In January 2022 the U.S. Treasury issued the Coronavirus State and Local Fiscal Recovery Fund Final Rule, along with this 44-page Overview of the Final Rule. The Final Rule takes effect April 1, 2022, and until then the interim rule remains in place, but municipalities can follow final rule guidance with no penalty.
In light of the Final Rule, more municipalities are making spending decisions. This means that nonprofits need to act fast and strategically if they plan to access these one-time funds. Read on for:
- Local ARPA Background & Final Rule Overview
- How Nonprofits Can Access Local ARPA Funds
- Toolkits and Resources
- How SOME municipalities are making decisions and spending ARPA funds.
- Share Your Experience
Local ARPA Background & Final Rule Overview
For background on the Interim Final Rule and local ARPA funds, see our Vermont Nonprofit Guide to Local Fiscal Recovery Funds that we compiled in September 2021.
The major change under the Final Rule, which does not bode well for nonprofits, is that “recipients may elect a “standard allowance” of $10 million to spend on government services through the period of performance” (Overview of the Final Rule). Under previous, more prescriptive guidance, the allowable uses made local government and nonprofit partnerships an attractive option, as funds could primarily be used only to:
- Support public health expenditures
- Address negative economic impacts caused by the public health emergency
- Replace lost public sector revenue
- Provide premium pay for essential workers
- Invest in water, sewer, and broadband infrastructure
Now that municipalities are more likely to take the standard allowance to spend on government services, which Vermont League of Cities and Towns (VLCT) is advising towns to to take because “This approach provides the most flexibility in spending and streamlined reporting requirements,” nonprofits face greater competition for funds. Municipalities that were previously restricted to investments in water, sewer and broadband infrastructure, now have the opportunity to invest in the construction of schools and hospitals, roads, health services, administration, and more. The new guidance also detracts from the community engagement requirement as municipalities with existing plans or needs assessments can use these documents as a spending guide.
How Nonprofits Can Access Local ARPA Funds
The new guidance does not mean it’s game over for nonprofits, it just means that asks need to be strategic. VLTC continues to advise towns to engage residents in the planning process, and plenty of funds remain.
Consider the following when developing your proposal:
- How are decisions about ARPA spending being made in your municipality? Who is making them? (City Council? Is there an ARPA committee? City management? Town meeting ballot?)
- How much funding did your municipality receive? What priorities have already been identified by local government? How does your proposal compare in size/impact?
- Are you able to leverage local ARPA funds with additional dollars?
- Are you working with collaborators or can you demonstrate community support for the project?
- As these are one-time funds, is there a capital campaign or specific project you have in mind that will have a lasting impact on the community?
- How will you measure and report on the impact of the project?
VLCT recommended the following guidance for requesting funds:
- Clearly and concisely articulate your need.
- Keep your narrative under 250 words.
- Who will benefit from the request?
- Which Expenditure Category do you fall into? (Less important if the municipality has taken the standard allowance).
- How much?
- What is the total dollar amount of your ask?
- Provide a cost justification or project budget.
- Will you seek funds from other towns?
- Why you?
- What sets you apart?
- Think of this as a competitive grant application.
- What else?
- The “legislative body” makes the decisions.
- Residents can be powerful lobbyists.
- Be patient and gracious – this is new to most town officials.
- Your request will be a public record.
Toolkits and Resources
Note: Some materials predate the Final Rule.
- The Southern Economic Advancement Project has a great toolkit for advocates. You can also see their pilot tracking project that shows how municipalities in select southern states are spending ARPA funds.
- National Council’s ARPA page includes numerous resources and examples of how ARPA funds are being used in other states. A few highlights include:
- Strengthening State and Local Economies in Partnership with Nonprofits: Principles, Recommendations, and Models for Investing Coronavirus State and Local Fiscal Recovery Funds
- ARPA Nonprofit Toolkit: American Rescue Plan Act (ARPA) Funds to Municipalities Can Help Nonprofits Serve Their Communities, CT Community Alliance of Nonprofits
- Pennsylvania Association of Nonprofit Organizations ARPA Advocacy Toolkit
- Municipal ARPA Funding & the Creative Economy Webinar and Slides – Presented by Katie Buckley, Director of the ARPA Assistance and Coordination Program, Vermont League of Cities and Towns, Hosted by Vermont Creative Network
- Grant Writing Made Easy ARPA Guide for nonprofits
- VLCT’s ARPA page
- ARPA will be a focus at the Southern Vermont Economic Summit on 5/12
US Treasury Guidance:
- Webinar: State & Local Fiscal Recovery Funds: An Introduction to the Final Rule, U.S. Department of the Treasury, Jan. 11, 2022.
- Coronavirus State & Local Fiscal Recovery Funds: Overview of the Final Rule, U.S. Department of the Treasury, Jan. 6, 2022.
- Final Rule for the State and Local Fiscal Recovery Funds, U.S. Department of the Treasury, Jan. 6, 2022.
Data and Tools:
- How much did your municipality receive? Certification Dashboard – Local Fiscal Recovery Fund Allocations
- National League of Cities COVID-19 Local Action Tracker (including local ARPA spending)
How SOME municipalities are making decisions and spending ARPA funds:
Note: In Vermont, thanks to advocacy by our Congressional Delegation, ARPA funds originally designated for county level governments (which Vermont would not have qualified for) were reallocated to local governments on top of the funds they already would receive.
- Town Meeting updates from VLCT:
- At least five towns voted on how to spend ARPA funds.
- Montgomery and West Fairlee asked voters whether they should establish special ARPA funds.
- New Haven and Waltham had time on their agenda to discuss/share information about ARPA funds during their town meetings.
- Kirby warned residents of an upcoming select board meeting where ARPA funds will be discussed.
- Guildford is accepting grant applications from Guilford individuals, businesses, and organizations.
- Bennington has created a webpage to accept input and share updates.
- Richmond‘s Select Board has formed an ARPA committee to engage the community and make recommendations.
- Jericho and Burlington used surveys to gain public input.
- Manchester has approved spending $235K out of their more than $1M in ARPA funds on lost revenue, capital investments, sewer system design, and premium pay for Northshire Day School employees.
- Rockingham holds meeting on distribution of ARPA funds
- Newfane charts course for planning ARPA funds use – upcoming meetings
Share your experience:
Above are just a few examples of how towns have been managing ARPA funds up to this point. Given the unique approach each municipality is taking, and the diverse needs and priorities of their communities, there is no one-size-fits-all approach for nonprofits seeking to access local ARPA funds.
For this reason, we want to hear about your experience from the field –
- Does your town have a decision making process others should know about or are they investing in nonprofits? Please let us know so we can spread the word!
- Has you nonprofit pursued or received local ARPA funds? How did you do it? What challenges did you encounter?
Please email [email protected] to share any insights or strategies so we grow our collective understanding and build on the experiences of others. We will continue to update this resource as we learn more. THANK YOU!