The American Rescue Plan Act (ARPA) included $350 billion in pandemic-related aid for state and local governments. Vermont will receive more than $1.25 billion of Coronavirus State and Local Fiscal Recovery Funding from ARPA. While the legislature and the governor will determine how more than $1 billion of that funding will be spent, Congress directed nearly $200 million of that funding directly to Vermont’s cities, towns, and villages. City councils and selectboards will have discretion over how to spend their allocations. The State of Vermont will not be allowed to add any additional rules to the roughly $200 million distributed directly to municipalities.
VLCT and its members appreciate that Vermont’s Congressional Delegation fought for this local assistance. This is the first time since the early nineteen eighties that the federal government has provided direct, unrestricted financial assistance to local units of government.
Thanks to support from the Vermont Legislature and Governor Phil Scott, VLCT established a new ARPA Coordination and Assistance Program. This page contains information about the services and tools available to help municipalities spend and track the Coronavirus Local Fiscal Recovery Funding (CLFRF). We regularly update it to help cities, towns, and villages understand how they can use the money, when to expect the money, and how to report on the money. Municipalities may submit questions about ARPA to ARPA@vlct.org.
Please note: This page is currently being revised to reflect issuance of the Final Rule on January 6, 2022.
The State and Local Fiscal Recovery Funds (SLFRF, aka ARPA) program provides governments across the country with the resources needed to:
- Fight the pandemic and support families and businesses struggling with its public health and economic impacts
- Maintain vital public services, even amid declines in revenue resulting from the crisis
- Build a strong, resilient, and equitable recovery by making investments that support long-term growth and opportunity
The Vermont Agency of Administration issued an allocation table on June 8. Click here to access the allocation table. The calculation was based on population. Funding will be distributed in two (2) roughly equal tranches, as shown in the allocation table. The first payment arrived August 2021; the second will arrive around the same time in 2022. Most Vermont towns (except Burlington and South Burlington) are referred to as “non-entitlement units of government” (NEUs) in ARPA. The State of Vermont will receive $58,788,245 in NEU ARPA funding that it will disburse to those towns, cities and villages that certified to accept it.
On July 30, 2021. Treasury issued updated guidance to correct the designation of Vermont's 14 counties to reflect they are not "units of general local government." This cleared the way for the $121,202,550 in county ARPA funding to be distributed to Vermont’s towns, cities and villages, including the two metropolitan cities of Burlington and South Burlington. VLCT worked with Vermont’s Congressional Delegation, the Governor's office and his Administration, and others to ensure this funding reaches local governments.
Like the NEU money, the county ARPA money will be distributed in two (2) roughly equal tranches. The first arrived early September 2021; the second will arrive around the same time in 2022.
Vermont's NEUs that certified to accept their funding will receive it from the U.S. Department of the Treasury through State of Vermont. The funding will arrive in two (2) roughly equal payments ("tranches"). The first payment was made in August of 2021 and the second payment will be made about the same in 2022. Per ARPA, the State has 30 days from when they receive the funding to distribute the funding to municipalities.
The City of Burlington and the City of South Burlington were designated as "metropolitan cities" and therefore requested and received their ARPA funding directly from the Treasury.
The county ARPA funding will also arrive in two (2) roughly equal payments ("tranches"). The first payment in was in September 2021 and the second payment will arrive about the same time 2022. It will be distributed through the State of Vermont to all NEUs that certified to accept their ARPA funds, as well as the cities of Burlington and South Burlington. There is no additional certification process required to receive these funds.
When your town/city/village completed its Coronavirus Local Fiscal Recovery Fund Certification process through the portal, you would have selected one of the three possible options for how your town/city/village would like to receive its money:
- We are a vendor in the State's financial system and would like payment to be made according to our current supplier preferences.
- We are a vendor in the State's financial system and would like payment to be made differently.
- We are NOT a vendor in the State's financial system and need to set up an account.
If your town/city/village chose option 2 or 3, then you were contacted by email or phone to provide additional information.
If your town/city/village selected option 1, then your ARPA funding will be ACH'ed into the same bank account that you receive other state revenue.
ARPA includes four broad criteria outlining eligible uses:
To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers;
For the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency; and
To make necessary investments in water, sewer, or broadband infrastructure.
On January 6, 2022, the U.S. Department of the Treasury issued the Final Rule that further explains eligible and ineligible uses.
The National League of Cities has provided some additional FAQs about how the funding can be used. Treasury has also issued easy to read and understand FAQs about the Interim Final Rule. Treasury anticipates issuing FAQs for the Final Rule at a later date. Recipients may find helpful the Overview of the Final Rule, which provides a summary of major provision of the Final Rule for informational purposes.
