On Monday, the Treasury Department released information to states about distributing federal funds to non-entitlement unit (NEU) cities under the American Rescue Plan Act (ARPA). We do not know the state’s timeline to begin distributing funds or the exact amount that each non-entitlement city will receive, but we do know how each city’s allocation is calculated and what information cities need to provide to receive funds through the state.

What do cities need to provide to the state?

In the coming weeks, the state will communicate via email to each non-entitlement city requesting the following information:

• City’s name, Taxpayer Identification Number, DUNS number, and address
• Authorized representative’s name, title, and email
• Contact person’s name, title, phone, and email
• Financial institution information (routing and account number, financial name, and contact information)
• Total budget (defined as the annual total operating budget, including general fund and others in effect as of January 27, 2020)

In addition, each city will be required to read and sign:

• The award terms and conditions agreement (as provided by Treasury to be signed)
• Assurances of compliance with Title VI of the Civil Rights Act of 1964 (as provided by the Treasury to be signed)

It is imperative that your city provide each piece of required information to the state. Failure to provide the correct information may delay your ARPA allocation.

How are cities’ allocations determined?

The Treasury Department is not providing an exact allocation amount for non-entitlement cities. The state is required to use the following formula to calculate each non-entitlement city’s allocation:

(Total population of the NEU/Total population of all eligible NEUs)*Aggregate state NEU payment

Additionally, each city’s allocation is capped at 75% of their most recent budget as of January 27, 2020.

Each city’s allocation will be distributed in two tranches:

1. The first tranche will be distributed this year; and
2. The second tranche will be distributed in 2022, roughly 12 months after the first tranche is distributed.

When will cities begin to receive their ARPA allocation?

We do not know exactly when cities will begin to receive their ARPA allocation. The state has 30 days from when the state receives federal funds to distribute each city’s allocation. However, the state can request an extension of an additional 30 days to distribute funds.

Do cities have to accept federal funds?

Cities are not required to accept federal funds under ARPA. There will be a separate process in place for cities to decline their award. However, we encourage cities to wait to make this decision until after considering terms and conditions, reporting requirements, and other aspects of the ARPA program.

What are the next steps?

At this time, cities need to wait to hear from the state about the process to receive their federal allocation. We encourage cities to review the Interim Final Rule outlining how funds can be spent. Additionally, cities can review the following resources:

• Treasury FAQs on the Interim Final Rule
• Non-entitlement Unit of Local Government Checklist for Requesting Initial Payment
• Treasury Guidance for Non-Entitlement Units of Local Government

AWC continues to work closely with the state and NLC to respond to your questions and concerns. If your city has any questions regarding ARPA, please contact Peter King or Jacob Ewing.