American Rescue Plan Act funding will help communities respond to and recover from the pandemic
As the application timeframe to access your township's allocation of American Rescue Plan Act funding narrows (there is still time to apply if you have not already done so!) and townships begin to turn to how to best put the funds to use, and the Oct. 31 "projects and expenditures" reporting deadline, MTA continues to provide information, guidance and resources for our townships as we all navigate this new program.
Guidance and resources for townships
- U.S. Treasury Compliance and Reporting Guidance
- NEW! MTA FACT SHEET: Clarifying ARPA Premium Pay Options
- MTA FACT SHEET: How Can Townships Use American Rescue Act Funds?
- Revenue loss is a hugely flexible use for ARPA funds! State Treasury recommends that ALL township run their revenue loss (even if you think you didn't lose revenue due to COVID), as it is likely, based on the formula that you will have loss. ARPA funds can then be used for most current government services, to the extent of the loss. Three revenue loss calculators are available from the National Association of Towns and Township, Government Finance Officers Association and Michigan Government Finance Officers Association.
All townships that have requested ARPA funds must have a "Federal Procurement Conflict of Interest Policy" in place. The policy applies when procuring goods (apparatus, supplies, materials and equipment), services, and construction or repair projects funded in part or whole with federal financial assistance (direct or reimbursed), and also prohibits the receiving of gifts from suppliers, contactors, etc. for such purchases or projects. If your township has not already adopted such a policy, we recommend that you do so at your next upcoming board meeting. A sample policy is available here (a Microsoft Word version is also available).
Communities with Qualified Census Tracts have additional uses for ARPA funds to help offset impacts of the pandemic on certain populations, including low-income communities. A listing of all townships with QCTs is available here.
Application tutorials and guidance: Need some help preparing for the application process? Check out this brief video from MTA's Director of Member Information Services, Mike Selden, on the forms and information you'll need ready to apply for ARPA funds. MTA resources also include: MTA video, with Meridian Charter Township (Ingham Co.) Finance Director Miriam Mattison: Instructions guide, created by Chocolay Charter Township (Marquette Co.) Manager Bill De Groot; and Michigan Department of Treasury application video instructions and written instructions
- Michigan Department of Treasury guidance on calculation pre-pandemic (top-line) budget
- Tips for Townships from Michigan Department of Treasury as you apply to accept ARPA funding
Watch NOW! MTA Q&A: What We Know Now about American Rescue Plan Funding (recorded on July 15)
Download the handouts from the webinar here.
Special thanks to our Q & A Sponsors!
More than 97% of Michigan townships have applied to access their American Rescue Plan funds
As of early September, more than 97% of Michigan's "non-entitlement unit" townships (those under 50,000 population) had submitted their application documentation to access COVID relief funding through the American Rescue Plan Act. The remaining townships are still able to submit their application through the state Department of Treasury's online application system, though we are not certain for how much longer. If you have already started the application process in the state's online portal, please continue to complete your application.
State Treasury has begun its review the applications. If a township’s submission has no errors, Treasury will send letters to those NEUs in September indicating if the state application is approved. If a township’s application however is incomplete or contains errors, the state’s contracted auditor will begin contacting NEUs late next week to review identified items needed for resubmission. A letter explaining both the errors and resubmission process will follow. Treasury expects payments to begin in mid-September to NEUs with approved submissions. You can check your township’s ARPA application status on Treasury's webpage by viewing Treasury’s “NEU Status” spreadsheet.
How townships apply
To request the funding, townships must log on to Treasury's Elite system portal and select "ARPA CLFRF Request." If you do not have a login for the system, select "Request Access New User."
State Treasury's ARPA website (www.michigan.gov/arpa) outlines the information and documents needed to apply for your township's allocation. All application documents must be saved as PDFs and uploaded during the submission process. The data entered into the ELITE system must match the data entered on all forms or your submission will be denied (i.e., chief administrative officer name does not match), and resubmission will be required.
