City Hall

City Hall is shown in 2019 off Rouse Avenue.

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The city of Bozeman is proposing to use federal funds from the recent COVID-19 relief bill in large part to replace lost revenue for water and sewer infrastructure projects, though some want the city to focus the money on direct support to people impacted by the pandemic.

The city was allocated $12 million from the $1.9 trillion American Rescue Plan, which it is permitted to use to replace revenue lost due to COVID-19, premium pay for essential workers, assistance to small businesses, households and hard-hit industries and economic recovery and investments in infrastructure for water, sewer or broadband.

The city is planning to use $912,051 to make up for revenue shortfalls, $364,069 for COVID-related expenditures, $100,000 for business recovery, $3.37 million for water infrastructure, $6.48 million for sewer infrastructure and $94,000 for broadband infrastructure.

The water and sewer projects are intended to open new land to development, city officials said.

It is the second pot of money the city received due to COVID-19 — it allocated millions of dollars from the CARES Act to a business assistance program and local nonprofits.

The allocations are included in the proposed budget, which the City Commission plans discuss and voted on at its Tuesday meeting.

At a City Commission meeting this week, Commissioner Christopher Coburn questioned why the city was not proposing to allocate more funds for direct support to people hit hard by the pandemic.

Coburn acknowledged that the money comes with some restrictions, but said he’d like to see the city shift some of the funds to focus on direct assistance programs.

“There’s a huge need in our community, and people are hurting, inequities are growing. And we have an opportunity here to really show where our priorities lie,” Coburn said.

City Manager Jeff Mihelich said funding a program to help people hit by the pandemic would pose challenges. The city would need to require that individuals prove that the hardship they experienced was directly tied to COVID-19, which Mihelich said in an interview was a “really high standard.”

Mihelich noted that the state and county were allocated funds that have different strings attached and could be used for health and human services issues or housing needs.

But there will be room for the city to work with the county and local nonprofits to apply for funds from the state, Mihelich said.

“There’s a way for our region and our residents to have their cake and eat it too,” Mihelich said in an interview. “We invest principally in infrastructure, and that unlocks undevelopable land and yields to affordable housing. That’s a win for everybody in the city if, on top of that, we as a region can secure some of those state grants, and the county makes the decision to invest in other areas as well, then we are as a region being really smart with our allocation of ARPA funds collectively.”

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Nora Shelly can be reached at nshelly@dailychronicle.com or 406-582-2607.

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