CCFB News» September 2021

Under the American Rescue Plan Act (ARPA), counties are receiving a lot of money to help turn the economic tide on the pandemic. With this money comes questions about eligible expenses on which it can be spent. Information provided in this article has been pulled from the U.S. Treasury Interim Final Rules and guidance.

Under the Interim Final Rules, counties have broad flexibility to use funds. They, in large part, just need to demonstrate their spending supports the public health response and that recipients have experienced economic harm from the pandemic. Counties can supplement government revenue lost from providing public services tied to the pandemic, premium pay for essential workers who could not work remotely, and investment in water, sewer, and broadband infrastructure.

Counties can also use the funds to:

• Respond to the public health emergency and negative economic conditions impacting individual households, small businesses, and nonprofits.
• Aid impacted industries such as tourism, travel, and hospitality.
• Increase the number of its employees, up to the number of employees as of Jan. 27, 2020, and cover payroll, covered benefits, and other related costs.

Guidance from the U.S. Treasury provides more examples of these primary options where counties can consider investing funds. These examples are apart from the broader use of funds allowed for under the “lost revenue allowance.”

• Support public health response: Fund COVID-19 mitigation efforts, medical expenses, behavioral health care and certain county public health, public safety, human services, and other related staff.
• Address negative economic impacts: Respond to economic harms to workers, families, small businesses, impacted industries, and rehiring of public sector workers (including county staff).
• Replace public sector revenue loss: Use funds to provide government services to the extent of the reduction in revenue experienced during the pandemic – this provision allows for a much broader use of funds.
• Premium pay for essential workers: Offer additional compensation, up to $13 per hour in additional wages to county employees and other essential workers who have faced, and continue to face, the greatest health risks due to their service. These funds can be used retroactively back to January 27, 2020.
• Water, sewer, and broadband infrastructure: Make necessary investments to improve access to clean drinking water, invest in wastewater and stormwater infrastructure, and provide unserved or underserved locations with new or expanded broadband access.

There are a few ineligible uses of the ARPA funds addressed in the Interim Final Rules. Listed below are a some of those restrictions:

• Funding pension accounts.
• Premium pay for employees who were able to work remotely during the pandemic.
• Paying off local government debt.
• Deposits into a “rainy day” fund or financial reserve accounts.
• Paying legal settlements or judgements.
• Economic or workforce development not connected to economic loss from the pandemic or related to the “revenue loss” allowance.
• Infrastructure spending outside of water, sewer, and broadband, such as new county buildings and road and bridge improvements.

In general, counties are limited to the use of funds to cover costs incurred from March 3, 2021 to Dec. 24, 2024, with all activities completed by Dec. 21, 2026. However, counties can offer retroactive premium pay that dates back to the start of the public health emergency on Jan. 27, 2020.

For additional guidance on spending, review the publication, Overview for America’s Counties: U.S. Treasury Interim Final Rule & Guidance for State and Local Fiscal Recovery Funds, provided on the National Association of Counties website.

Cook County Farm Bureau reviewed proposed fund use and continues to monitor project proposals.