Among nearly $2 trillion in economic stimulus, the American Rescue Plan Act included more than $130 billion in direct, flexible aid to local governments. This once-in-a-generation influx of dollars provides a unique opportunity for local governments to address revenue shortfalls caused by the COVID-19 pandemic and strategically invest in the future. ICMA has curated a list of resources to help local governments understand and make use of American Rescue Plan support.
Have a specific question about American Rescue Plan Act implementation? Jump to the Department of Treasury's guidance on frequently asked questions below.
ICMA Events and Commentary
- American Rescue Plan Fact Sheet: A Generational Opportunity (6/22)
- Budgeting for Big Swings: Resource Optimization and The American Rescue Plan (6/29 webinar)
- Relief for Small Cities: Accessing American Rescue Plan Funds for Non-Entitlement Local Governments (6/4 webinar)
- Relief Has Arrived: The Latest Guidance on Using Recovery Funds from the American Rescue Plan (5/17 webinar)
- Treasury Releases Guidance on American Rescue Plan and Opens Portal
- Treasury Updates Pre-Award Rescue Plan Requirements
- To the Rescue: How the American Rescue Plan Act of 2021 Can Help Your Locality Recover & Rebuild (3/24 webinar)
Local Fiscal Recovery Fund Resources
- Department of Treasury ARP Local Fiscal Recovery Funds information portal
- Coronavirus State and Local Fiscal Recovery Funds Frequently Asked Questions (Department of Treasury)
- Frequently Asked Questions on Distribution of Fiscal Recovery Funds to Non-entitlement Units of Local Government (Department of Treasury)
- Revenue Replacement Calculator (Government Finance Officers Association membership required to access)
- Frequently Asked Questions on Certification, Eligible Uses, and Reporting Requirements (Government Finance Officers Association)
- Local Fiscal Recovery Funds Frequently Asked Questions (National League of Cities, primarily oriented to municipalities)
Additional Rescue Plan Funding Opportunities
- National League of Cities summary of American Rescue Plan Act provisions
- Summary of state and local funding sources by Nowak Lab at Drexel University (link to Excel spreadsheet)
- Emergency Rental Assistance Frequently Asked Questions
Additional COVID-19 Relief & Recovery Resources
- HOW LOCAL GOVERNMENTS HAVE USED FEDERAL FUNDING
How Funding From the CARES ACT Helps Those in Greatest Need
- Adams County, Colorado, provides funds to school districts, fire districts, and public health and response and recovery needs.
- Clear Creek County, Colorado, provides a lifeline to businesses and individuals in dire need.
- Dubuque, Iowa, provides assistance for food, rent, mortgage and utilities.
- Mankato, Minnesota's partnership to support virtual school.
- Montgomery County, Maryland's COVID Corps Youth help their community.
- Local Governments Help Small Businesses Reopen
- FEMA RELIEF & COST TRACKING
These documents will help your local government track costs related to the coronavirus crisis or other federally declared disasters.
FEMA's resource roadmaps included resources provided under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, Consolidated Appropriations Act and American Rescue Plan Act. The roadmaps:
- Outline potential solutions and applicable resources, including federal funding support and technical assistance.
- Describe how to use CARES Act and other federal programs to help solve recovery challenges, avoid potential duplication of benefits, and reimburse associated costs.
- Inform decisions on how to apply funding to maximize local recovery outcomes.
- ICMA ADVOCACY
ICMA has advocated at the federal level on behalf of local governments throughout the COVID-19 pandemic, including pushing for direct, flexible funding.
Answers to the Most Common ARPA Questions
The U.S. Department of Treasury continues to update its Frequently Asked Questions for Coronavirus State and Local Fiscal Recovery Funds (CSLFRF), clarifying a number of questions for cities and counties.
Highlighted below are a few of the most significant updates:
- May recipients use Funds for road repairs and upgrades that occur in connection with an eligible water or sewer project?
Yes, recipients may use State and Local Fiscal Recovery Funds for road repairs and upgrades directly related to an eligible water or sewer project. For example, a recipient could use Funds to repair or re-pave a road following eligible sewer repair work beneath it. However, use of Funds for general infrastructure projects is subject to the limitations described in FAQ 4.2. Water and sewer infrastructure projects are often a single component of a broader transportation infrastructure project, for example, the implementation of stormwater infrastructure to meet Clean Water Act established water quality standards. In this example, the components of the infrastructure project that interact directly with the stormwater infrastructure project may be funded by Fiscal Recovery Funds.
- May State and Local Fiscal Recovery Funds be used to support energy or electrification infrastructure that would be used to power new water treatment plants and wastewater systems?