What should my town/city/village do with their signed Terms and Conditions and Assurances of Compliance with Civil Rights Requirements?
File them for now (you do not need to send them anywhere yet). These two documents (fully completed) will be included in your town's first report to the U.S. Treasury.
The U.S. Department of the Treasury issued the Compliance and Reporting Guidance document (the link for this document is in the "Resources and Information" section). This guidance provides additional detail and clarification for each recipient’s compliance and reporting responsibilities under the CLFRF program, and should be read in concert with the Award Terms and Conditions, the authorizing statute, the Final Rule and other regulatory and statutory requirements.
You can always find all newly released information and updates to Treasury's documents on VLCT's ARPA webpage.
ARPA Revenue Loss Calculator [Link]- VLCT has produced a revenue loss calculator that uses the U.S. Department of the Treasury’s specific formula in the Interim Final Rule. It is designed to help communities determine if they may use a portion of their ARPA funding to replace lost revenue.
A reduction in a recipient’s General Revenue equals:
- Base Year Revenue is General Revenue collected in the most recent full fiscal year prior to the COVD-19 public health emergency.
- Growth Adjustment is equal to the greater of 4.1 percent (or 0.041) and the recipient’s average annual revenue growth over the three full fiscal years prior to the COVID-19 public health emergency.
- "n" equals the number of months elapsed from the end of the base year to the calculation date.
- Actual General Revenue is a recipient’s actual general revenue collected during 12-month period ending on each calculation date.
- Subscript "t" denotes the calculation date.
On January 6, 2022, Treasury issued its long-awaited Final Rule (overview found HERE) which guides the use of ARPA funds. It contains many changes, among them the treatment of revenue loss.
"The Final Rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation. Recipients that select the standard allowance may use that amount – in many cases their full award – for government services, with streamlined reporting requirements." (Overview page 4)
This would be "a one-time, irrevocable election to utilize either the revenue loss formula or the standard allowance." (Final Rule page 240)
May ARPA funds be used to replenish a budget stabilization fund, rainy day fund, or similar reserve account?
No. Funds made available to respond to the public health emergency and its negative economic impacts are intended to help meet pandemic response needs and provide immediate stabilization for households and businesses. Contributions to rainy day funds and similar reserves funds would not address these needs or respond to the COVID-19 public health emergency, but would rather be savings for future spending needs. Similarly, funds made available for the provision of governmental services (to the extent of reduction in revenue) are intended to support direct provision of services to citizens. Contributions to rainy day funds are not considered provision of government services, since such expenses do not directly relate to the provision of government services.
No, ARPA money does not need to be in a separate cash (bank) account. Best practice is to create a separate fund in the general ledger to more easily account for and report on these funds.
Also, any interest earned on this money may be kept by the municipality.
Yes, provided that the project is itself an eligible use of funds and that the award recipients can track the use of funds in line with the reporting and compliance requirements of the Coronavirus Local Fiscal Recovery Funds/ARPA. In general, when pooling funds for regional projects, recipients may expend funds directly on the project or transfer* funds to another government that is undertaking the project on behalf of multiple recipients. To the extent recipients undertake regional projects via transfer to another government, recipients would need to comply with the rules on transfers specified in the Interim Final Rule, Section V. A recipient may transfer funds to a government outside its boundaries (e.g., county transfers to a neighboring county), provided that the recipient can document that its jurisdiction receives a benefit proportionate to the amount contributed.
* See FAQ above on "May a town/city/village transfer its ARPA funds to another entity?
Visit the Code of Federal Regulations website here: https://www.ecfr.gov/current/title-2/subtitle-A/chapter-II/part-200
ARPA funds must be obligated by December 31, 2024. Any funds not obligated by this date must be returned to Treasury.
ARPA funds must be expended by December 31, 2026. Any funds not expended by this date must be returned to Treasury.
Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.
Recipients can use ARPA funds on government services up to the revenue loss amount (in most cases in Vermont, the entire ARPA award), whether that be the standard allowance amount or the amount calculated using the above approach. Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise*. Here are some common examples, although this list is not exhaustive:
✓ Construction of schools and hospitals
✓ Road building and maintenance, and other infrastructure
✓ Health services
✓ General government administration, staff, and administrative facilities
✓ Environmental remediation
✓ Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles)
✓ No deposits into pension funds
✓ No debt service or replenishing financial reserves
✓ No satisfaction of settlements and judgments
✓ No project that conflicts with or contravenes the purpose of the American Rescue Plan Act statute (e.g., uses of funds that undermine COVID-19 mitigation practices in line with CDC guidance and recommendations) and may not be used in violation of the Award Terms and Conditions or conflict of interest requirements under the Uniform Guidance. Other applicable laws and regulations, outside of SLFRF program requirements, may also apply (e.g., laws around procurement, contracting, conflicts-of-interest, environmental standards, or civil rights).
