The U.S. Department of the Treasury released on Monday long-awaited guidance and allocation figures for state, tribal, and local governments as part of the American Rescue Plan Act (ARPA). Kentucky cities can receive a combined $931 million over the next two years through the State and Local Fiscal Relief Recovery Fund to cover lost revenues and pandemic-related expenditures.
The nine Kentucky Community Development Block Grant (CDBG) entitlement cities designated by the act – Ashland, Bowling Green, Covington, Elizabethtown, Henderson, Hopkinsville, Lexington, Louisville, and Owensboro – will receive over $607 million. Those cities can request their first tranche of funds (half of the total allocation) from Treasury here.
All other Kentucky cities will receive about $324 million and will access their funds through the Department for Local Government (DLG). DLG has until June 9, 2021, to allocate the cities portion. Although DLG will finalize city allocations, KLC has calculated the amounts for each Kentucky city based on the state’s allotment and 2019 population estimates.
CDBG entitlement cities may access half of their allocation now, while all other cities will access their funds through DLG within the next 30 days. The second half of each allocation will be available approximately 12 months later. However, funds can cover expenditures through December 31, 2024.
Recipients may use these funds in a variety of ways. Broadly, cities can support public health expenditures; address negative economic impacts caused by the public health emergency; replace lost public sector revenue; provide premium pay for essential workers; and invest in water, sewer, and broadband infrastructure. Within these overall categories, recipients have broad flexibility to decide how best to use this funding to meet local needs.
KLC continues to review the 151-page interim final rule and will provide responses to questions from member city officials.