Congress adds flexibility for municipal ARPA spending

In late December, as part of their final budget package, the U.S. Congress increased flexibility for municipalities in the use of Coronavirus State and Local Fiscal Recovery Funds from the American Rescue Plan Act.

A new provision, known as ARPA Flex, adds flexibility to the Final Rule issued by the U.S. Department of the Treasury in February 2022.

The additional approved uses include costs associated with emergency response to a natural disaster, spending on transportation infrastructure-eligible projects, including matching funds, and any program, project or service that would also be eligible under the federal Community Development Block Grant program.

The changes cap the new allowable uses at $10 million or 30% of the total grant, whichever is greater.

ARPA Flex also gives the Treasury the authority to restore administrative and technical assistance to grant recipients.

The Treasury has 60 days from the bill’s passage to finalize the details of the ARPA Flex changes, which are expected to be published in February.

MMA Executive Director Geoff Beckwith applauded the hard work of the state’s representatives in Congress as well as the National League of Cities to build support for the changes.

“The entire Massachusetts congressional delegation has consistently advocated for federal funds through the American Rescue Plan Act, recognizing the importance of supporting cities and towns in their recovery from the pandemic,” he said. “We greatly appreciate their leadership in gaining this additional flexibility, which will make a very real difference for Massachusetts communities.”

The law adding the ARPA flexibility was signed by President Joe Biden on Dec. 29.