ARPA final rules get cities’ attention

Final ruling on American Rescue Plan Act funds says $10 million may be used for lost public sector revenue

TULARE COUNTY – Almost a year after President Joe Biden passed the American Rescue Plan Act (ARPA), the guidelines for how to spend the $1.9 trillion have finally been set in stone.

States, cities and counties have already had the first half of their ARPA allotments in-hand for over six months, and many have made spending plans already, as the funds have to be spent by the end of 2024. But the final rules on how that money could legally be spent were only released as of Jan. 6, 2022.

A significant change in the final rules is the ability to allocate up to $10 million in ARPA funds towards lost public sector revenues. Prior to the release of the final guidance, there was a calculation done to determine how much money could be allocated for lost public sector revenue. For most of the cities in Tulare County, that equated to much less than $10 million.

Exeter City Administrator Adam Ennis said the final rules on the lost revenue provisions have prompted discussions about reassessing how the city’s $2.5 million in ARPA funds should be spent.

“We could actually put all of our funding in the [lost revenue] category, and that makes it a lot more flexible on where that money can go,” Ennis said.

ARPA funds allocated to the lost public sector revenue category can be placed into the general fund, which frees those dollars from many of the limitations ARPA places on spending. What they cannot be used for, however, is to settle debt, pay pensions or add to reserves.

The city of Tulare is also taking the rule change into consideration, and will discuss the matter at their Feb. 15 council meeting.

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