CSLFRF Eligible Use FAQs

General Questions

Question

Guidance Review

Source/Reference in Treasury Guidance

What is the covered period for all provisions?

Although the eligible uses of payments from the Fiscal Recovery Funds are all prospective in nature, Treasury considers the beginning of the covered period for purposes of determining compliance with section 602(c)(2)(A) to be the relevant reference point for this purpose. The Interim Final Rule thus permits funds to be used to cover costs incurred beginning on March 3, 2021.

However, with respect to premium pay the definition clarifies that premium pay may be provided retrospectively for work performed at any time since the start of the COVID-19 public health emergency, where those workers have yet to be compensated adequately for work previously performed. Treasury encourages recipients to prioritize providing retrospective premium pay where possible, recognizing that many essential workers have not yet received additional compensation for work conducted over the course of many months.

See p. 27 of the Interim Final Rule

Do funds have to be expended by December 31, 2024 or obligated by December 31, 2024?

Use of funds.

  • In General. A recipient may only use funds to cover costs incurred during the period beginning March 3, 2021, and ending December 31, 2024, for one or more of the purposes enumerated in sections 602(c)(1) and 603(c)(1) of the Social Security Act, as applicable, including those enumerated in section § 35.6 of this subpart, subject to the restrictions set forth in sections 602(c)(2) and 603(c)(2) of the Social Security Act, as applicable.
  • Costs incurred. A cost shall be considered to have been incurred for purposes of paragraph (a) of this section if the recipient has incurred an obligation with respect to such cost by December 31, 2024.
  • Return of funds. A recipient must return any funds not obligated by December 31, 2024, and any funds not expended to cover such obligations by December 31, 2026.

See p. 36 of the Interim Final Rule

The definition of the word “incurred” will be critical for any long-term investments like this. How does US Treasury define “incurred?”

A cost shall be considered to have been incurred for purposes of paragraph (a) of this section if the recipient has incurred an obligation with respect to such cost by December 31, 2024.

See p. 36 of the Interim Final Rule

Are there any prohibitions on using funds for undocumented immigrant individuals or families?

The Treasury has not addressed this in the guidance.

Do you know yet if the eligible cost would be the same for NEUs as for EUs?

Generally, the understanding is that the eligible uses will be the same and apply to all funding.

Is there a contact if we have specific revenue calculation questions?

Questions to Treasury should be directed to SLFRP@treasury.gov.

Can you define “obligated”?

Obligation means an order placed for property and services and entering into contracts, subawards, and similar transactions that require payment.

See p. 35 of the Interim Final Rule

Can the authorizer be Finance Director or does it have to be Mayor or City Manager?

An Authorized Representative is an individual with legal authority to bind the government entity (e.g., the Chief Executive Officer of the government entity).  An Authorized Representative must sign the Acceptance of Award terms for it to be valid.

See question 11.7 in Treasury's FAQ

Tracking all of this will take a lot of time. Can we use the funds towards administrative costs?

In the context of using funds for administrative purposes, FAQ 10.2 states, “Recipients may use funds to cover the portion of payroll and benefits of employees corresponding to time spent on administrative work necessary due to the COVID–19 public health emergency and its negative economic impacts. This includes, but is not limited to, costs related to disbursing payments of Fiscal Recovery Funds and managing new grant programs established using Fiscal Recovery Funds”.

See question 10.2 in Treasury's FAQ

What personal information is required to submit the request?  Do you have to provide a scan of your driver's license to ID.me?

The majority of GFOA members have noted most often SSN, driver’s license and facial scan.

Can the funds be invested? If so, can the investment revenue be transferred to the General Fund?

Treasury has not provided guidance on the investment of these proceeds and how investment earnings may be spent. GFOA will be commenting on this in response to the IFR to the US Treasury.

Treasury has noted that CRF rules apply in ARPA circumstances (except for covered payroll). Treasury is not specific on where and how to place funds. However, GFOA recommends refraining from spending investment earnings until we hear definitive guidance on whether it is subject to the ARPA regulations or not.

See question 10.3 in Treasury's FAQ

Does the person that request funds through the Treasury's portal also need to be listed in our SAM.gov account?  Or can it be someone different?

The two can be different. The administrator of the accounts is simply the person who is administrative responsible for receiving communications from the treasury and dispatching as necessary.

Where can we find the Census data?

Please click here.

