ARPA: What You Didn’t Know Has Hurt You

MRWA Annual Conference

March 5, 2025

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Valarie Main, TMF Specialist, MRWA�Ramona Huckstep, TMF Specialist, MRWA

Topics

• What is ARPA
• Rules and Restrictions of ARPA
• Obligation of Funds
• Reporting for ARPA

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What is ARPA

• ARPA also known as the American Rescue Plan Act
• Signed into law by President Biden on March 11, 2021
• Was intended to help the US recover from the COVID-19 economic and health impacts.
• Provided funding to all cities, towns and villages in the US
• The US Department of the Treasury is responsible for overseeing the program.

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ARPA in Missouri

• 925 smaller municipalities or Nonentitlement Units (NEUs) received funds
• $450 million was given out to NEU municipalities
• Missouri was one of the only states where the funds were given to the State Office of Administration (OA) to distribute
• Initially forms were sent to OA, however OA no longer has a role in the ARPA funds

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Some of the Rules of ARPA

• Initially, the funds could only be used in specific areas
• Most funds were used for wastewater and drinking water projects, as allowed by ARPA
• In 2022, the guidance was updated to include using the funds for “Government Services”.
• Examples: road building and maintenance, provision of police, fire and other public safety services

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ARPA Restrictions

• Some restrictions on ARPA funds include:
• Funds can't be used to delay or offset tax reductions
• Funds can't be deposited into pension funds
• Funds must be obligated by the end of 2024 and expended by the end of 2026

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What has changed:

• In May 2021, the US Treasury published the Interim Final Rule
• In January 2022, US Treasury adopted the Final rule (effective April 1, 2022)
• December 29, 2022, the Consolidated Appropriations Act was enacted
• This amended the State and Local Fiscal Recovery Funds (SLFRF) Program to provide additional flexibility for new categories.
• The 2023 Interim Final Rule became effective in Nov.

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• The Obligation Interim Final Rule was published Nov. 20,2023 and became effective March 29, 2024.

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Thus, the problem starts:

What does OBLIGATION mean:

• The term “obligation” means:
• an order placed for property and services and entry into contracts, subawards, and similar transactions that require payment.
• As discussed in the Obligation Interim Final Rule, a recipient is also considered to have incurred an obligation by Dec. 31, 2024

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Rule for Obligating Funds

• Spent no later than Dec. 31, 2024

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• Contract no later than Dec. 31, 2024

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• Purchase Order no later than Dec. 31, 2024

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Ways that ARPA Funds Cannot be Obligated

• A Council vote is NOT a way to obligate funds
• Meeting minutes is NOT a way to obligate funds
• Including it in the budget is NOT a way to obligate funds

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What may happen to funds not obligated by Dec. 31, 2024?

• Recipients are required to return to the US Treasury the funds that have not been obligated by the deadline.
• Recipients will report funds that were obligated in the Project and Expenditure Report that is due by April 30, 2025.
• There will be more information to come on how this return of funds will work.

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How Does The Obligation Deadline Impact Recipients That Have Already Obligated All of The Funds?

• If a recipient has already obligated all of its funds in compliance with the US Treasury’s rule and guidance, the recipient does not need to make any changes or take any additional steps to comply with the obligation deadline.
• Recipients are required to continue to submit reports to the US Treasury
• The US Treasury will provide closeout instructions that will provide information to recipients on how to complete and provide final reports.

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Does The Definition Of “OBLIGATION” Apply To Funds Used Under The Revenue Loss Category?

• Yes!! All State and Local Fiscal Recovery Funds (SLFRF) funds under any eligible use category are subject to the obligation requirements.

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• Recipients satisfy the obligation requirement by using revenue loss funds to cover purchase orders, contracts, and similar transactions requiring payment entered into by December 31, 2024.

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Reporting for ARPA

• Most municipalities receiving funds have to submit an annual report to the US Treasury.
• Need a Unique Entity Identifier or UEI to do the report.
• The portal to enter the annual reports open April 1, 2025.
• The annual report information should be submitted by April 30, 2025.

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What is needed for the portal

• You will need the login that was created back when this all started.

• If you have had a change in office staff, contact covidreliefitsupport@treasury.gov to start the process of getting access to your records.

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• If you try and start over, you will have to still contact covidreliefitsupport@treasury.gov to get your reports moved over to your new account.

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How to Enter into the Portal

1. Go to https://portal.treasury.gov/compliance/s/
2. This will direct you to Login.gov
3. Put in your email address and password
4. Put in the security code sent to your phone
• If the phone is no longer available due to change in office staff or elected official:
• Contact previous staff to get the code. This is proprietary information that belongs to the City and the previous person is required to share it.
• Email covidreliefitsupport@treasury.gov to get phone number changed.

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Questions?�Contact:�Valarie Main �660-473-3365�vmain@moruralwater.org �Ramona Huckstep�573-619-8657�rhuckstep@moruralwater.org