City looks to homeless, housing crisis in possible ARPA funds use

Hot Springs received half of its $10.8 million in ARPA Funds* in May from the U.S. Department of the Treasury, and is considering multiple uses, two of which are helping remedy the homeless and housing crisis the city faces. However, before any decision is made in how the funds are used by mid-August the city plans to allow community members to weigh-in on how they think the funds should be used to address some of the city's most pressing needs caused by the COVID-19 pandemic.

Deputy City Manager Lance Spicer said the city is currently looking at "a lot" of different options to use the money, but one of the things that's slowing them down in actually utilizing it is they don't have the final guidance from the Treasury, which they expect to have by mid-August.

"We're looking at all the areas that we know are impacts that these ARPA funds can be used for, and to be honest with you, when you look at some of the initial guidance, it's much easier to say what it can't be used for than what it can." Spicer said. "So we're certainly looking at all different possibilities from housing assistance, homeless assistance, food insecurity. There's a whole host of uses that it can certainly be put towards."

"A great amount of responsibility comes with these funds," he added, "so I think it's going to be a tough decision, but I feel like we'll make the right one and put them towards those who need the help the most."

One thing Spicer specifically mentioned the funds could be used for was the construction of a homeless shelter**.

"(The homeless shelter) is one of the items that the city manager has brought up, and I think it would obviously take the board of director's approval, but at this point that does appear to be something that these funds can be used for from a public service standpoint," he said. "And that's definitely something that we would like to probably see the money go towards, but obviously we will see a lot of competing interest out there that we need to be real thoughtful about how we put these funds to use because they are one-time money funds. You don't really want to put them towards something that has a lot of operational expense to it.

Another thing mentioned by Spicer in reference to the use of the funds is a remedy for the local housing crisis.

"The housing stock the Hot Springs has, has somewhat aged, and there's not a tremendous amount of good quality homes, affordable homes for people that need them," he said. "And that's something that I think we'll have to address at some point because that is what a city is about is having good decent homes for people to live in because without people you don't have a city, so it's kind of a chicken and an egg type of dilemma you have there.

"I think you can use some of these funds towards retrofitting — I'll call it remodeling — homes, but they're specifically for low-to-moderate income, and then also to provide assistance to those who may be experiencing homelessness or need transitional housing."

When the city receives the second half of the funding next May, Spicer said they expect the focus of its utilization to stay the same***.

"As COVID showed us, a lot can happen in one year. ... Obviously as things change we can certainly reassess, but obviously you want to put the money towards things that are liable expenses, and also that have direct impacts because that's really what this money is meant to do," he said.

Regardless of what the money is used for now or later, community weigh-in will be of utmost importance.

"Once the treasury does give us those final rules we will open up a portal for the community to comment on online, but also of course we'll take written and phone comments as well," Spicer said.

"These are taxpayer funds that are being sent to ... Hot Springs, and I think they need to have a say, a voice, in what they believe the community needs to invest in."

"I think the main point that we want to drive home," Spicer said, "is these funds are something that the trust has been bestowed upon cities and counties and states across the country. They are more or less one-time injections of funds, so obviously we just want to be mindful of that and be good stewards of the money, so we're going to take probably a pretty cautious approach whenever we look towards projects we're putting them toward, uses and things of that nature."

*The American Rescue Plan Act that will deliver $350 billion for eligible state, local, territorial and Tribal governments to respond to the COVID-19 emergency and bring back jobs.

** Using the $439,471 HUD allocated to Community Development Block Grant funding for the 2021 fiscal year, the city plans to construct, rehabilitate or acquire a facility that will serve a dual purpose for the local homeless population. This has been in talks since early April.

***The city has until December 2026 to utilize the funds.