4. Allocation of American Rescue Plan Act Funds-outline12/31/2021
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Allocation of American Rescue Plan Act Funds
Presented Wednesday, January 5, 2022
Summary
•Brief on the Passage of the ARPA and what it includes…
•Timing of Receipt of Funds
•Eligible Uses of Funds…
•Available Options for Use
•Recommendation
American Rescue Plan Act of 2021
•Passed March 11, 2021
•It was $1.9 Trillion recovery package, includes:
▫Child Tax Credit Program
▫Homeowner’s Assistance Program
▫Emergency Retail Assistance
▫Funding for Small Business Credit Expansion
▫Expansion of Unemployment Benefits
▫Employee Retention Credit and Paid Leave Credit Programs
▫Capital Projects Fund
▫State & Local Fiscal Recovery Fund –CITY RECIPIENT
▫
Receipt & Timing of Funds
•The City will be receiving $441,892.
•We have only received the first settlement, $220,946 in the 3rd quarter of last year.
•The next half will be distributed after May 10, 2022, through the State of Minnesota
Office of Budget and Finance.
•
Eligible Expense Summary
The Coronavirus State and Local Fiscal Recovery Funds under the ARPA is intended to
provide “a substantial infusion of resources to meet pandemic response needs and
rebuild a stronger, and more equitable economy as the country recovers. The US
Treasury notes the following key areas of funding eligibility:
•Support public health expenditures, by, for example, funding COVID-19 mitigation
efforts, medical expenses, behavioral healthcare, and certain public health and safety
staff.
•Address negative economic impacts caused by the public health emergency,
including economic harms to workers, households, small businesses, impacted
industries, and the public sector.
•Replace lost public sector revenue, using this funding to provide government
services to the extent of the reduction in revenue experienced due to the pandemic.
Provide premium pay for essential workers, offering additional support to those who
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services to the extent of the reduction in revenue experienced due to the pandemic.
•Provide premium pay for essential workers, offering additional support to those who
have and will bear the greatest health risks because of their service in critical
infrastructure sectors.
•Invest in water, sewer, and broadband infrastructure, making necessary investments
to improve access to clean drinking water, support vital wastewater and stormwater
infrastructure, and to expand access to broadband internet
Responding to the public health emergency
Expenses may include:
•Vaccination and testing programs
•Purchase of PPE and materials need for EMS response.
▫(Not needed at this time.)
•Support for congregate living facilities such as group living and homeless shelters.
•Pandemic public health response for prevention, mitigation, and enforcement.
•Capital investments in public facilities to meet pandemic operational needs are also
eligible, such as improvements to public buildings to implement COVID-19
mitigation tactics.
Responding to the negative economic impacts of the pandemic
•assistance to households, includes but is not limited to:
▫food assistance; rent, mortgage, or utility assistance; counseling and legal aid to
prevent eviction or homelessness; cash assistance; emergency assistance for
burials, home repairs, weatherization, or other needs; internet access or digital
literacy assistance; or job training to address negative economic or public health
impacts experienced due to a worker’s occupation or level of training.
•aid to impacted industries
Responding to the negative economic impacts of the pandemic (Continued)
•Assistance to small businesses and non-profits; includes but is not limited to:
▫Example -Loans or grants to mitigate financial hardships due to business closures
like payroll support, employee retention loans rent, and other operating costs.
▫Loans, grants, or in-kind assistance to implement COVID-19 prevention or
mitigation tactics such as funding changes for social distancing, funding
vaccination, testing or contact tracing.
▫Technical assistance, counseling, or other services to assist with business planning
needs
▫
•
Premium pay for essential workers
•An amount up to $13 per hour that is paid to an eligible worker in addition to wages
the worker otherwise received, for all work performed by the eligible worker during
the COVID-19 public health emergency. Such amount may not exceed $25,000 per
eligible worker.
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the COVID-19 public health emergency. Such amount may not exceed $25,000 per
eligible worker.
•Essential workers are those in critical infrastructure sectors who regularly perform in-
person work, interact with others at work, or physically handle items handled by
others. Low-income workers are the intended focus.