Must my town/city/village demonstrate that reduction in revenue is due to the COVID-19 public health emergency?
In the Final Rule, any diminution in actual revenue calculated using the formula above would be presumed to have been “due to” the COVID-19 public health emergency. This presumption is made for administrative ease and in recognition of the broad-based economic damage that the pandemic has wrought.
Treasury FAQ 3.6
Pay-go infrastructure funding refers to the practice of funding capital projects with cash-onhand from taxes, fees, grants, and other sources, rather than with borrowed sums.
What provisions of the Uniform Guidance for grants apply to these funds? Will the Single Audit requirements apply?
Most of the provisions of the Uniform Guidance (2 CFR Part 200) apply to this program, including the Cost Principles and Single Audit Act requirements. Recipients should refer to the Assistance Listing for detail on the specific provisions of the Uniform Guidance that do not apply to this program. The Assistance Listing will be available on beta.SAM.gov.
Treasury FAQ 9.3
An Authorized Representative is an individual with legal authority to bind the government entity (e.g., the Chief Executive Officer of the government entity). An Authorized Representative must sign the Acceptance of Award terms for it to be valid.
Treasury FAQ 11.7
When you completed your certification to receive ARPA funds through the State of Vermont's online certification portal, you would have entered the name and contact information for your Authorized Representative as a required field.
NEUs are considered prime recipients of Treasury and States are not responsible for monitoring NEUs for compliance with use of funds.
No, however public engagement is implicit throughout the language in the Interim Final Rule (IFR):
"Implementation of the Fiscal Recovery Funds also reflects the importance of public input, transparency and accountability." In addtion, the IFR establishes certain regular reporting requirements, including requiring local governments to publish information regarding uses of Fiscal Recovery Funds (ARPA) payments in their local jurisdiciton. This means your reporting on use of funds will be open for public viewing, perhaps posted on Treasury's website and others, easily found through search engines. "These reporting requirements reflect the need for transparency and accountability." Treasury urges State and local governments "to engage their constituents and communities in developing plans to use these payments, given the scale of funding and potential to catalyze broader economic recovery and rebuilding."
From the award Terms and Conditions, item 2. "The period of performance for this award begins on the date hereof and ends on December 31, 2026." The "date hereof" is the date your Authorized Representative signed the cover page of the Terms and Conditions document.
Certain federal regulations are applicable to your ARPA award, such as Uniform Guidance (2 CFR Part 200). Section 200.425 discusses audit services and states: “A reasonably proportionate share of the costs of audits required by, and performed in accordance with, the Single Audit Act Amendments of 1996 (31 U.S.C. 7501-7507), as implemented by requirements of this part, are allowable.” If you expended funds from multiple federal grant programs in a fiscal year, each program would pay a proportionate share of the cost of the Single Audit.
Yes. Premium pay amounts paid to employees are considered wages. Employers generally must withhold federal income tax as well as social security tax and Medicare tax from employees' wages. (Employers also may have to pay federal unemployment tax on the wages.) Any payment from SLFRF/ARPA that is in the nature of compensation for services, even a one-time payment (such as a hiring "bonus"), is considered wages. More information can be found on the IRS CSLFRF (ARPA) FAQ.
Electing the standard allowance does not increase or decrease a recipient’s total allocation.
If my town/city/village takes the standard allowance for revenue loss for our whole ARPA award, then do we need to demonstrate that we had that amount in actual revenue loss?
No. Treasury presumes that revenue has been lost due to the public health emergency and recipients are permitted to use that standard allowance approach (not to exceed the award amount) to fund “government services.”
Treasury's methodology for determining the $10 million standard allowance is discussed in the final rule on page 240; presumption is on page 249.
RESOURCES AND INFORMATION
U.S. Department of the Treasury
Coronavirus State and Local Fiscal Recovery Funds (Treasury's ARPA homepage)
*** Final Rule (FR) *** - Issued January 6, 2022 - Outlines how Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) may be spent.
Grant/Award "Agreement" Documents:
Compliance and Reporting Documents & User Guides:
Compliance and Reporting Guidance - State and Local Fiscal Recovery Funds - The guidance provides details, requirements and clarification for each recipient’s compliance and reporting responsibilities.
