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Under the Interim Final Rule, government services can include, but are not limited to, maintenance or “pay-go funded” building of infrastructure, including roads modernization of cybersecurity, including hardware, software and protection of critical infrastructure health services environmental remediation school or educational services and the provision of police, fire, and other public safety services. Once a shortfall has been identified, municipalities have broad latitude to use ARPA funding to support government services, up to the amount of lost revenue. The Treasury has established a methodology to calculate the reduction in local revenue during the pandemic, and allows recipients to recalculate revenue loss at several points throughout the program, supporting municipalities that have experienced a lagging impact of the crisis on revenue. The latest FAQ document adds further guidance for municipalities that wish to partner with nonprofits and private organizations, whether to issue premium pay or to address public health and economic impacts. The Treasury Department did, however, prohibit premium pay for employees who were allowed to telework during the public health emergency. Regarding premium pay for essential workers, the term “essential worker” is broad, and not limited to municipal employees.
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Recipients may also use funding to build internal capacity to successfully implement economic relief programs, with investments in data analysis, targeted outreach and technology infrastructure. The guidance around negative economic consequences includes rebuilding public sector capacity, including by rehiring public sector staff, and replenishing unemployment insurance trust funds to pre-pandemic levels. The initial guidance from Treasury provides for a wide range of potential uses, including COVID-19 mitigation and containment, behavioral health care to address situations exacerbated by the pandemic, and public health and safety employee costs. Response to the public health emergency or its negative economic consequences The latest iteration of the FAQ was issued on July 14.
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Since then, the Treasury has published expanded guidance for eligible expenses through an FAQ document. The Treasury Department, the federal agency responsible for administering the program, issued initial guidance - its Interim Final Rule - in early May. The $1.9 trillion ARPA federal relief package, signed into law on March 11, includes $360 billion for State and Local Government Fiscal Recovery Funds. Investments in water, sewer and broadband infrastructure.Provision of premium pay to eligible workers.Response to the public health emergency or its negative economic consequences.The latest guidance increases flexibility for spending in all four eligible expense categories articulated in the law: Department of the Treasury continues to release answers to new frequently asked questions regarding the expenditure of Coronavirus State and Local Fiscal Recovery Funds under the American Rescue Plan Act.