Cities Share Ideas for Using American Rescue Plan Act Funds

August 9, 2021

A recent webinar allowed cities to discuss challenges and opportunities with using ARPA funds.

Over 200 Minnesota city officials participated in American Rescue Plan Act (ARPA) roundtable webinars offered by the League on July 26 and 27, 2021. The sessions were grouped by population to enable cities of similar size to interact and discuss planning, implementation, and the process of using ARPA funds.

The discussions were facilitated by League staff and focused on projects cities are considering as well as opportunities and challenges associated with the use of ARPA funds. Partnering with other units of government on projects was explored as well as coordinating State and Local Fiscal Recovery Funds with other funding under the American Rescue Plan Act to meet needs.

Background on ARPA

The ARPA provides relief to cities to enable them to continue to support the response to the pandemic and lay the foundation for a strong economic recovery. Utilizing funds to mitigate the effects of COVID-19, replace lost revenue, support premium pay, and invest in infrastructure, including water, sewer and broadband spurred lively conversation. Because ARPA Funds have more eligible uses than the CARES Act provided and a longer period of time to use the funds, cities are giving thoughtful consideration to the best use of the funding. These funds have the potential to impact communities for years to come.

Distribution of ARPA funds

The first distribution of ARPA funds went out on July 26, 2021 to cities who had completed the application process and additional distributions will follow as cities submit their applications. The allocation for non-entitlement units of government (generally those with a population under 50,000) is $105.81 per capita. The actual distribution will vary based on rounding and the 75% of budget cap. The first half of the allocation will be transmitted as a direct deposit into the city’s bank account. A remittance advice can be found in SWIFT and will note “ARPA” in the description. The second half of the allocation will be distributed in the summer of 2022.

Deadlines to consider

Non-entitlement units of government will be required to submit a Project Expenditure Report covering spending activity from the date funds are received through Sept. 30, 2021. This report will be filed directly with the U.S. Treasury and is due by Oct. 31, 2021. Keep this in mind as you receive and spend funds. The U.S. Treasury will begin accepting reports in Oct. 2021 and will issue a user guide and other reference materials before that date.

For more information

The U.S. Treasury’s Frequently Asked Questions on Coronavirus State and Local Fiscal Recovery Funds (pdf) contains helpful information. The most recent update was published on July 19, 2021 and is an excellent resource.

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