The EPA’s Overview of Clean Water State Revolving Fund Eligibilities describes eligible energy-related projects. This includes a “[p]ro rata share of capital costs of offsite clean energy facilities that provide power to a treatment works.” Thus, State and Local Fiscal Recovery Funds may be used to finance the generation and delivery of clean power to a wastewater system or a water treatment plant on a pro-rata basis. If the wastewater system or water treatment plant is the sole user of the clean energy, the full cost would be considered an eligible use of funds. If the clean energy provider provides power to other entities, only the proportionate share used by the water treatment plant or wastewater system would be an eligible use of State and Local Fiscal Recovery Funds.
- How should states and local governments assess whether a stormwater management project, such as a culvert replacement, is an eligible project for State and Local Fiscal Recovery Funds?
FAQ 6.7 describes the overall approach that recipients may take to evaluate the eligibility of water or sewer projects. For stormwater management projects specifically, as noted in the EPA’s Overview of Clean Water State Revolving Fund Eligibilities, “Stormwater projects must have a water quality benefit.” Thus, to be eligible under CSFRF/CLFRF, stormwater management projects should be designed to incorporate water quality benefits consistent with the goals of the Clean Water Act. Summary of the Clean Water Act.
- May Funds be used to build or upgrade broadband connections to schools or libraries?
As outlined in the IFR, recipients may use Fiscal Recovery Funds to invest in broadband infrastructure that, wherever it is practicable to do so, is designed to deliver service that reliably meets or exceeds symmetrical upload and download speeds of 100 Mbps to households or businesses that are not currently serviced by a wireline connection that reliably delivers at least 25 Mbps download speed and 3 Mbps of upload speed. Treasury interprets “businesses” in this context broadly to include non-residential users of broadband, including private businesses and institutions that serve the public, such as schools, libraries, healthcare facilities, and public safety organizations.
- May recipients pool funds for regional projects?
Yes, provided that the project is itself an eligible use of funds and that recipients can track the use of funds in line with the reporting and compliance requirements of the CSFRF/CLFRF. In general, when pooling funds for regional projects, recipients may expend funds directly on the project or transfer funds to another government that is undertaking the project on behalf of multiple recipients. To the extent recipients undertake regional projects via transfer to another government, recipients would need to comply with the rules on transfers specified in the Interim Final Rule, Section V. A recipient may transfer funds to a government outside its boundaries (e.g., county transfers to a neighboring county), provided that the recipient can document that its jurisdiction receives a benefit proportionate to the amount contributed.
- May Coronavirus State and Local Fiscal Recovery Funds be used to make loans or other extensions of credit (“loans”), including loans to small businesses and loans to finance necessary investments in water, sewer, and broadband infrastructure?
Yes. Coronavirus State and Local Fiscal Recovery Funds (“Funds”) may be used to make loans, provided that the loan is an eligible use and the cost of the loan is tracked and reported in accordance with the points below. See 31 CFR 35.6. For example, a recipient may use Coronavirus State and Local Fiscal Recovery Funds to make loans to small businesses. See 31 CFR 35.6(b)(6). In addition, a recipient may use Funds to finance a necessary investment in water, sewer or broadband, as described in the Interim Final Rule. See 31 CFR 35.6(e). Funds must be used to cover “costs incurred” by the recipient between March 3, 2021, and December 31, 2024, and Funds must be expended by December 31, 2026. See Section III.D of the Interim Final Rule; 31 CFR 35.5. Accordingly, recipients must be able to determine the amount of Funds used to make a loan.(See Treasury's FAQ for more details relative to length of loans.)
- May recipients use funds to cover the costs of consultants to assist with managing and administering the funds?
Yes. Recipients may use funds for administering the CSFRF/CLFRF program, including costs of consultants to support effective management and oversight, including consultation for ensuring compliance with legal, regulatory, and other requirements.
Note: If considering assigning these responsibilities to new staff, eligible use of funds include “payroll, covered benefits, and other costs associated with rehiring public sector staff, up to the pre-pandemic-staffing level of the government.” (p. 10, Interim Final Rule)
- For broadband infrastructure to provide service to “unserved or underserved households or businesses,” must every house or business in the service area be unserved or underserved?
No. It suffices that an objective of the project is to provide service to unserved or underserved households or businesses. Doing so may involve a holistic approach that provides service to a wider area in order, for example, to make the ongoing service of unserved or underserved households or businesses within the service area economical. Unserved or underserved households or businesses need not be the only households or businesses in the service area receiving funds.
- May recipients use payments from the Funds for “middle mile” broadband projects?
Yes. Under the Interim Final Rule, recipients may use payments from the Funds for “middle-mile projects,” but Treasury encourages recipients to focus on projects that will achieve last-mile connections—whether by focusing on funding last-mile projects or by ensuring that funded middle-mile projects have potential or partnered last-mile networks that could or would leverage the middle-mile network.
