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4 Key Questions About the American Rescue Plan

Jul 14, 2021 2:26:15 PM

Get answers about federal grants and how local governments can benefit

Municipalities and counties across the country are receiving funds from the American Rescue Plan aimed at restoring communities after the economic and public-health devastation of the pandemic. However, for small-to-mid-sized communities, ARP comes with its own set of challenges and questions.

Our team of federal-grant experts are skilled in working with local governments and have put together this list of some of the most frequently asked questions about this $1.9 trillion act.

See if your government’s questions are answered:

“What makes a project eligible under ARP funding guidelines?”

These monies are meant to be used to help local, state, and tribal governments restore and rebuild after the public-health crisis. To make it easier for local leaders to discern how they can spend these funds, the Department of Treasury issued the Interim Final Rule which breaks down eligible projects across four categories:

  • Public health & economic impacts: This includes investments in public-health needs and hardships due to the pandemic. Example projects might include vaccine incentives, health programs for the unhoused, and programming to address pandemic-related mental-health consequences. 

  • Water, sewer, and broadband infrastructure investments: This is perhaps the aspect of the ARP that local governments are most curious about, considering local governments always need to invest in thoughtful projects with long-term impacts. But infrastructure spending must be related to pandemic concerns, such as expanding broadband access and speeds, facilitating remote monitoring, etc.

  • Premium pay: Local leaders recognize how important it is to retain first responders, frontline workers, and other essential employees with significant institutional knowledge during a crisis. ARP helps local governments keep key staff on the payroll through activities such as offering retroactive bonuses to frontline workers on the job during the public emergency.

  • Lost revenue: Many communities missed out on revenue due to diminished spending. The ARP allows for coverage for lost revenue, such as hotel-motel taxes, sales tax, fees from deferred business licenses, etc.

Local leaders should consult the Treasury’s Interim Final Rule regulations to determine whether project proposals are eligible. Learn more about how to secure assistance from third-party evaluators. 


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"Can our local government use ARP funds to match other federal funding sources?"

Before commingling federal funds toward projects, be sure to check the rules of each funding source. If other federal programs prohibit the use of federal matching funds (as opposed to local, state, or NGO matching funds), then your project would be ineligible to use ARP monies.

The bottom line? It’s challenging to pick apart federal grant language to design projects that are covered by the rules as well as impactful to your community.

"Can we use ARP funds to fund our pension obligations?"

The Treasury prohibits the use of ARP monies to reduce unfunded pension liabilities accrued prior to the start of COVID-19. Municipalities and counties cannot use this assistance to make payments that occur outside regular timing, separate from typical payroll contributions.

"Can a community use the ARP funds to reimburse expenses already incurred?"

ARP funds can be used only for costs incurred by your local government after March 3, 2021.  

Direct your ARP funds with confidence

ARP funds represent a significant opportunity for local governments to make smart choices that can impact their community for a generation. Local leaders want to make sure all reporting requirements are met to ensure that projects are eligible and necessary. This can be a challenge for local governments struggling with fewer staff and more needs than ever.

Discover how your local government can get help prioritizing, managing, and reporting your ARP spending. Through Azavar’s Community Resilience Initiative, municipalities and counties receive assistance from government grant experts regarding:

  • Meeting the regulations outlined by the Department of Treasury
  • Fulfilling reporting requirements, such as data management and timelines for expenditures
  • Developing internal policies and procedures to fulfill ARP requirements
  • Create a municipal data-control system to ensure complete documentation

Schedule a free consultation with our team of government grant and revenue experts to learn more about the Community Resilience Initiative. 

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