On March 11th, 2021, President Biden signed the American Rescue Plan Act (ARPA) into law. ARPA provides stimulus to individuals, businesses, and government entities to assist in their respective COVID-19 responses. ARPA interests townships both as a government entity and an employer. Minnesota towns will receive a portion of$350 Million provided to all Minnesotan towns and cities with a population under 50,000, but none can receive more than 75% of their 2019 budget. The term “budget” for setting the 75% limit means either formal budget, which many towns do not have, or a town’s 2019 total expenditures. The deadline to apply for these funds was October 10th, 2021. At this time, no more towns will receive any further funds.
Any town that applied for ARPA will receive its funds in two tranches. The first tranche began to be distributed in July of 2021 and ran through November of 2021. The second tranche will likely be distributed sometime during mid-summer to early fall of 2022. Towns also received a supplemental distribution for the remaining funds from NEUs that did not apply. Each town can review its to-date distribution and distribution dates in this document.
The U.S. Department of Treasury (Treasury) was tasked with clarifying ARPA. On May 17th,2021, the Treasury released their Interim Final Rule, which was the original clarification related to many of these rules. Throughout 2021, the Treasury received public comment on the Interim Final Rule aiding them in further clarifying the rule. In early January 2022, the Treasury published the Final Rule, which was generally broader than the Interim Final Rule. Any further discussion on this issue can be found in the ARPA Uses tab.
Towns that have received ARPA funds must complete a yearly report on the use of ARPA funds. The first report must be completed by April 30th, 2022. The reports will run through 2026 or when all of the ARPA funds are expended, whichever is earlier. All of the up-to-date content on RPA reporting can be found in the ARPA uses tab.
Towns are limited on what American Rescue Plan Act funds may be spent. The links below discuss approved expenditures, and what processes the town can go through to determine what is allowed.
BEWARE of ARPA-related scams! Many local governments report receiving unsolicited communications from businesses suggesting the town can use its ARPA money on the solicitor’s product or service. Some say they are “ARPA Approved”, but no such official approval exists. Many of these products and services will not qualify as legitimate ARPA-related expenses. Towns should be wary of any unsolicited offer for the use of its ARPA funding.
ARPA Funding Presentations and Videos
Webinar Recording: Presentation on ARPA Uses and Updates by MAT
January 12, 2022
Download the slides at: ARPA-Uses
What is Lost Revenue?
ARPA provides for four spending categories, the broadest of which is lost revenue. Under lost revenue, a government entity may spend on government services, which includes any cost that would come up in the course of running the township. Some examples of government services include purchasing laptops, audiovisual equipment, wages/payroll, roads, gravel, asphalt, mowing ditches, replacing culverts, renovating or building a townhall, maintaining a park, etc. this is a non-exhaustive list of government services. The general rule of thumb is that you can use the lost revenue category if you can pay for it normally.
Yes, you cannot spend to pay off debt, pay into pension funds, and place into a rainy day fund, meaning the town cannot save the funds past December 31st, 2024. Further, under lost revenue, if the town does not have the legal power from Minnesota to expend these funds, then lost revenue replacement does not give the town a new power to expend these funds.
Lost revenue is defined by the Department of Treasury. It is determined through one of two options. Option A requires a complex formula. Option B is a “standard allowance” of $10,000,000 that all towns may elect to use. In other words, Option B states that if a town received less than $10,000,000 from ARPA, it may use the standard allowance, which would allow them to designate all of the ARPA funds it received as lost revenue. By the Department of Treasury’s definition of lost revenue, every township in Minnesota may use all of their ARPA in lost revenue by electing to use the standard allowance.
There are certain powers that ARPA provides not normally available to towns. These are (1) working with private broadband providers to bring broadband into the township, (2) premium pay to essential workers, and(3) providing grants to households or businesses.
First, no, the resolutions are not required. However, the resolutions provide aid to towns in three distinct ways: (1) It provides good record keeping, (2) It will aid in streamlining reporting, and (3) If the town is audited, it will serve as evidence for the valid cost.
It is best to complete these resolutions as soon as you can. There may be other factors limiting the town from using all of its funds under lost revenue, as discussed in FAQ 5. If there are other projects the town wants to use ARPA funds on, the town may wait to pass the resolution.
You only have to complete this once for the lost revenue replacement resolution. However, if you are looking to complete other projects, you will have to prepare a resolution for each project.
The town can place up to all of the revenue they are expected to receive. Remember, each town received its first half last fall, and the second half, which will be the same, will be distributed sometime during the summer or fall of 2022. Further, the town will insert the dollar amount rather than a percentage.
ARPA Spending Resolutions
A Resolution to use by the town seeking to spend part or all of their ARPA funds on broadband infrastructure investments.
A Resolution to use by the town seeking to provide part or all of their ARPA funds towards grants to businesses.
A Resolution to use by the town seeking to provide part or all of their ARPA funds towards grants to households.
A Resolution to use by the town seeking to allocate ARPA funds to replacing lost revenue.
A Resolution to use by the town seeking to spend part or all of their ARPA funds by providing premium pay to essential workers.
Announcement: The reporting date has been changed from October 31, 2021 to April 30, 2022 for all townships. Further instructions will be provided at a later date, including updates to existing guidance as well as a user guide to assist recipients to gather and submit the information through Treasury’s Portal. Please visit the Treasury’s website for the latest information.
The use of American Rescue Plan Act funds must be reported annually, beginning October of 2021, and can continue through October of 2026. Information regarding how to and what to report will be found below.
The U.S. Department of Treasury has posted a recorded presentation (August 23, 2021) providing a walkthrough of the reporting portal.
The Treasury has held additional webinars covering targeted topics under SLFRF reporting, and have stated they plan to continue offering such assistance in the future. The webinars can be accessed here, however, cannot solely be relied on for reporting. Recipients must refer to the Compliance and Reporting Guidance as well as the User Guide for a complete understanding of theWebinar: Preparing for ARPA Reporting, hosted by the League of MN Cities.
You’ve requested and begun to receive your ARPA funding, now how does your city prepare for the first ARPA Project and Expenditure Report? This free webinar on Sept. 21 provided important information that will help you collect and complete all necessary steps.
During this free webinar: