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The New and Improved ARPA

by David Anthony

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Yes, there are more than 437 pages in the final rule distributed by the US Treasury regarding the implementation of the American Recovery Plan Act. Municipalities have anxiously awaited this guidance, and in some ways, it generated more questions than it did answers. So where does that leave us?


The most significant change, from our perspective is the clarification regarding the use of ARPA funds to substitute for “lost revenue” due to the impact of COVID-19. The guidelines provide some much needed guidance in this area, which may be the most flexible area for municipalities to use ARPA funds. Even if your Township or Borough did not experience a “loss of revenue,” they can still choose to elect this option sometime in March. By doing so, this decision can avoid considerable reporting measure requirements that other avenues in the act will require. For example, suppose you want to put a new roof on the Township building, buy a plow truck, construct a playground, contribute to a senior living facility or pave the parking lot at the municipal building. Evaluating, documenting and plugging the whole for lost revenues may make these options a reality.


Here is an exact quote from the US Treasury’s overview of this particular portion of the ruling.


KEY CHANGES AND CLARIFICATIONS IN THE FINAL RULE The final rule delivers broader flexibility and greater simplicity in the program, responsive to feedback in the comment process. Among other clarifications and changes, the final rule provides the features below. Replacing Lost Public Sector Revenue The final rule offers a standard allowance for revenue loss of up to $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount – in many cases their full award – for government services, with streamlined reporting requirements. Public Health and Economic Impacts In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response. For example, recipients may build certain affordable housing, childcare facilities, schools, hospitals, and other projects consistent with final rule requirements.


ARPA funds can also be used, in some cases, for purposes of local matches for federal grants. The options that a municipality can take advantage of with this approach are nearly limitless, and those who are good at thinking outside of the box can genuinely make this money work for them in many ways and perhaps for many years.


Also remember that the money can gain interest while making your allocation decisions. As PSATS President David Sanko told us at the beginning of the process, "spend it wisely and don't be in a hurry." Very sagacious advice, because the Final Rule has seemed to provide tremendous flexibility to use the ARPA funds to help your community in so many different ways.


We encourage you to read the entire overview (it's only a few pages) by the US Treasury at the following site, mandatory reading. There are other changes that may affect your selection of expenditures. Yes, this new guidance is helpful, and the KMS team is prepared to assist you in making the best decisions for your community. But please keep in mind that you need to discuss any use of ARPA funds with your solicitor before you finalize the approach that is right for your municipality.


This is your chance to really make a difference, and creative thinking could ensure positive results for many years to come. Let us help with that process. "Fire this thing up; we're gonna make an impact on our community with this money, just you wait and see.”

 

About the Author

David L. Anthony is a member of the Keystone Municipal Solutions team of experts. He is a veteran of municipal government, having served more than 32 years in various positions of public service. Contact him at david@keystonemunicipalsolutions.com. To learn more about David and the Keystone Municipal Solutions team, click here.

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