Questions on Section A: Public Health and Negative Economic Impacts

Question

Guidance Review

Source/Reference in Treasury Guidance

Can funds be used to reimburse recipients for costs incurred prior to the enactment of the American Rescue Plan in terms of costs associated with responding to the pandemic and its negative economic impacts?

Use of Fiscal Recovery Funds is generally forward looking. The Interim Final Rule permits funds to be used to cover costs incurred beginning on March 3, 2021.

See question 2.7 in Treasury's FAQ

May recipients presume the use of funds allowable under the Coronavirus Relief Fund to respond to the pandemic are also allowed under the CSLFRF?

Generally, funding uses eligible under CRF as a response to the direct public health impacts of COVID-19 will continue to be eligible under CSFRF/CLFRF, with the following two exceptions: (1) the standard for eligibility of public health and safety payrolls has been updated; and (2) expenses related to the issuance of tax-anticipation notes are not an eligible funding use.

See question 2.2 in Treasury's FAQ

What are considered eligible expenditures in regard to containing/mitigating the spread of COVID-19?

Services and programs to contain and mitigate the spread of COVID-19 including:

  • Vaccination program
  • Medical expenses
  • Testing
  • Contact tracing
  • Isolation or quarantine
  • PPE purchases
  • Support for vulnerable populations to access medical or public health services
  • Public health surveillance (e.g., monitoring for variants)
  • Enforcement of public health orders
  • Public communication efforts
  • Enhancement of healthcare capacity, including alternative care facilities
  • Support for prevention, mitigation, or other services in congregate living facilities and schools
  • Enhancement of public health data systems
  • Capital investments in public facilities to meet pandemic operational needs
  • Ventilation improvements in key settings like healthcare facilities

See page 3 of Treasury's Fact Sheet

Can recipients claim public health and public safety payroll costs with the funds?

Yes. Payroll and covered benefits expenses for public health, healthcare, human services, public safety and similar employees, to the extent that they work on the COVID-19 response. For public health and safety workers, recipients can use these funds to cover the full payroll and covered benefits costs for employees or operating units or divisions primarily dedicated to the COVID-19 response.

See page 4 of Treasury's Fact Sheet

Can funds be used for mental health services?

Yes. Services to address behavioral healthcare needs exacerbated by the pandemic include:

  • Mental health treatment
  • Substance misuse treatment
  • Other behavioral health services
  • Hotlines or warmlines
  • Crisis intervention
  • Services or outreach to promote access to health and social services

See page 4 of Treasury's Fact Sheet

What community programs can the funding be used for? (e.g. innovative assistance)

Assistance to households or populations facing negative economic impacts due to COVID-19 is also an eligible use. This includes: food assistance; rent, mortgage, or utility assistance; counseling and legal aid to prevent eviction or homelessness; cash assistance; emergency assistance for burials, home repairs, weatherization, or other needs; internet access or digital literacy assistance; or job training to address negative economic or public health impacts experienced due to a worker’s occupation or level of training.

See p. 9 of the Interim Final Rule

What about ventilation for a public building?

Ventilation improvements in congregate settings is an eligible use under Section A.

See question 2.1 in Treasury's FAQ

Can we apply funds to transit since it provides access to medical/public health services?

Emergency medical response expenses, including emergency medical transportation related to COVID-19” is an eligible expense under Section A.

See p. 36 of the Interim Final Rule

Can the funds be used to deposit into a housing fund?

IFR p. 10-11 addresses investing in Housing and Neighborhoods to build stronger communities as an eligible use of the funds under Section. A. This is in the context of addressing those disproportionately impacted by the pandemic. It is not clear if storing funds in a housing fund is eligible, however, funds may be used on services to address homelessness, affordable housing development, housing vouchers, residential counseling, or housing navigation assistance.

See p. 10-11 of the Interim Final Rule

Under mitigating COVID-19, would building an EOC or updating tech in an existing EOC be eligible?

In the context of responding to the public health emergency, an emergency operations center would be an eligible use under Section A.

Are planning processes or development of resilience plans an eligible use for addressing socioeconomic disparities?

"State, local, and Tribal governments may use payments from the Fiscal Recovery Funds to engage in planning and analysis in order to improve programs addressing the COVID-19 pandemic, including through use of targeted consumer outreach, improvements to data or technology infrastructure, impact evaluations, and data analysis," (IFR p. 6).

See p. 6 of the Interim Final Rule

Can funds be used to hire additional staff to help with administration of these funds?