- How do I know if a water, sewer, or broadband project is an eligible use of funds? Do I need pre-approval?
Recipients do not need approval from Treasury to determine whether an investment in a water, sewer, or broadband project is eligible under CSFRF/CLFRF. Each recipient should review the Interim Final Rule (IFR), along with the preamble to the Interim Final Rule, in order to make its own assessment of whether its intended project meets the eligibility criteria in the IFR. A recipient that makes its own determination that a project meets the eligibility criteria as outlined in the IFR may pursue the project as a CSFRF/CLFRF project without pre-approval from Treasury. Local government recipients similarly do not need state approval to determine that a project is eligible under CSFRF/CLFRF. However, recipients should be cognizant of other federal or state laws or regulations that may apply to construction projects independent of CSFRF/CLFRF funding conditions and that may require pre-approval. For water and sewer projects, the IFR refers to the EPA Drinking Water and Clean Water State Revolving Funds (SRFs) for the categories of projects and activities that are eligible for funding. Recipients should look at the relevant federal statutes, regulations, and guidance issued by the EPA to determine whether a water or sewer project is eligible. Of note, the IFR does not incorporate any other requirements contained in the federal statutes governing the SRFs or any conditions or requirements that individual states may place on their use of SRFs.
Note: Earlier FAQs (6.5 and 6.6) addressed other eligible broadband activities, including digital literacy training and programs to promote Internet access.
- Where can I find compliance and reporting responsibilities for the Coronavirus State and Local Fiscal Recovery Funds?
Treasury launched a new page on compliance and reporting responsibilities for the Coronavirus State and Local Fiscal Recovery Funds, along with guiding principles and information on how to submit reports. Check the CSLFRF site regularly for ongoing updates to Treasury’s guidance. The FAQ link remains constant even as new guidance is added. Treasury also provides guidance and information on funds for Non-entitlement Units, including cities with a population under 50,000.
General questions about State and Local Fiscal Recovery Funds can be emailed to Treasury at SLFRP@treasury.gov, though local governments should not typically expect to receive “pre-approval” of specific requests. If you have identified a specific issue or concern relative to the Interim Final Rule language, you are encouraged to submit comments for Treasury’s consideration through the Federal Register here, where you can also view the public comments already submitted.
- Can funds be used to improve parks and other outdoor places as a response to the public health emergency and/or its negative economic impacts?
There are multiple ways that investments in improving outdoor spaces could qualify as eligible uses; several are highlighted below, though there may be other ways that a specific investment in outdoor spaces would meet eligible use criteria.
First, in recognition of the disproportionate negative economic impacts on certain communities and populations, the Interim Final Rule identifies certain types of services that are eligible uses when provided in a Qualified Census Tract (QCT), to families and individuals living in QCTs, or when these services are provided by Tribal governments. Recipients may also provide these services to other populations, households, or geographic areas disproportionately impacted by the pandemic. AS OF JUNE 24, 2021 11 These programs and services include services designed to build stronger neighborhoods and communities and to address health disparities and the social determinants of health. The Interim Final Rule provides a non-exhaustive list of eligible services to respond to the needs of communities disproportionately impacted by the pandemic, and recipients may identify other uses of funds that do so, consistent with the Rule’s framework. For example, investments in parks, public plazas, and other public outdoor recreation spaces may be responsive to the needs of disproportionately impacted communities by promoting healthier living environments and outdoor recreation and socialization to mitigate the spread of COVID-19.
Second, recipients may provide assistance to small businesses in all communities. Assistance to small businesses could include support to enhance outdoor spaces for COVID-19 mitigation (e.g., restaurant patios) or to improve the built environment of the neighborhood (e.g., façade improvements).
Third, many governments saw significantly increased use of parks during the pandemic that resulted in damage or increased maintenance needs. The Interim Final Rule recognizes that “decrease[s to] a state or local government’s ability to effectively administer services” can constitute a negative economic impact of the pandemic. (p.11, Interim Final Rule)
ICMA is here to support our members and their local governments in implementing American Rescue Plan provisions.
ARPA Engagement Package Available for ICMA Members at a Discounted Rate
ICMA is working with our partner, National Research Center at Polco, to provide ICMA members with their new ARPA Engagement Package around Treasury guidelines. Treasury urges “local governments to engage their constituents and communities in developing plans to use these payments.”
The ARPA Engagement Package helps you assess community needs, align funds with economic priorities, and fulfill requirements for documentation. You will get citable data from high-quality surveys, online dashboards of results, and benchmark measures - all on one award-winning engagement platform.
ICMA members qualify for a 20 percent off discount of the ARPA Engagement Package (list price for the package is $15,500 per year).