News
Cities, counties can use up to $10M in ARPA funds to replace lost revenue
Posted on March 24, 2022
Originally published in the Times Daily.
Mayor David Grissom said he’s pleased with the most recent rule about how cities and counties can spend money they received through the American Rescue Plan Act.
The new rule states cities and counties can use up to $10 million in ARPA funds to replace “lost revenue” due to the coronavirus pandemic, without having to calculate those losses, as was required under previous rules.
The new rule was part of a discussion during Wednesday’s Northwest Alabama Council of Local Governments’ board meeting at the A.W. Todd Center.
Attorneys Ryan Robichaux and Jonathan Wohlwend gave a Powerpoint presentation about ARPA funding.
Wohlwend said ARPA money designated for lost revenue can be moved into a city or county’s general fund and used for general government business.
Grissom said being able to declare ARPA funds as “lost revenue” is a benefit to a small town like Russellville.
The city received $1,156,181 in September 2020, Grissom said, and will receive a second payment in the same amount around May for a total of $2,312,363 in ARPA funding.
“The only money that the city has spent of these ARPA monies so far is premium pay for our employees,” he said.
Grissom said the city is paying a total of $6,000 to full-time employees and $3,000 to part-time employees. So far, employees have received half of the total $358,474 set aside for premium pay.
Robichaux said $350 billion of the $1.9 trillion in ARPA funds went to state and local governments.
The money passed down to cities and counties could be used for premium pay for employees, replacing lost revenue due to the pandemic, public health expenses, water and sewer improvements, and broadband expansion.
“If you have lost revenue, ARPA can be used to replace that,” Robichaux said.
He said a city or county could calculate its losses through a formula, or claim it all as lost revenue, up to $10 million.
Grissom said the city will utilize its remaining ARPA funds for general fund expenses.