Staffing is an eligible expense under the condition it is related to COVID-19. Therefore, hiring additional staff to assist with the administration of the funds would be an eligible use. Please note staff can only be hired up to the government’s pre-pandemic level of staffing (number of employees employed on January 27, 2020).

See p. 10 of the Interim Final Rule

Can we use the funds for the purchase of sanitation equipment (garbage trucks) and/or public safety equipment (police and fire vehicles)?

Sanitation equipment is an eligible use. Under Section A, “Expenses related to COVID-19 vaccination programs and sites, including staffing, acquisition of equipment or supplies, facilities costs, and information technology or other administrative expenses,” (IFR p. 36)

Public safety equipment is an eligible use. Under Section C, government services include the provision of police, fire, and other public safety services. (IFR p. 16).

See p. 16 and 36 of the Interim Final Rule

Can the funds be used to cover the payroll and benefit costs for all public safety police officers or is it only if they were assigned to pandemic tasks?

“For administrative convenience, the recipient may consider public health and safety employees to be entirely devoted to mitigating or responding to the COVID-19 public health emergency, and therefore fully covered, if the employee, or his or her operating unit or division, is primarily dedicated to responding to the COVID-19 public health emergency,” (IFR p. 6).

See p. 6 of the Interim Final Rule

Is Negative Economic Impact limited to expenditures beginning 3/3/2021?

That is correct.

See question 2.7 in Treasury's FAQ

Questions on Section B: Premium Pay

Question

Guidance Review

Source/Reference in Treasury Guidance

What is the definition of premium pay?

PREMIUM PAY —The term ‘premium pay’ means an amount of up to $13 per hour that is paid to an eligible worker, in addition to wages or remuneration the eligible worker otherwise receives, for all work performed by the eligible worker during the COVID–19 public health emergency. Such amount may not exceed $25,000 with respect to any single eligible worker.

See p. 13 of the Interim Final Rule

Can Premium Pay be applied retroactively? If so, how far back can we go to retro premium pay?

Yes. Treasury encourages recipients to consider providing premium pay retroactively for work performed during the pandemic, recognizing that many essential workers have not yet received additional compensation for their service during the pandemic. January 27, 2020 is the date referenced as the start of the COVID-19 public health emergency.

See question 5.3 in Treasury's FAQ

Who would be considered eligible workers for premium pay?

Such workers include:

  • Staff at nursing homes, hospitals, and home-care settings
  • Workers at farms, food production facilities, grocery stores, and restaurants
  • Janitors and sanitation workers
  • Public health and safety staff
  • Truck drivers, transit staff, and warehouse workers
  • Childcare workers, educators, and school staff
  • Social service and human services staff

See p. 12 of the Interim Final Rule

Would positions like payroll, AP, IT, covid team be eligible for premium pay since they are essential to our operations even though they may not have direct contact with the public?

The interim final rule requires that “eligible workers have regular in-person interactions or regular physical handling of items that were also handled by others. This requirement will also help encourage use of financial resources for those who have endured the heightened risk of performing essential work,”

See p. 32 of the Interim Final Rule

Can the premium pay be paid to the City's essential workers?

The IFR gives some latitude to define essential workers, but generally are those considered critical to protect the health and well-being of residents throughout the pandemic. Keep in mind the IFR also notes that essential workers would be those who performed in-person work, i.e. not for telework performed from a residence.

See p. 13 of the Interim Final Rule

Is the $25,000 cap on Premium Pay under Section B on a yearly basis or for the entire time of 3/3/21 to 12/31/24?

The cap is for the whole covered period.

Is $13/hr the cap for premium pay? We were thinking of paying a lower amount.

Premium pay is stated to mean “an amount of up to $13 per hour that is paid to an eligible worker,” (IFR p. 13). Therefore, $13 would be the cap.

See p. 13 of the Interim Final Rule

Could premium pay be given as a bonus to public safety/public health employees versus an increase in the hourly wage?

The bill text states Premium Pay would be "in addition to wages or remuneration the eligible worker otherwise receives, for all work performed by the eligible worker during the COVID–19 public health emergency," (American Rescue Plan, Subtitle M, Section 602 and 603).

American Rescue Plan, Subtitle M, Section 602 and 603

Questions on Section C: Revenue Loss and Government Services

Question

Guidance Review

Source/Reference in Treasury Guidance

What is the fiscal year baseline?

