ARPA Grants: Empowering Community Recovery

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The American Rescue Plan Act (ARPA) grant program is a crucial component of the broader American Rescue Plan Act, enacted in 2021 in response to the economic challenges brought about by the COVID-19 pandemic. The ARPA grant program specifically focuses on providing financial assistance to cities, towns, and villages across the United States through the State and Local Fiscal Recovery Funds (SLFRF) program.

Under the SLFRF program, a substantial sum of $65.1 billion was allocated for municipalities, offering a lifeline for community recovery, economic revitalization, and long-term development. The primary objective of the ARPA grant program is to empower local governments to address the impacts of the pandemic, support essential services, and invest in projects that promote community well-being via ARPA grants.

The ARPA grant program enables local authorities to access funds to bolster various aspects of their communities, ranging from public health initiatives to economic recovery efforts. The funds are intended to cover a wide spectrum of needs, including but not limited to public health expenditures, addressing negative economic impacts, replacing lost public sector revenue, investing in water, sewer, and broadband infrastructure, and supporting essential workers.

The ARPA grant program operates on a timeline, with an obligation deadline of December 31, 2024. This deadline emphasizes the urgency for municipalities to obligate the allocated funds by entering into contracts, subawards, or similar transactions that require payment. Failure to meet this deadline may result in the necessity to return the funds to the Treasury.

It’s important to note that the ARPA grant program is not only about allocating funds but also about encouraging local governments to take proactive steps in initiating projects and investments that will have a lasting impact on their communities. The flexibility provided by the program, such as the ARPA Flex, allows municipalities to tailor their use of funds to meet the specific needs of their communities, including Community Development Block Grants (CDBG), infrastructure projects, and recovery from natural disasters.

To navigate the complexities of the ARPA grant program and ensure compliance with deadlines and regulations, many municipalities seek the assistance of consulting services, such as Berquist Recovery Consulting, which specializes in guiding local governments through the process of accessing and utilizing federal grants effectively.

Black and white police car sitting in a parking lot, underneath a bridge.
Orange cones lined up on a street that was repaired with funds from ARPA grants.

ARPA Grants: A Lifeline for Communities

Enacted in 2021, ARPA laid the groundwork for cities, towns, and villages to access funds under the SLFRF program. This substantial financial injection aimed to revitalize local economies, address pandemic-related challenges, and foster long-term community development. With the first wave of funding distributed in May 2021, communities had the opportunity to chart a course towards recovery.

The SLFRF program, a pivotal component of ARPA, extends its support to every city, town, and village in the nation. The $65.1 billion allocation is intended to cover a spectrum of needs, from essential services to community development initiatives. However, the clock is ticking, with an obligation deadline of December 31, 2024. Municipalities that fail to obligate their ARPA SLFRF funds by this deadline risk having to return the funds to the Treasury.

Understanding Obligation: The Key to Unlocking ARPA Funds

The term “obligation” holds critical significance in the context of ARPA grants. According to the SLFRF Frequently Asked Questions published by the Treasury, obligation involves “an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment” (31 CFR 35.3). This goes beyond mere budgeting; local governments must take proactive steps to initiate contracts or transactions that necessitate payment.

Finance directors of local governments face a time-sensitive challenge. While the expenditure deadline is not until 2026, contracts or similar transactions must be executed in the next 14 months, emphasizing the urgency of the situation. This is particularly crucial for cities intending to utilize ARPA Flex, allowing funds to be expended on Community Development Block Grants (CDBG), infrastructure projects, and natural disaster recovery.

Black calculator sitting on top of a paper with calculations on it.
Sunset overlooking crop fields, several farmhouses, against the background of wind turbines.

Berquist Recovery Consulting: Navigating the ARPA Landscape

For municipalities seeking guidance in navigating the intricacies of ARPA grants and ensuring compliance with the obligation deadlines, Berquist Recovery Consulting stands out as a valuable ally. As communities grapple with the need to structure agreements for housing projects, infrastructure initiatives, and other essential services, Berquist Recovery Consulting provides expertise and support in optimizing the utilization of ARPA funds.

Berquist Recovery Consulting acts as a bridge between municipalities and the complex world of federal grants. Their specialized knowledge helps local governments decipher the regulations, streamline processes, and maximize the impact of ARPA funds on their communities. From designing comprehensive strategies to assisting in the negotiation and execution of contracts, Berquist Recovery Consulting becomes a trusted partner in the pursuit of community resilience and growth.

Eligibility and Timely Planning

To effectively leverage ARPA grants, municipalities must be cognizant of their fiscal year start date. With a little over a month before the FY24 budget comes into force for many entities with a January 1 fiscal year start, incorporating SLFRF funds becomes a pressing task. Claiming the funds as lost revenue and directing them towards government services is a streamlined approach, ensuring the seamless integration of ARPA funds into the budget.

For cities with a fiscal year starting on July 1, they have a six-month window from July 1st to December 31st to obligate the budgeted money. This provides a more extended timeframe for planning and execution.

Best Practices for ARPA Grant Utilization

As municipalities embark on the journey of obligating and spending their SLFRF funds, several best practices should guide their actions:

Understanding the Definition of Obligation:

Recognize that mere budgeting is insufficient. Municipalities must create contracts, subawards, or similar transactions that demand payment to meet the obligation criteria.

Developing a Comprehensive Plan:

All municipalities should have a well-thought-out plan to meet the obligation deadline. This involves a strategic approach to identifying and executing contracts or transactions within the stipulated timeframe.

Incorporating ARPA Funds in Budgets:

Calendar year budgeters should proactively examine their budgets, ensuring the inclusion of SLFRF dollars. Claiming lost revenue offers a straightforward method to integrate ARPA funds into the budget and allocate them for government services.

Time Management for Negotiations:

Recognize that negotiating and executing contracts can be time-consuming. Factoring in this time requirement is essential in the planning phase to avoid potential delays.

Exterior of a public building.

The Road Ahead: A Collective Effort for Community Resilience

As communities navigate the ARPA grant landscape, the timely and effective utilization of grants becomes a collective effort. Municipalities, with the support of consulting services like Berquist Recovery Consulting, can maximize the impact of ARPA funds, steering their communities toward resilience, growth, and sustained development. With the obligation deadline looming, the strategic deployment of ARPA grants emerges as a pivotal step in building a foundation for a brighter future.

In conclusion, the ARPA grants present a transformative opportunity for communities to not only recover from the challenges of the past but to build a resilient and prosperous future. The collaboration between local governments, federal programs like ARPA, and consulting services such as Berquist Recovery Consulting creates a synergy that can empower communities to overcome obstacles, drive economic growth, and ensure a brighter tomorrow. As the clock ticks towards the obligation deadline, the time is now for municipalities to seize the moment and unlock the full potential of ARPA grants for the betterment of their communities.