State warns Exeter council that $800,000 ARPA grant can reimburse purchase only if building is used as a community learning center

Exeter — State pandemic recovery officials told the town council on Nov. 5 that a roughly $800,000 capital projects grant for community learning centers can be used to reimburse the town for the purchase of a building only if the property is clearly designated and used as a community learning center, with required programming for five years and documentation of an arms‑length procurement.

"Acquisition is an allowable use," Paul Dionne, director of the state's pandemic recovery office, said as he outlined grant conditions. "If you were to use that to — and declare that building to be the Exeter Community Learning Center, and you provide us with the bill of sale indicating that you paid, we provided you the grant money, that would be the end of the state's claim on those funds." Dionne added that the program requires programming tied to education, work and health monitoring to be maintained for five years.

The exchange with the council centered on a building the town previously purchased after a 2023 financial town meeting resolution that authorized buying a parcel to relocate town government operations. Several council members and the town solicitor noted a potential conflict between the voters' prior direction — to acquire a new town hall — and the federal grant's requirement that the capital asset be used as a "community learning center." Council members raised whether an additional financial town meeting or other formal steps would be necessary to change the building's intended use.

"You would be noncompliant with U.S. Treasury requirements," Dionne said when asked about the consequences of failing to meet the program's purpose. He emphasized that noncompliance could mean the grant is revoked and the town might have to repay funds.

Town officials pressed the state on how strict the square‑footage test is. Dionne said the Treasury ties reimbursement to how much of the building's square footage is dedicated to the learning‑center functions: "It's gonna be based on square footage. So how much of the square footage is dedicated to the community learning center versus another use — and that's what's going to dictate whether it's going to be compliant," he said. He added that the state looks for an arms‑length acquisition and competitive procurement documentation where applicable.

The town solicitor asked whether a separate financial town meeting would be required to change the purpose set by the 2023 vote; he said he would prepare an opinion for the council. Multiple council members urged caution, citing the grant deadline to obligate funds and the risk of losing the award if the town moves hastily. One council member described the choice as a "tool in the toolbox" but warned it could raise political and legal friction if done without clear voter direction.

Council leaders ultimately decided not to adopt a formal resolution on the grant at the meeting and instead moved the question — including a related motion to rescind a prior acceptance of the multipurpose community facilities grant — to next month's meeting to allow the solicitor to provide a written opinion and to gather procurement documentation. The council also discussed the possibility of recouping local ARPA money if the town were reimbursed by the state.

If the council pursues the reimbursement route, staff would need to provide the state with the bill of sale, the subaward agreement terms, and evidence that the project's programming and procurement meet federal and state requirements. The state added that programming funds (operations, staffing) are not allowable expenses under the capital projects grant; the grant covers acquisition, new construction or renovation of a capital asset only.

The council asked the solicitor to review whether the June 2023 financial town meeting resolution could be amended, whether a new financial town meeting would be required, and what documentation would be sufficient to show an arms‑length transaction. The matter is expected to return to the council next month for further action.

What happens next: The council postponed reconsideration of the prior vote and asked the solicitor to draft a formal opinion on whether the town can change the property's designated purpose and how to document compliance. The state official advised early coordination between town counsel and the state's legal team and warned that Treasury rules provide little room for extensions or waivers.

(Reporting in this article is based on the council meeting transcript and direct remarks by Paul Dionne and Sagri Sharma of the state's pandemic recovery office.)