American Rescue Plan Act - Fiscal Recovery Funds for Minnesota Communities - Minnesota Association of County ...
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American Rescue Plan Act Fiscal Recovery Funds for Minnesota Communities
Agenda
• ARPA funds allocation
• Program timelines
• Eligible & ineligible uses of
funds
• Deployment process
• Program monitoring, review &
reporting
2
What’s in the $1.9 Trillion Stimulus Package?
Transportation Small Business
Allocations Agriculture 3% 3%
1%
Health
6%
Stimulus COVID Response
Checks 6%
$350 billion 22%
earmarked for Expanding Tax Credits
8%
Governments Government
Education
18%
9%
Other
11%
Unemployment Source: The Wall Street Journal
Programs
13%
3
State & Local Fiscal Recovery Funds (nationwide)
States & District of Counties: $64.1 billion Metropolitan Cities: $45.6
Columbia: $195.3 billion billion
Tribal Governments: $20.0 Non-Entitlement Units of Territories: $4.5 billion
billion Local Government: $19.5
billion
Source: U.S. Department of Treasury
4
How Much Allocated to Minnesota?
Estimated $7.9 - $8.5 Billion Expected
(In Millions) Minnesota Fiscal Recovery Funds
$2,800 $2,800 Counties
Metropolitan Cities
Non-Entitlement Units of Government
Capital Projects
Funds from other ARPA Stimulus Sources
$1,100
$179 $644
$377 Source: Minnesota Management & Budget
5
ARPA Funding & Deployment Timeline
Dec. 31, 2026
Late Jul. – Dec. 31, 2024
Early Aug. Funds must
2021 be expended
Mid-Late Funds must & work
June 2021 be obligated complete
Early Deadline for
June 2021 state to
NEUs may distribute
May 10, 2021 request FRFs FRFs to
Minnesota from State NEUs
Mar. 11, 2021 receives its
US Treasury allocation of
releases Fiscal
ARPA signed guidance; Recovery
into law counties & Funds
metro areas (FRFs), along
eligible to with that for
request funds Non-
Entitlement
Units of
Government
(NEUs)
6
Fiscal Recovery Funds: Eligible & Ineligible Uses
Public Health Extraordinary Deposits to
Eligible
Negative Economic Pension Funds
Impacts Replenishing Rainy Day or
Other Reserve Funds
Premium Pay
Debt Service on Outstanding
Revenue Loss
Debt
Ineligible
Water & Sewer, Broadband
Paying Settlements or
Infrastructure Investment
Judgements
General Infrastructure*
Expenses prior to 3/3/21**
*Unless project responds to public health or negative economic impacts, or funds derived under revenue loss provision.
**Unless funds being used for premium pay retroactively back to 1/27/20.
7
Fiscal Recovery Funds: Deployment Process
As soon as you receive funds…
1. Establish a separate fund account
2. Invest funds in an effort to maximize benefit to your community
3. Calculate revenue loss for 1st of four time periods:
✓ December 31, 2021
✓ December 31, 2021
✓ December 31, 2022
✓ December 31, 2023
8
Deployment Process: Continued…
4. Identify general revenue from most recent fiscal year prior to
1/27/20 (derived from underlying economy)
Include: Exclude:
• Taxes • Utility revenue
• Current charges • Liquor store revenue
• State & local government transfers • Insurance trust revenue
• Other misc. revenues • Refunds & correcting transactions
• Debt issuance proceeds
• Investment sales
• Federal transfers
• Agency or private trust transactions
9
Deployment Process: Continued
5. Calculate counterfactual revenue
Base year revenue X [(1 + growth adjustment) ^ (n/12)]
n = # of months elapsed since end of base year
6. Leverage one of two growth adjustment factors
4.1% - OR -
Avg. annual revenue growth in 3 full fiscal years prior to 1/27/20
10Deployment Process: Continued
Take your time!
Develop a spending plan that
ensures FRFs targeted toward
programs & projects that create
greatest impact for your
community.