In addition to an authorized township representative (the supervisor or manager), and a contact person and contact information, the township must also submit:
2) A Funding Election and Budget Certification Form (Form 5751) to elect to receive funding and certify your township's pre-pandemic budget amount. Townships also have two additional options on the form: Option 2, decline the funding and request it be sent back to the state, or Option 3, choose neither, which allows Treasury to reallocate the funding to other applicable NEUs. MTA strongly encourages all townships to request their allocation, but if you choose not to accept, please consider selecting Option 3 so the funding remains at the local level. Option 2 returns the money to state coffers for the Legislature to determine funding priorities through the typical state budget appropriation process.
3) Award Terms and Conditions Agreement (completed by the supervisor, as "chief administrative officer" of the township, or manager if the township has one) A version of this form with active links is available here.
4) Assurances of Compliance with Title VI of the Civil Rights Act of 1964 (completed by the supervisor, as "chief administrative officer" of the township, or manager if the township has one)
5) Pre-pandemic budget amount (top-line budget) as of Jan. 27, 2020. This includes all budgeted expenditures (including other financing uses) for the general, special revenue, debt service, capital projects and permanent funds, including transfers out for enterprise funds. This calculation includes all governmental and enterprise funds, but excludes internal service and fiduciary funds. Allocations are based on this amount, with a maximum up to 75%. Treasury Numbered Letter 2021-5 outlines what can be included in this budget figure. Townships are required to maintain a back-up copy of budget documentation.
6) Active free SAM.gov account on the Federal System for Award Management (SAM.gov accounts must be renewed annually)7) Verify your township's banking information in the State Accounting System (SIGMA). This is the system by which townships receive their revenue sharing payments from the state
The funding has very broad flexibility for its uses and does not have to be obligated until Dec. 31, 2024. The funds will be helpful in shoring up, expanding or simply funding your local services. State Treasury, for example, believes that most local units of government-using the formula for revenue loss-will have demonstrable lost revenue due to the pandemic. By showing lost revenue, your township can use the funds on most current township services, to the extent of that loss.It is important to remember that the funding will be delivered in two tranche payments: the first now, and the second no later than a year after the initial allocation—so likely summer 2022.
Michigan Department of Treasury ARPA Webinar and Presentation
National Association of Towns and Townships webinar recording: Guidance on ARPA's State and Local Fiscal Recovery Funds
The National Association of Towns and Townships (NATaT) hosted a webinar offering guidance on the American Rescue Plan Act's pandemic relief resources for townships. This video will help you understand how local fiscal recovery funds can be accessed and spent. MTA will be hosting additional webinars and will continue to share information as it becomes available.
Inside the ARPA
The ARPA contains $1.9 trillion for the coronavirus relief package with $350 billion allocated for state, local and tribal governments to mitigate the fiscal impacts of the COVID-19 pandemic and provide vital services. Local governments can use ARPA funds to cover costs incurred by Dec. 31, 2024, to:
• Provide government services affected by a revenue reduction during the pandemic (in the most recent full fiscal year prior to the emergency); thus, a local unit may use the money to replace the amount of revenue lost during the pandemic compared to the prior full fiscal year
• Make necessary investments in water, sewer and broadband infrastructure
• Respond to the COVID-19 emergency and address its negative economic impacts, including aid to households, small businesses, nonprofits, and industries such as tourism and hospitality
• Provide premium pay-up to $13 an hour or $25,000 per worker-in additional wages for essential employees performing an essential function in the pandemic
The ARPA prohibits the use of the funds for pension or to offset revenue loss due to a tax cut.
The ARPA also includes $10 billion to states for a Critical Infrastructure Projects Program, with Michigan expected to receive $250 million. The monies are to be used for projects that would directly enable work, education and health monitoring-including remote options-in response to COVID-19. Examples provided during the legislative discussion included water, sewer and broadband.