Guide to Local Recovery update: June 23

Jun 23, 2021

Non-entitlement cities have until tonight, June 23 at 11:59 p.m., to access the American Rescue Plan Request for Fund Portal. Non-entitlement cities must access the portal to receive their first tranche of funds.

 
The California Department of Finance (DOF) plans to submit a list to the State Controller’s Office this week to disburse the funds. Those that do not make that cutoff will go in the second group. (DOF is currently targeting a mid-July second allocation schedule.) If you are having difficulties uploading your required documents, DOF has suggested the following fixes:
  • Make sure there are no special characters in the file names of your attachments.
  • Enter budget numbers as whole dollars — no decimal points.
Additionally, the League of California Cities has updated its revenue loss calculation tool, which incorporates the latest Treasury Department’s Guidance and its applicability to local government finance in California as understood by our team of finance professionals. Two versions have been prepared to support cities’ choice to use fund basis (modified accrual) or government-wide (full accrual) financial records. Eligible criteria update
In a major win for local governments, the U.S. Department of the Treasury’s new American Rescue Plan guidance expands the eligible areas for broadband infrastructure investment.  The previous definition of “unserved or underserved” areas was too restrictive and based on Federal Communications Commission data, which is not always accurate.

The new guidance stipulates that cities may invest in areas where not all households or businesses are unserved or underserved, if an objective of the project is to provide service to unserved or underserved households or businesses. Furthermore, the use of "reliably" in the provision 6.11 of the Interim Final Rule (IFR) grants cities significant discretion when assessing the actual experience of users on the ground. Finally, the new guidance states that recipients may use the funds for costly "middle mile" projects. More information is available in section 6 of the Treasury Department’s FAQ.

The latest update also includes additional clarification on points raised by multiple stakeholders, including:
  • Demonstrating negative economic impact for household and business assistance
  • Use of funds for investment in outdoor spaces
  • Use of funds to address a backlog in court cases
  • Use of funds to assist business startups
  • Use of funds to prevent and respond to crime and support public safety
  • Use of funds for pre-project development for water/sewer/broadband infrastructure
  • Treatment of federal funds in intergovernmental revenue when calculating general revenue for the purpose of identifying revenue loss
The updated document also includes an appendix with a diagram of the Interim Final Rule's definition of General Revenue within the Census Bureau's classification structure, and an FAQ focused on how funds can support a holistic approach to public safety.

New reporting guidance for metropolitan cities and webinars 
The Treasury Department released Compliance and Reporting Guidance for metropolitan cities. The guidance, which builds on the IFR issued on May 10, requires program and performance reporting to build public awareness, increase accountability, and monitor compliance of eligible uses. It provides additional details about each recipient’s compliance and reporting responsibilities under the Coronavirus State and Local Fiscal Recovery Funds.

This week, the Treasury Department will host 30-minute introductory briefings for city officials. The following sessions are still available: City officials looking for additional information about the American Rescue Plan Act and additional tools for recovery can visit the Cal Cities Guide to Local Recovery webpage.