•Critical infrastructure sectors include healthcare, education and childcare,
transportation, sanitation, grocery and food production, and public health and
safety, among others, as provided in the Treasury guidance. Governments receiving
Fiscal Recovery Funds have the discretion to add additional sectors to this list, so
long as the sectors are considered critical to protect the health and well-being of
residents.
•
Revenue replacement
•This provision is intended to help local governments that have experienced revenue
shortfalls on an entity wide-basis during the pandemic relative to previous years
revenues.
▫Examples uncollected taxes and uncollected permit revenue.
▫It excludes refunds and other correcting transactions, proceeds from issuance of
debt or the sale of investments, agency or private trust transactions, and revenue
generated by utilities and insurance trusts. General revenue also includes
intergovernmental transfers between state and local governments, but excludes
intergovernmental transfers from the Federal government
Investments in water and sewer
•Under the Environmental Protection Agency’s Clean Water State Revolving Fund
(CWSRF), categories of eligible projects include: construction of publicly owned
treatment works, nonpoint source pollution management, national estuary program
projects, decentralized wastewater treatment systems, stormwater systems, water
conservation, efficiency, and reuse measures, watershed pilot projects, energy
efficiency measures for publicly-owned treatment works, water reuse projects,
security measures at publicly-owned treatment works, and technical assistance
•Costs for construction on eligible water and sewer infrastructure projects must be
obligated by Dec. 31, 2024. The period of performance will run until Dec. 31, 2026,
which will provide recipients a reasonable amount of time to complete projects
funded with Fiscal Recovery Funds.
•
Investments in Broadband
•Broadband improvements require minimum speeds of 100 Mbps download and 100
Mbps upload. In cases where it is impracticable due to geography, topography, or
financial cost to meet those standards, projects must reliably deliver at least 100
Mbps download speed, at least 20 Mbps upload speed, and be scalable to a
minimum of 100 Mbps download speed and 100 Mbps upload speed. Must be
designed to serve unserved or underserved households and businesses.
•broadband infrastructure projects must be obligated by Dec. 31, 2024. The period of
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designed to serve unserved or underserved households and businesses.
•broadband infrastructure projects must be obligated by Dec. 31, 2024. The period of
performance will run until Dec. 31, 2026, which will provide recipients a reasonable
amount of time to complete projects funded with Fiscal Recovery Funds.
•May be subject to fund overlap restrictions with existing federally funded projects
offered through RDOF or the state’s Border-to-Border Broadband Grant, which has
been funded with ARPA funds.
Prohibited Uses of Funds
•Funds cannot be used to directly or indirectly offset tax reductions or delay a tax/tax
increase, nor can funds be deposited into any pension fund.
•Approved projects must meet the criteria set by US Treasury, and when applicable
the EPA.
•Funds spent must be appropriately tracked and should be charged to the ARPA’s
independent fund to help ease reporting administration.
Challenges
•Some of the eligible uses either are not applicable.
•Some options require staffing or services currently not offered by the City. To see
any of these alternatives would require securing a 3rd party to perform the service.
•Caution to be duplicative of County programming. Washington County has received
$50,975,893 in comparison to the City’s $442k.
Most Reasonable Uses of Funds Include
•Financial Assistance to supplement costs for state mandated nitrate treatment at the
Bliss WWTP for the City’s Big Marine Sewer Utility.
•Broadband expansion projects for underserved and unserved areas defined as those
that are not currently served by a wireline connection that reliably delivers at least
25 Mbps download speed and 3 Mbps of upload speed.
•Washington County has established both residential and business relief programs.
When the Cares Act provided funding last time, the County’s allocation more than
covered the demands for assistance. Its likely that their programming will also be
more effective given the significantly larger pool of funds made available to them. It
is also establishing a $2 mil broadband grant program.
Next Steps
•Consider adopting a resolution clarifying what project or projects ARPA Funds
should be appropriated with findings that support spending eligibility. Projects
must be reasonably anticipated to be obligated, meaning under contractual
commitment to complete prior to the year end of 2024.
•Funds that are not obligated or used by the above mentioned deadline, must be
returned.
•Funds must be declared or appropriate to eligible projects by Year End 2024.
•
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