---

The American Rescue Plan 2021

Reporting Requirements

ARPA funds are subject to audit/inspection from the US Treasury so detailed records and the rationalization as to how funds were spent should be well documented. An "Annual Project and Expenditure Report" is due by April 30, 2022 and each subsequent year. 

-------------------
Reports

• City of Rolla - ARPA Reporting

-------------------

City of Rolla Plan Methodology

The American Recovery Plan Act of 2021 (ARPA) has passed and has been signed by President Biden. The act provides considerable assistance to all cities in Missouri.  Of approximately $130 billion for fiscal relief to local governments, $19.5 billion is allocated for small cities (non-entitlement cities under 50,000 pop). This money will be distributed to the cities through the State. The spending categories are broader than under the previous CARES Act.  Counties will receive separate funding. The Treasury Department is charged with promulgating rules by May 2021. Cities will not have to "apply" for the funding but will have to account for how the money was spent. The money will arrive in two tranches. The first allocation (50%) was received in August 2021. The second tranche will arrive approximately 12 months later. Cities will have until December 2024 to obligate the money. Since cities have to account for how the money is spent, if the money is held in an interest-bearing account, it should be kept separate from regular city funds – a procedure similar to CDBG and USDA.  The City of Rolla is scheduled to receive $4,162,407 and Phelps County is scheduled to receive $8,657,783.

What can the ARP funds be used for?

The current categories that the money can be spent on appear to be much broader than under the CARES Act.  Primary categories include:

1. "to respond to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19) or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality.  [includes the ability for cities to directly assist businesses hardest hit in the past year (i.e. advertising/promotion for tourism & hospitality or support for direct impacts];
2. "to respond to workers performing essential work during the COVID–19 public health emergency by providing premium pay to eligible workers of the metropolitan city, non-entitlement unit of local government, or county that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work [allows cities to pay money out to "essential workers", not just city employees – capped at $13/hour];
3. "for the provision of government services to the extent of the reduction in revenue of such metropolitan city, non-entitlement unit of local government, or county due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year of the metropolitan city, non-entitlement unit of local government, or county prior to the emergency [allows for lost funding of City services excluding utility revenues];
4. "to make necessary investments in water, sewer, or broadband infrastructure" [may be any sewer, water, or broadband project and need not be directly tied to COVID]
5. Cities may transfer money to non-profits for services or individuals/businesses adversely impacted by COVID.

Are there specific prohibitions as to how the funds can be spent?

The US Treasury will not provide specific approval as to how funds can be spent so they are looking to local government to prioritize funding/eligible projects. However, there are specific items that are "ineligible":

1. Pensions – allowable are the retirement costs for eligible personnel costs but not to arbitrarily fund pension plans (unfunded liabilities or expansion of pension benefits).
2. To rebuild financial reserves/rainy day funds (debate continuing if reserves were drawn down to deal with direct COVID impacts).
3. Paying down or refinancing outstanding debt.
4. Further Treasury clarification also precludes ARPA funds for federal grant matching requirements, premium pay for teleworkers (employees who work from home), and general infrastructure not specifically authorized by ARPA (eligible uses include water, sewer & broadband). 

Rolla 2020 Fiscal Advisory Committee

Statements of Principle/Policy Recommendations

1. Policy No. 1: Take care of what already exists before adding new projects!  Sustain existing City services and infrastructure as a priority over new and expanded programs & services.
2. Policy No. 2: It is imperative to demonstrate physical discipline.  If an idea, program or service is proposed but not budgeted the City should proceed only after careful review of the adopted budget.  Approval of such proposals would require formal budget amendment. 
3. Policy No. 3: Efficient and effective government requires creativity.  Actively pursue creative partnerships, consolidating of public services and privatization may occur when economically feasible.
4. Policy No. 4: Funding of new and expanded services should first consider the practicality and feasibility of "user fees".  User fees should be considered when the primary beneficiary is a small segment of the population.
5. Policy No. 5: Any new or expanded program or service should first identify funding alternatives and secure same before implementation.  When applying for or accepting grant funds the City must consider securing local match for future obligations and sustainability. 
   

Spending Priorities/Rationale:

While ARPA funding has a four-year window to obligate funds it is not sustained funding.  Planned expenditures should be carefully assessed to provide the most direct impact on COVID-relief and stimulating of the economy while not adding long-term financial obligations. 

The following priority ranking should be considered:

1. Meeting known and identifiable needs, not wish-list items
2. Investment in one-time or long-term capital expenses
3. Capitalizing phased expenses (reducing future financial obligations)
4. "Essential worker" compensation consideration but limited to lump sum distributions rather than base pay
5. Replenish reserves impacted by revenue losses incurred by COVID-19
6. Community Impact