The US Treasury distributed the first allotment of American Rescue Plan Act (ARPA) funds in June of this year, however, many Wisconsin municipalities are taking a wait-and-see approach when it comes to allocating their payment. Updates to the Interim Final Rule offers community’s more flexibility for acceptable use of ARPA funds, which may spark even more ideas for the best way to spend your dollars, but doesn’t make your decision making process any easier.
ARPA states that municipal relief funds must be allocated by December 2024. Even with plenty of funding, planning municipal projects can take a significant amount of time, which is why it’s so important to start the early steps of the planning process as soon as possible.
Here are answers to some of the recent questions we’ve heard most often surrounding ARPA to help keep your planning process moving forward.
Can the funds be spent on infrastructure other than water, sewer, or broadband?
Yes, to the extent of the municipality’s reduction in revenue due to the pandemic. These funds can be used for maintenance of infrastructure or pay-go spending to build new infrastructure.
Can the funds be used for road repairs and upgrades?
Yes, if the road work is directly related to an eligible sewer or water project, and up to the limit of the revenue reduction due to the pandemic. For instance, if a water main were being replaced, the roadwork could be funded via ARPA dollars.
What about planning and design? Can ARPA fund those costs?
Yes, so long as the work is likely to lead to an eligible water, sewer, or broadband project. Eligible costs include obtaining project authorization, planning, design, and project startup like training and warranty for equipment.
Can we use ARPA funds as a non-federal match for Clean Water Fund Loans (CWFL) or Safe Drinking Water Fund Loans (SDWFL)?
No, recipients cannot use these funds as a state match for CWFL or SDWFL because of federal laws and regulations.
Can we pool funds for regional projects?
Yes, so long as the project itself is eligible. A municipality could transfer funds to another municipality or government entity to advance the project, and it would need to report that it receives a benefit in proportion to the amount it has contributed.
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If you’d like to learn more about how our experts can help you allocate your ARPA funds in a way that will make a long-lasting impact in your community, please contact us today.
About ThE AUTHOR
EDWARD F. MAXWELL
ECONOMIC CONSULTANT
Edward joined Ruekert & Mielke, Inc. (R/M) in 2017 as a financial analyst. Before joining R/M, he worked in private-sector finance, analyzing capital investments, forecasting expenses and revenue, and crafting department budgets. At R/M, he creates financial solutions for all clients, from municipalities to corporate businesses.
