The Kentucky League of Cities submitted comments Wednesday on the interim final rule governing Coronavirus State and Local Fiscal Recovery Funds from the American Rescue Plan Act (ARPA). KLC urged the Department of the Treasury to provide additional flexibility to local governments, clarify certain language, and reconsider provisions that overstep congressional intent.
The Coronavirus Local Fiscal Recovery Fund will provide over $930 million to Kentucky cities over Fiscal Years 2022 and 2023. The interim final rule – along with subsequent responses to frequently asked questions (FAQs) and additional guidance documents – outlines eligible uses, restrictions, and reporting requirements for ARPA funding.
After many discussions with Kentucky city officials over the two months since Treasury published the rule, KLC advocated for several changes through the public comment process. The League’s comments argued Treasury should:
- Include utility revenues in the city’s revenue loss calculation;
- Allow a city to account for tax or fee increases implemented to reduce or eliminate a pandemic-related shortfall;
- Use fiscal year data instead of calendar year numbers in the revenue loss calculation;
- Expand the definition of unserved and underserved areas for broadband access and allow wireless broadband projects;
- Reconcile different FAQs that address starting a project and obligating funds; and
- Clarify that cities can transfer ARPA funds to other cities if the transferee will cover eligible expenditures within the grantee’s jurisdiction.
Even though Treasury continues to update guidance and will review many public comments, ARPA required the department to disburse funds to states and entitlement communities two months ago. The state’s nine entitlement communities – Ashland, Bowling Green, Covington, Elizabethtown, Henderson, Hopkinsville, Lexington, Louisville, and Owensboro – have already received their first half of funding. Non-entitlement communities will receive their first tranche this month from the Department for Local Government (DLG). The second tranche will come roughly 12 months after the cities received their first payment.
The public comment period on the interim final rule runs through Friday, July 16. Anyone may submit comments here.