As of January 11, 2022, there are two key changes you need to know about ARPA funding based on our recent review of the US Treasury’s Final Guidance.
1 – Use of ARPA funds under Revenue Shortfall for Government Services
Final guidance allows units of local government to elect to use a “standard allowance” of $10M (or their total allotment, whichever is less) to fund “government services without having to document/calculate the actual revenue shortfall. The guidance further defines government services to include “any service traditionally provided by a government. Examples listed (but stated to not be exhaustive) include road building and maintenance; other infrastructure; environmental remediation; government facilities. Government services is stated to be the most flexible use category now with the standard allowance.
What does this mean? This clearly brings in any project related to these services including aviation projects without having to document any revenue shortfall by the unit of government up to $10M.
2 – Use of ARPA funds for Water/Wastewater/Stormwater Infrastructure
Final guidance expands eligible uses beyond the CWSRF/DWSRF eligible projects. These expanded uses are particularly relevant to stormwater in that general stormwater infrastructure projects with or without a water quality component are now eligible – culvert repair, resizing, removal, replacement of storm sewers and additional stormwater infrastructure. There are also now eligibilities for residential well assistance opportunities along with water supply dam/ reservoir rehabilitation and lead service line replacement along with testing, etc.). The threshold for these additional projects is that they must be “necessary,” which means that 1) it is in response to an identified need to achieve or maintain a minimum level of service; and 2) it is a cost-effective alternative for addressing the need.
Want to see the detailed “Coronavirus State and Local Fiscal Recovery Funds: Overview of the Final Rule” document? Click here.