Cities Make Transformative Changes with ARPA Funds

December 2, 2021

The American Rescue Plan Act Coronavirus Local Fiscal Recovery Fund will deliver nearly $1.4 billion in funds directly to all cities in Georgia. This is the first time that every jurisdiction in the country, regardless of population size, has received a direct federal formula grant.

ARPA was signed into law in March, and the U.S. Department of Treasury, responsible for developing guidelines for the program, has issued Interim Final Rules for how funds may be used as well as interim reporting guidance. All cities in Georgia have had the opportunity to receive their first round of ARPA funding, including all metropolitan cities (generally, those over 50,000 population) and Non-entitlement Units of Government, or NEUs (those under 50,000 population).

Now that funds are in the bank, many cities are continuing the process of assessing how to put these funds to work in their communities to address needs related to the public heath and negative economic impacts of the pandemic, including needs for shoring up local government operations, supporting households and businesses, and assisting disproportionately impacted populations in the city.

Cities are thinking big and looking for ways to make transformative change in their communities with this one-time influx of federal funds.

While final rules have not yet been released, Treasury is encouraging cities to begin using their ARPA funds and to rely on the interim guidance and reporting information. This flexible funding program allows cities to meet a variety of needs – cities also have until the end of 2026 to spend funds. The interim final rules provide sufficient guidance for cities to proceed in using relief funds for urgent needs, including pandemic response efforts such as COVID-19 vaccine programs; premium pay for essential workers; revenue recovery; water, sewer, stormwater and broadband infrastructure; and supporting immediate needs of households and businesses in qualified census tracts.

A number of cities around the state including Camilla, Chattahoochee Hills, Powder Springs and Waycross have implemented ARPA-funded vaccine incentive programs for city employees. Athens-Clarke County used a portion of its ARPA funds for $100 gift cards per dose to newly vaccinated individuals who live, work or attend school in Athens-Clarke County. Many cities have approved premium pay for essential workers, including Augusta, Fitzgerald and Louisville. Peachtree Corners approved four grant programs to assist small businesses and nonprofits, covering operating, capital and emergency funding. Cedartown leaders approved the use of ARPA funds for a utility bill credit for city residents. Many cities are employing ARPA funds to address major infrastructure needs for water and sewer – including Duluth and Statesboro. Cities are thinking big and looking for ways to make transformative change in their communities with this one-time influx of federal funds.

What’s next?

Cities should continue to use the IFR and interim reporting guidelines to identify ways to use ARPA funds. All cities will be required to submit an annual Project and Expenditure Report in 2022 – Metro cities reports will be due Jan. 31, and NEU city reports will be due April 30. These reports cover grant fund spending between the award date and 30 days before the report deadline. Every city will be required to provide basic information including your DUNS and SAM number. NEU cities will be required to provide an electronic copy of their total operating budget. Full guidelines for items to include in the report will be available when the Treasury issues its final user guide in the coming weeks.

As your city develops plans for using ARPA funds, GMA recommends you develop a budget spreadsheet that includes how funds will be used, matching uses to one of the more than 60 eligible use categories identified in Appendix 1 of the Treasury’s Compliance and Reporting Guidance document and identifying how much ARPA funds will be used for each project. Keep in mind that ARPA SLFRF are intended to be used prospectively and the interim final rule precludes the use of these funds to cover the costs of debt incurred prior to March 3, 2021. Funds must be obligated by Dec. 31, 2024 and expended by Dec. 31, 2026.

If your city plans to expend more than $750,000 in federal grant funds, you will be subject to the single audit requirement. It’s a good idea to notify your auditor if this applies to your city. The second tranche of funding for cities will be made available during the spring of 2022 and you will not be required to reapply to receive these funds. Finally, please note that if your city plans to make subawards (e.g., to nonprofit organizations), the recipient is responsible for reporting on the use of these funds–not the subrecipient. The city will be responsible for reporting and insuring funds are used according to the law and guidelines.

GMA will be working with partner organizations including the Department of Community Affairs, Department of Audits, and the Georgia Association of Regional Commissions to develop templates for reporting, sample policies, and checklists to assist cities meet all reporting requirements. GMA and our partners will also provide training and technical assistance to ensure city officials have the information you need to succeed in using your ARPA funds. 

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