Guide to Local Recovery Update: Nov. 1

Nov 1, 2023

Cities must “obligate” their State and Local Fiscal Recovery Funds before the end of 2024. Those that don’t will need to return the funding to the U.S. Department of the Treasury. Deadlines for key housing/infrastructure, water workforce development, and diesel engine replacement grant programs are also approaching.  

Key ARPA deadline approaching 

The long runway to allocate funds under the State and Local Fiscal Recovery Funds program comes to an end next year. If a city does not “obligate” funds by the end of 2024, it must return the funding to the U.S. Department of the Treasury.

Budgeting the funding is not enough per the Treasury Department’s rules. Cities need to place an order for property or services that require payment. In the case of payroll, grantees must follow state and local established practices.

Cities with a starting date of Jan. 1 for their fiscal year realistically have little over a month to obligate their funds. Although funding must be obligated before Dec. 31, 2024, cities can spend the money well into 2026. More information and helpful tips are available in a recent NLC article. 

HUD program helps accelerate housing and infrastructure projects 

Federal officials outlined how the Thriving Communities Technical Assistance program can help under-resourced cities accelerate housing and infrastructure projects in a recent blog post. The program helps cities ensure housing needs are considered as part of their larger infrastructure plans. Cities can receive assistance in the following areas: land utilization, regulatory reform, affordable housing preservation, and coordination. 

The U.S. Department of Housing and Urban Development is accepting applications for the program on a rolling basis. Priority will be given to jurisdictions with populations under 250,000. 

Funding available for water workforce development and diesel engine replacement  

The U.S. Environmental Protection Agency (EPA) is seeking applications for a water workforce development program. Somewhere between 30 and 50% of the nation’s water workforce is expected to retire by 2027. Water and wastewater treatment utility workers are central to community public health, environmental, and economic well-being, making this growing shortage even more concerning. 

Funded by the Inflation Reduction Act, the program supports a wide range of local initiatives. This includes targeted internship programs, regional workforce development partnerships, leadership development, training programs, and education programs. Applications are due Nov. 17. 

The EPA is also accepting applications for two clean air programs. The Clean School Bus Rebates program helps replace existing school buses with clean and zero-emission buses. The application process is different from previous rebate programs; potential applicants are encouraged to read the requirements and Program Guide closely. The application period ends Jan. 31. 

Applications for a program that helps transit agencies upgrade, retrofit, or replace legacy diesel fleets are due Dec. 1. Although diesel engine emissions standards have tightened, nearly eight million legacy engines are still in use. Broadly speaking, the EPA defines legacy diesel engines are those with a model year 2009 or earlier. 

Other recovery resources 

The National League of Cities (NLC) is winding down its American Rescue Plan Act office hours series. Held every Tuesday and Thursday, the program helps cities navigate State and Local Fiscal Recovery Funds requirements. The program ends on Dec. 14. 

NLC also released a list of tips for securing federal transportation grants. The list includes several helpful tips, including information on local match sources and required project deadlines. 

The Local Infrastructure Hub is holding a Nov. 28 webinar on the Inflation Reduction Act’s direct pay provisions. The rule allows tax-exempt and local governments to take advantage of tax credits for building clean energy projects for the first time.

City officials looking for additional information about the American Rescue Plan Act, Bipartisan Infrastructure Law, the Inflation Reduction Act, or additional recovery tools can visit the Cal Cities Guide to Local Recovery portal