11The Spending Plan: How it’s Done
Assemble working team
• Departmental leads
• Elected officials
• Partnership organizations
• Community leaders
Engage constituents & stakeholders
• Community outreach
• Relationship building
12The Spending Plan: How it’s Done
Review funding considerations
• Overlapping jurisdictions
• State administered programs
• Federal administered programs
Create “ideal” wish list
• Programs & services
• Improvements & capital projects
• Payroll, etc.
13The Spending Plan: How it’s Done
Create decisioning matrix
• Evaluate preliminary expenditures to determine eligibility risk
• Prioritize each expenditure based on community impact
Determine position & finalize plan
• Refine wish list based on identified risks & opportunities
• Reprioritize projects based on funds available for use
14Fiscal Recovery Funds: Spending Plan Management
Performance
Implementation Administration Reporting
Review
15Spending Plan Management: Why?
• Federal government deployed
funds in 2 tranches to:
✓ Encourage communities to
adapt to new development &
changing demands
✓ Review how FRFs were spent
during initial 12 months
16Fiscal Recovery Funds: Required Reporting
Counties & Metropolitan Non-Entitlement Units of
Cities Local Government
• 8/31/21: Deadline to submit interim • 10/31/21: Deadline to submit first
report (receipt of funds – 7/31/21) annual report (receipt of funds –
• 10/31/21: Deadline to submit first 9/31/21)
quarterly report (receipt of funds – • Interim reporting not required
9/31/21)
• If population >250,000, then
required to submit Annual Recovery
Performance Plan
17Fiscal Recovery Funds: Final Thoughts
• You have broad flexibility relative to use
of funds
• Take time to develop a plan that
maximizes community benefits
• Create the “dream list,” then whittle
down based on eligibility risk &
community opportunities
• Seek guidance from advisors, auditors
& other independent professionals
18Let’s Talk!
19Your Presenters
Keith Dahl Todd Hagen
Municipal Advisor Senior Municipal Advisor
Ehlers Ehlers
kdahl@ehlers-inc.com thagen@ehlers-inc.com
651-697-8596 651-697-8508
All our Minnesota advisors are ready to help!
Contact us for more information.
20Important Disclosures
Ehlers is the joint marketing name of the following affiliated businesses (collectively, the “Affiliates”): Ehlers & Associates, Inc. (“EA”), a
municipal advisor registered with the Municipal Securities Rulemaking Board (“MSRB”) and the Securities and Exchange Commission (“SEC”);
Ehlers Investment Partners, LLC (“EIP”), an SEC registered investment adviser; and Bond Trust Services Corporation (“BTS”), a holder of a
limited banking charter issued by the State of Minnesota.
Where an activity requires registration as a municipal advisor pursuant to Section 15B of the Exchange Act of 1934 (Financial Management
Planning and Debt Issuance & Management), such activity is or will be performed by EA; where an activity requires registration as an
investment adviser pursuant to the Investment Advisers Act of 1940 (Investments and Treasury Management), such activity is or will be
performed by EIP; and where an activity requires licensing as a bank pursuant to applicable state law (paying agent services shown under Debt
Issuance & Management), such activity is or will be performed by BTS. Activities not requiring registration may be performed by any Affiliate.
This communication does not constitute an offer or solicitation for the purchase or sale of any investment (including without limitation, any
municipal financial product, municipal security, or other security) or agreement with respect to any investment strategy or program. This
communication is offered without charge to clients, friends, and prospective clients of the Affiliates as a source of general information about the
services Ehlers provides. This communication is neither advice nor a recommendation by any Affiliate to any person with respect to any
municipal financial product, municipal security, or other security, as such terms are defined pursuant to Section 15B of the Exchange Act of
1934 and rules of the MSRB. This communication does not constitute investment advice by any Affiliate that purports to meet the objectives or
needs of any person pursuant to the Investment Advisers Act of 1940 or applicable state law.
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