In R.I., mixed picture on stimulus impact

STIMULATING EFFECTS: Blount Boats employees Brian Laquerre, middle, and John Aguiar, foreground, add supports to hold up the deck of a boat. The company was approved for ARRA funding but must come up with a 25 percent match of $289,000. /
STIMULATING EFFECTS: Blount Boats employees Brian Laquerre, middle, and John Aguiar, foreground, add supports to hold up the deck of a boat. The company was approved for ARRA funding but must come up with a 25 percent match of $289,000. /

It’s been nearly a year since the $787 billion American Recovery and Reinvestment Act of 2009 (ARRA) was approved by Congress and Rhode Island started receiving its more than $1.25 billion share.
In part because of its sheer size, however, getting a handle on the ARRA’s effects on the Ocean State economy isn’t easy. While some affected businesses have clearly profited, others have seen limited benefits or been unable to meet eligibility requirements.
For Fred Sarmento, the federal stimulus money is just what Fleet Construction Co. needed to weather what could have been a fatally slow period.
Cumberland-based Fleet, where Sarmento is a project manager, was involved in two projects funded through the American Recovery and Reinvestment Act: the $1.1 million reconstruction of a runway at state-owned Newport Airport and a $2.43 million road-improvement project on Nate Whipple Highway in Cumberland.
In an ultra-competitive climate, the bids were kept extremely low.
“We didn’t make any money,” Sarmento acknowledged last week. “But we kept people busy.”
For Warren-based Blount Boats Inc., however, the federal stimulus experience has been somewhat frustrating. The 60-year-old shipyard was selected last year for a grant to purchase $1.16 million worth of equipment. The problem: Blount must kick in a 25 percent match – $289,000 – in order to get the grant.
“That’s a tall order for us in this environment,” said Marcia Blount, the company president. “Cash is tight.”
And so the government’s $868,000 share of the grant sits unused for now.
The federal government estimates the stimulus spending has created or saved more than 2,000 jobs in Rhode Island, a number based on statements from those receiving funding. Some state officials acknowledge that, in many cases, those were short-term positions that have since ended.
Meanwhile, the R.I. Office of Economic Recovery and Reinvestment – which is overseeing the state’s disbursements of ARRA – says the state has spent $551.25 million, or about 44 percent, of its $1.26 billion portion of the federal package as of Jan. 9.
The spending has ranged from $178.71 million for a medical-assistance program overseen by the R.I. Department of Human Services to $3.72 million for a Rhode Island Housing tax credit assistance program, and $4.3 million in grants awarded to local educational agencies serving poor children. And there might be more money coming the state’s way, in the form of competitive grants and potentially a new round of funding that’s been dubbed “Stimulus II.”
But noting the state’s (12.9 percent) unemployment rate, House Finance Committee Chairman Steven M. Costantino recently chided state officials for not getting the money from the first ARRA out on the street faster.
“There are a lot of zeros in there,” Costantino said at a House Finance meeting earlier this month when looking at expenditures in the state’s energy-efficiency programs.
Officials at the R.I. Office of Energy Resources told Costantino that it has taken time to develop a “blueprint” to distribute the more than $54 million in energy-related stimulus money.
For its part, the R.I. Department of Transportation said it has done better than many of its counterparts in other states in pushing forward with construction projects.
And it’s one area where the ARRA funding clearly has trickled down to the local private sector.
From its $137.91 million stimulus appropriation, the DOT said it had awarded 44 contracts worth $82.01 million as of December – $66.43 million of which went to Rhode Island-based businesses, according to DOT.
The DOT initially planned 54 “shovel-ready” transportation projects, but because bids came in much lower than expected, an additional eight projects have been added to the list.
“We’ve gotten a lot of work done,” said DOT spokesman Charles St. Martin. “And there is a spin-off effect, too – people buying supplies, buying materials, even buying lunches on the job. It’s good stuff.”
Also, some stimulus money has been handed directly from the federal government to local communities and other organizations.
Brown University, for instance, has pulled in about $27 million in stimulus grants for numerous research projects.
While the money awarded by the National Institutes for Health and the National Science Foundation won’t lead immediately to jobs – aside from a small number of research positions – Clyde L. Briant, Brown’s vice president for research, said the work could have far-reaching effects over time.
“We certainly hope that some of this research will lead to commercialization, which will, in turn, have a long-term impact on the economy,” he said. Meanwhile, Providence biotech company EpiVax Inc. received $215,016 from the U.S. Department of Health and Human Services to supplement research on an HIV vaccine. EpiVax’s grants coordinator Heather Johnson said some of the money will pay the salary of a full-time, post-doctorial associate.
For many companies, the stimulus package has done little to spur sales, even in areas where one might think it would help most.
While the engineering firm Louis Berger Group Inc. has been awarded some Army Corps of Engineers contracts through the stimulus package – including an environmental assessment at Naval Station Newport – Joe Pratt, corporate vice president at the firm’s Providence office, said the ARRA hasn’t been much help to his company.
“The money has gone to projects where [the engineering] has already been completed, and it’s been waiting on the shelf,” he said.
Blount Boats has found it difficult to take advantage, too.
When the U.S. Maritime Administration’s Assistance to Small Shipyards program received $98 million as part of the stimulus package, Blount applied for a grant to pay for a hydraulic shear, brake press, plate roller and other items.
Marcia Blount said it was a chance to modernize the shipyard, allowing it to run more efficiently and better compete for work. But it soon became clear that the company wouldn’t be able to afford the 25 percent match, at least not yet.
Blount said the company likely won’t use the grant until it is able to build its cash reserves.
Senesco Marine LLC, a barge builder in North Kingstown, has been able to capitalize on the same program, receiving $1.8 million for a transporter and four overhead cranes while putting in its own $600,000.
And at Fleet Construction, like at other construction companies, the stimulus package has been a welcome help in a sector that’s been hurting.
Sarmento said Fleet typically does large private jobs, such as clearing properties for subdivisions and retail centers.
“Those jobs are few and far between,” he said. “Ninety percent of the excavators in the state are parked right now.”
So Fleet bid for some of the ARRA projects.
“The choice was this: Either we send our employees home, or we put them to work,” Sarmento said. “I’d rather have them working.” •

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