cybersecurity, you need to secure your remote workers, secure your distance learners, improving healthcare, improving government services, digitizing them, digitizing your records. All sorts of use cases, the only things that really cannot be used for are to find a tax, a new tax break, or to delay a new tax increase. So if a government was planning on raising taxes, this money cannot be used, instead of that to keep the tax rate the same. And it’s pretty much the only thing it can’t be used for. Oh, it also cannot be used to fund a pension.
Alyssa Dinberg 19:36
Ryan Gallant 19:37
So, so if you have some sort of public retirement system for your teachers, your workers, your government employees, this money cannot go towards that pension.
Alyssa Dinberg 19:47
What about like mental health services? Because I know it’s not clearly outlined in the legislation about mental health but what’s your thoughts on that?
Ryan Gallant 20:00
So they’re there, there is a section on mental health in the bill, but it’s not in the local government section.
Alyssa Dinberg 20:10
Okay, that makes sense.
Ryan Gallant 20:10
It’s funding through, I think it’s SAMSA, I think, the Federal Agency for mental health funding through them,
Alyssa Dinberg 20:16
Ryan Gallant 20:18
Mental health care could very, very well be a use case for these funds. If you think of things like Telepractice, Telehealth, right, that saw an explosion during the pandemic, because people were able to easily access a doctor from anywhere in their state, you know, usually in your same state, from the comfort of their own home, you don’t have to go to the waiting room, you’re not filling out paperwork. So in the bill, there’s actually some competitive grants from USDA to help support telehealth services and systems to help find citizens who may be in need of mental health for social services, a new website, a landing page, some sort of program to provide resources for your citizens who may be going through some sort of mental health crises or any sort of social crises. So it’s really broad, and it’s how creative can you get? And then you also have to remember how fundamental IT is to everything. It is not its own bucket anymore. It’s everything, it enables all of the services government provides. And it enables a lot of the interactions citizens have with government. So IT is everything. You just got to make sure you’re framing it, your project in the right way, so that your leadership sees why IT is a critical part of this.
Alyssa Dinberg 21:53
Yeah. Okay. All right. Yeah, I was just wondering about mental health, because I know that that’s a big need in the community that I work for. So it’s great to hear that we’ll be able to use some of those dollars for it. So what’s the difference between formula and competitive funding? And how does this relate to ARPA?
Ryan Gallant 22:15
So that’s a good question based on what we were just talking about. So the the direct aid to state governments, local governments, and education is a formula grant. That means it’s based on a mathematical formula on population, and the money is just distributed that way. There’s no discretion. The governor doesn’t get to decide this county gets this, this county gets this right. A competitive grant would be like the USDA grants for Telehealth that we were just talking about, there’s about 500 million of that in ARPA, those are grants you have to compete for you’re not guaranteed them, you’re not guaranteed any allocation whatsoever, you have to apply. And they’re allocated based on the rules and provisions of that program. So it’s important to understand that you don’t actually have to do anything to get your direct aid that’s going to come no matter what. But there are some smaller funding streams in the bill that you do need to go out and actually get.
Alyssa Dinberg 23:14
Okay, that makes sense. Today’s Gov Love episode is brought to by Granicus. Short term rentals or STRs are found on sites like Airbnb and VRBO, their numbers are growing at a staggering rate and 1000s of communities across North America. What does this mean for government? It’s time to act. STRs can be a tremendous source of revenue for local governments or a real community nuisance. It all depends on adopting the right Compliance and Enforcement strategy. To date, over 350 communities have partnered with Granicus on their STR compliance programs for everything from address and host identification to ordinance consulting and permitting tools. Interested in learning more about the STR market in your community and how Granicus can help?Visit granicus.com to schedule a free consultation. That’s granicus.com for more information. Okay, my next question, it’s kind of a two parter. With CARES, it was a reimbursement program versus money that was given up front. And it’s my understanding that with ARPA, they’re gonna give us money upfront, is that correct?
Ryan Gallant 24:28
Yes, correct. If the money hasn’t already been distributed, it should be very, very soon. They were aiming to do it within 90 days, I believe. And then the money should be distributed in two pumps, two tranches, two places. And but there’s no deadline to use the first section, the first chunk of money before the second chunk of money. There’s only one final deadline on the money at the very end, so there’s no you don’t need to worry about using all of your first allocation before your second allocation, there’s no deadlines in the middle.
Alyssa Dinberg 25:04
Okay. And so just a basic dumb question. How is that money going to be deposited into local government accounts?
Ryan Gallant 25:15
Sure. Sure. So some jurisdictions will get it directly from the feds, and then some will get it through their state agencies, from the state.
Alyssa Dinberg 25:28
Okay. Gotcha. Okay. And so you said that you don’t have to spend the first amount to get the second amount. When, okay, this is another two part question. When are we anticipating getting the second amount? And is there any risk at not getting the second amount if we are not spending the first amount substantially by the time we get the second round?
