LOC News
American Rescue Plan Payments - Here's What We Know
The LOC has received numerous calls and emails about when the American Rescue Plan (ARP) distribution to cities is coming and how it can be spent. The best response we can offer at this time is to be patient and recognize it will take time before we see clear details on spending restrictions, as well as when the funding will make its way to cities, counties and the state.
The good news is that funding is on the way, and every city will receive a funding allocation. The following Q&A should help answer some initial questions.
Summary of Payments to Cities
- The NLC has supplied a spreadsheet showing estimated payments for each of the cities in Oregon.
DISCLAIMER: These are estimates from the House Committee on Oversight, not final allocations. Issues have been found in other state allocations that may or may not change Oregon allocations.
How do cities get ARP funding? Do they need to apply?
- There is no application process required under the ARP, nor is there a reimbursement process that is comparable to the Coronavirus Relief Fund (CRF) money that was released in 2020. Cities will receive the funds up front and will be responsible for submitting periodic reports to the U.S. Treasury, detailing how they are spending the funds.
When should my city expect to see the payments?
- Community Development Block Grant (CDBG) entitlement cities (generally those with a population greater than 50,000) will receive distributions directly from the U.S. Treasury within 60 days of the law’s enactment, March 11. Smaller cities will receive distributions about 30 days after that through the state. It is possible the state may request additional time, but they will have to justify their need for it.
- Cities will receive one-half of the total allocation in the first payment and the balance of funds about one year later.
How will the state pass the money through to smaller cities?
- The state will pass through funds according to a predetermined formula, and importantly, the language states that the state “shall” distribute the funds, not that it “may.” The state is subject to penalties if it fails to distribute these funds and cannot collect any processing fees for the pass through of funds.
Can states place any additional restrictions on ARP funds?
- Our understanding is that the guidance for the use of ARP funds will come from the federal government. The U.S. Treasury guidance for the CRF monies specified the state could not put any additional restrictions on use, and we hope the guidance for the ARP will use similar language. States have not been given any authority to place additional restrictions on the use of the ARP funds.
What can ARP funds be used for?
- To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel and hospitality.
- To respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the city that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work.
- For the provision of government services to the extent of the reduction in revenue of the city due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency.
- To make necessary investments in water, sewer, or broadband infrastructure.
What uses are not allowed for the funds?
- Reducing taxes by legislation, regulation or administration.
- Deposits into pension funds.
What additional guidance is or will be available?
- We are expecting the U.S. Treasury to issue guidance, similar to what they put out for the CRF money. We expect it will take some time to get that together, and it may come out in multiple updates like last time (unfortunately). There is nothing available yet.
- The National League of Cities is working on guidance as well and will be shared on their COVID-19 Relief Resource Hub. Cities may also submit a question to the NLC and they will try to include them in any guidance.
- The LOC will also be providing guidance similar to what was done for the CRF program. This will likely take the form of summary documents, virtual trainings, and sharing any information from the state. Stay tuned!
Contact: Mark Gharst, Lobbyist - mgharst@orcities.org or 503-991-2192
Last Updated 3/26/21