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 ARPA reporting can be found here.
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. As well as any solicitors claiming costs for official registrations or ARPA support.
ARPA Funding Presentations and Videos
Webinar Recording: Presentation on ARPA Uses and Updates by MAT
January 12, 2022
Download the slides at: ARPA-Uses
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.
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. Please visit the Treasury’s website for the latest information.
ARPA: Project & Expenditure Report 2023
Reporting for spending that occurred from (4-1-2022 to 3-31-2023) opened on April 1, 2023, and is due April 30, 2023!
Project & Expenditure Form Instructions:
-No (Provide narrative why), then SAVE & NEXT
-Yes = Add/Edit 1 Project for all township expenditures
For questions and assistance with this reporting, please email Nicole Schluter at email@example.com
Update on the Status of Treasury's Contact Center:
Starting on October 17, 2022 Treasury began curtailing contact center operations due to an administrative funding shortfall for certain recovery programs as we work with Congress to provide the flexibility to spend already appropriated funds across recovery programs. As of that date, Treasury’s contact center ceased its phone operations and all incoming calls are now receiving an automated voicemail messaging referring them to self-service resources available on the Treasury website. As part of this reduction in Treasury’s operations, beginning on November 1, 2022, the Department is also ramping down staff support for its email response operations, and as a result, response times to recipient emails are also expected to be significantly delayed. For additional background on the reasons for these adjustments, please see a recent letter to recipients linked here and reported on here. We continue to encourage recipients to use the self-service resources on Treasury’s website as their first stop for efficiently answering any questions that they have about recovery programs.
June 10 Updated Link:
On June 10, 2022, Treasury released updated Compliance and Reporting Guidance (Reporting Guidance) and the Recovery Plan Performance Report (Recovery Plan) template for the SLFRF program. These documents include updates to reflect the final rule that Treasury adopted on January 6, 2022, which took effect on April 1, 2022. These updates take effect for the next Project and Expenditure Report and Recovery Plan that certain recipients need to submit by July 31, 2022.To access the update Reporting Guidance and the Recovery Plan and learn more about the SLFRF program, please visit treasury.gov/SLFRPReporting
Helpful Tips on ARPA Reporting for Townships
· Your township will need to register through login.gov. If you run into log-in issues, please contact the help line for login.gov. Minnesota Association of Townships staff do not have access to that information to change or help townships.
· If information in the U.S. Treasury portal is incorrect for your township, please contact the US Treasury at SLFRP@treasury.gov and explain the issues.
· After you receive a login from login.gov and sign in, if it doesn’t take you directly to the reporting portal, open a new browser: portal.treasury.gov/compliance . There you will see where you get to the compliance reports.
This is the newest video/webinar addressing step-by-step ARPA project & expenditure reporting and compliance for the SLFRF program specifically for townships. This webinar focuses on simplified submissions under revenue replacement.
We strongly encourage clerks and treasurers to watch this video / webinar before contacting the MAT office for help or questions, as MAT staff does not have access to your individual township information and are not able to change information for townships. (The U.S. Treasury is the only one authorized to access that information.)
If you are still having issues after all of these steps, including watching the video/ webinar, please contact the MAT office.
1. 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.
2. Is there anything we cannot spend our ARPA money on in the lost revenue category?
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.
3.How do we determine our lost revenue?
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.
4. Is there any reason not to place all of our funds into lost revenue?
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.
5. What are the resolutions for, and must we complete them?
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.
6.When do we complete our lost revenue resolution?
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.
7.How often do we complete 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.
8.What amount do we put in the resolution?
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.
9. I heard we can’t use ARPA money towards pensions. Does that mean we can’t pay PERA with it?
ARPA restricts pension payments that are an extraordinary payment of an accrued, unfunded liability. This references two main types of pension payments, 1) a pension liability incurred prior to the start of the COVID-19 pandemic and 2) payments that are over and above the regular payments. Regular contributions via payroll are not restricted.
10. Can we lower our levy and offset that lowered levy with the ARPA fund?
Yes. Although, ARPA has a provision where certain governments cannot “offset a net reduction in tax revenue,” this provision explicitly does not apply to townships. With that being said, the purpose of ARPA is to hit the ground running as we exit the pandemic. The pandemic has magnified many deficiencies in government, and the purpose of ARPA is to mitigate some of those deficiencies. One of the areas of deficiency outlined in towns is the margin on which townships operate, meaning town levies usually cover the known year-to-year expenses and maybe allot for some savings in the case of an emergency. Towns should be increasing their levy annually to ensure they can keep up with inflation, and many towns have catching up to do to be inline with this goal. Towns can use lost revenue to help bridge that gap rather than greatly increasing the levy once or twice every 5 to 10 years.
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