Ryan Gallant 25:55
Right, so I’m going to be the gap, I think, is 60 days. But I’m not positive on, I would have to look that up. I remember reading it like, but there’s a gap, it’s 60 days or six months, there’s a six in there. Okay, to your second question, they do not need to worry about spending or not spending, the first allocation of the money before the second one arrives, it will not impact that in any way. It’s a formula. all jurisdictions will get the full amount they’ve been appropriated.
Alyssa Dinberg 26:27
Okay, even if leadership at the federal level changes, they can’t reverse this, correct?
Ryan Gallant 26:35
It would require another act of law there. And that would be very, very, very unusual to do some sort of retroactive appropriation. I can’t imagine that’s going to happen. The great thing about these packages, is they, relatively speaking, received pretty wide bipartisan support, compared to most issues in our country. So I don’t anticipate any major changes happening to the provisions in this bill, just despite what may happen to Congress or what might happen to the White House.
Alyssa Dinberg 27:08
Okay. Alright. So I think this is my last question. And this is a hypothetical question. If you were a city or county manager, and you were receiving a couple million dollars from ARPA, what would you do with it?
Ryan Gallant 27:23
The very first thing I would do is make sure I’m secure. I do not want to get a ransomware attack, I don’t want to get a malicious actor coming in hacking my system. I don’t want to have to deal with cyber insurance that may or may not pay out, or may or may not qualify for a claim. I’d rather be secure and not risk giving up my data, my citizen’s data, our government’s data, and cybersecurity is not going away, it’s only going to become more and more important. And this is really an opportunity to catch up. A lot of local governments, understandably, have not had the resources to be fully secure. This is an amazing opportunity to do that. Secondly, I would probably digitize some of my paper and in person services. I was at the doctor today. And I filled out like 17 pages. And in my head, I’m thinking it’s 2021, I could do this on my phone or at a computer. And that’s what your citizens are thinking to. They’re thinking it’s 2021. Why am I going into this office to fill out this paper?
Alyssa Dinberg 28:40
So I have a question around that, actually. So say the city manager, you’re the city manager, you decide to digitize everything. Can you also use ARPA money to help train your staff on how to use that new process? Because I know that that’s a hurdle that a lot of governments are facing.
Ryan Gallant 29:01
My, my, my answer would probably be yes. with the caveat that you would need to go into the bill for any specifics. Another thing, every city or county or jurisdiction may have an auditor who determines or interprets the regulations a bit differently. That’s totally possible. And that’s the role of an auditor, the role of the auditor is to protect the government money. So you just need to make sure to avoid that kind of situation. Just make sure it’s worked out beforehand. And your budget is clear. You know, what the money is going to be used for how much and then you can get the project pre-approved by your PMO, your PMO or your auditor, whoever it might be.
Alyssa Dinberg 29:53
Okay, cool. Is there anything else you do with the money?
Ryan Gallant 29:59
I mean, VR in school, no, broadband, there’s other sections of the bill specific to broadband. But a lot of rural communities especially, this is a great opportunity to take advantage of the money and take advantage some of the E-Rate and universal connectivity funding in the bill as well. Upgrade your infrastructure, your broadband infrastructure, create, the benefits are innumerable. You’ll create better learning opportunities for your communities, students, better working opportunities for your communities residents. Better broadband means a business is going to be more likely to come in and create jobs in your community. You you look at some of the cool things cities are doing. We’ve got connected vehicles, connected transportation systems, these things are only going to accelerate. And broadband is really the backbone upon which all of this is built. So a strong broadband infrastructure is really setting your your, your jurisdiction or your community up for the future.
Alyssa Dinberg 31:04
Great. Is there anything else that you think our listeners need to know at this point in the game with ARPA money?
Ryan Gallant 31:13
My best advice is to be careful what you see out there. I feel a lot of information that gets thrown around and a lot of terms that are kind of confuddled a bit. Don’t overcomplicate the situation, I tell my clients to remember this, the direct aid, respond to COVID, broad. What does that mean? It means whatever you say it means when you can convince your leadership it means.
Alyssa Dinberg 31:49
That’s really good advice. All right. Well, I have one last question. And that would be if you could be the Gov Love DJ for today’s episode, what would you, what what song would you pick as our exit music?
Ryan Gallant 32:06
Alyssa Dinberg 32:08
Ryan Gallant 32:08
I get, I’ve been listening to a band called the loved ones a lot today. And their song 100k has been on repeat for me. So that’s what song that would be.
Alyssa Dinberg 32:21
All right. I don’t know that song. But I’m gonna go listen to it. Alright. Well, thank you so much for joining this episode. I really appreciate it. I learned a lot. I know our listeners. will. You explain everything in a really easy way to understand and so I really appreciate that this this topic can be pretty confusing. So thank you again. I really appreciate it.
Ryan Gallant 32:45
Thank you for having me.
Alyssa Dinberg 32:46
Yeah, no problem. Gov Love is produced by a rotating cast of amazing ELGL volunteers. ELGL is the Engaging Local Government Leaders network. You can reach us at ELGL.org/GovLove or on twitter at @GovLovePodcast. Thanks for listening. This has been Gov Love, a podcast about local government.