Compliance and Reporting Guidance – Appendix 1 (table of the 66 Expenditure Categories)
- NEU and Non-UGLGs Agreements and Supporting Documents User Guide State and Local Fiscal Recovery Fund
- Project and Expenditure Report User Guide
State of Vermont
Local Fiscal Recovery Payments. The State of Vermont will distribute ARPA Coronavirus Local Fiscal Recovery Funding (local and county dollars) using these allocations.
Certification Dashboard - Local Fiscal Recovery Fund Allocations - Find your NEU RECIPIENT NUMBER (shown as "Town ID") here!
State of Vermont Recovery Plan, State and Local Fiscal Recovery Funds 2021 Report, as required by and submitted to U.S. Treasury.
ARPA Across the Country
- ICMA ARPA Local Fiscal Recovery Fund Spending Priorities Survey ICMA surveyed local government chief administrative officers (CAOs) in September 2021 about their priorities for utilizing the American Rescue Plan Act (ARPA)’s Local Fiscal Recovery Funds (FRF). Nearly 600 town, city, and county managers responded. Responses include local governments with populations ranging from less than 2,500 to over one million; two thirds came from communities of 25,000 or fewer residents, which fall under the U.S. Treasury definition of “Non-entitlement Units” (NEUs, i.e., local governments typically serving a population of under 50,000). Direct FRF recipients include counties and metropolitan citie
- National League of Cities COVID-19 Local Action Tracker (webpage) NLC and Bloomberg Philanthropies have teamed up to collect and share actions taken by local leaders in response to the COVID-19 Pandemic, including uses for ARPA funding.
- U.S. Department of the Treasury - Early Reporting Highlights – Coronavirus State and Local Fiscal Recovery Funds (October 14, 2021) - Treasury started disbursing State and Local Fiscal Recovery Funds to state, local, territorial, and Tribal government recipients on May 10, 2021. A subset of these recipients were required to submit initial reports on August 31, 2021 ("Interim Reports"). Treasury is processing these reports and will make them publicly available soon. In the meantime, this document includes some highlights from the Recovery Plan Performance Reports submitted by recipients, which include both immediate and long-term plans across eligible use categories.
Other ARPA Resources
Other Funding Sources
- Agency of Commerce and Community Development - ACCD Grant Opportunities Inventory Dec 2021 - Grant opportunities for businesses, and municipalities, both COVID specific as well as existing programs.
- Agency of Natural Resources (ANR) ARPA Funding Opportunities:
- Combined Sewer Overflow (CSO) Elimination and Abatement - The Vermont Department of Environmental Conservation will issue grants to municipalities to accelerate CSO elimination projects, allowing these projects to progress on a faster schedule and with more affordability to the ratepayers.
- Mobile Home Park Solutions - Many manufactured housing communities (also known as mobile home parks) in Vermont struggle to provide clean and adequate drinking water, wastewater, stormwater and drainage systems. This funding will provide grants to improve living conditions for people in manufactured housing communities and help residents follow Vermont’s environmental regulations. Grants can be used to complete a needs assessment, receive technical assistance, and cover construction costs necessary to implement water infrastructure solutions.
- Individual Drinking Water and Wastewater Systems - This program will provide financial assistance to residential property owners, including owner-occupied multi-family properties with up to four units, to install or repairs systems. The Agency of Natural Resources will provide ARPA funding to owner/applicant-occupied single and multi-unit residential properties that have failing or inadequate on-site water and/or wastewater systems.
- 3-Acre Stormwater - This program will help Vermont citizens and businesses follow new rules for properties with three or more acres of impervious surfaces (e.g. rooftops, paved or gravel areas) that require pollution-reducing stormwater treatment.
- Pretreatment Capacity - Funding will be available to invest in wastewater pretreatment systems that reduce high strength or incompatible waste at municipal wastewater treatment facilities.
- Village Drinking and Wastewater Initiative - This funding is now available to help municipalities develop or expand public drinking water systems and community wastewater disposal systems where this critical infrastructure is lacking. This grant funding will bridge the affordability gap, protect public health, increase affordable housing, support economic development and incentivize compact growth in Vermont’s designated villages and neighborhoods. These ARPA funds will be used in a “co-funding” model with the State Revolving Loan Funds, USDA -Rural Development support, or locally available funding. Co-funding means that ARPA funding will be used to complement other funding sources to achieve affordability. The assistance will be primarily in the form of grants, but pending eligibility determination, may include refinancing for planning, design, land purchase, or construction of active as-of-yet completed projects.
Community Engagement Resources
Resources for Your Residents
- Housing Resources for Vermonters in Need (December 2021)