Base Year Revenue is the recipient’s general revenue for the most recent full fiscal year prior to the COVID-19 public health emergency.

See p. 15 of the Interim Final Rule

Is my revenue loss calculated in the aggregate? Or by fund/source?

In calculating revenue loss, recipients will look at general revenue in the aggregate, rather than on a source-by-source basis. Given that recipients may have experienced offsetting changes in revenues across sources, Treasury’s approach provides a more accurate representation of the effect of the pandemic on overall revenues.

See p. 31 of the Interim Final Rule

How do I measure my lost public sector revenue?

Recipients should calculate the extent of the reduction in revenue as of four points in time: December 31, 2020; December 31, 2021; December 31, 2022; and December 31, 2023. To calculate the extent of the reduction in revenue at each of these dates, recipients should follow a four-step process:

  • Step 1: Identify revenues collected in the most recent full fiscal year prior to the public health emergency (i.e., last full fiscal year before January 27, 2020), called the base year revenue.
  • Step 2: Estimate counterfactual revenue, which is equal to base year revenue * [(1 + growth adjustment) ^( n/12)], where n is the number of months elapsed since the end of the base year to the calculation date, and growth adjustment is the greater of 4.1 percent and the recipient’s average annual revenue growth in the three full fiscal years prior to the COVID-19 public health emergency.
  • Step 3: Identify actual revenue, which equals revenues collected over the past twelve months as of the calculation date.
  • Step 4: The extent of the reduction in revenue is equal to counterfactual revenue less actual revenue. If actual revenue exceeds counterfactual revenue, the extent of the reduction in revenue is set to zero for that calculation date.

See p. 15 of the Interim Final Rule

What can I spend lost revenue on (How do you define “government services”)?

Government services can include, but are not limited to, maintenance or pay-go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.

However, expenses associated with obligations under instruments evidencing financial indebtedness for borrowed money would not be considered the provision of government services, as these financing expenses do not directly provide services or aid to citizens. Specifically, government services would not include interest or principal on any outstanding debt instrument, including, for example, short-term revenue or tax anticipation notes, or fees or issuance costs associated with the issuance of new debt.

For the same reasons, government services would not include satisfaction of any obligation arising under or pursuant to a settlement agreement, judgment, consent decree, or judicially confirmed debt restructuring in a judicial, administrative, or regulatory proceeding, except if the judgment or settlement required the provision of government services. That is, satisfaction of a settlement or judgment itself is not a government service, unless the settlement required the provision of government services. In addition, replenishing financial reserves (e.g., rainy day or other reserve funds) would not be considered provision of a government service, since such expenses do not directly relate to the provision of government services.

See p. 16 of the Interim Final Rule

Can funds be used to pay for debt services/interest?

No. Expenses related to financing, including servicing or redeeming notes, would not address the needs of pandemic response or its negative economic impacts. Such expenses would also not be considered provision of government services, as these financing expenses do not directly provide services or aid to citizens. This applies to paying interest or principal on any outstanding debt instrument, including, for example, short-term revenue or tax anticipation notes, or paying fees or issuance costs associated with the issuance of new debt.

See question 4.3 in Treasury's FAQ

What types of infrastructure can be covered?

  • For replacement of lost revenues: Government services can include, but are not limited to, maintenance or pay-go funded building123 of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.
  • Statutory allowances for infrastructure include assisting in meeting the critical need for investments and improvements to existing infrastructure in water, sewer, and broadband, the Fiscal Recovery Funds provide funds to State, local, and Tribal governments to make necessary investments in these sectors.

See p. 16-17 of the Interim Final Rule

Can the funding be used for software that reduces forms and documentation that are in paper form?

Modernization of cybersecurity, including hardware, software, and protection of critical infrastructure, is listed as an eligible use of funds for government services.

See p. 16 of the Interim Final Rule

Questions on Section D: Water, Sewer, and Broadband Infrastructure

Question

Guidance Review

Source/Reference in Treasury Guidance

Can funds be used to invest in infrastructure OTHER THAN water, sewer, and broadband projects such as roads and public facilities?

Recipients may use funds for maintenance of infrastructure or pay-go spending for building of new infrastructure as part of the general provision of government services, to the extent of the estimated reduction in revenue due to the public health emergency. A general infrastructure project typically would not be considered a response to the public health emergency and its negative economic impacts unless the project responds to a specific pandemic-related public health need (e.g., investments in facilities for the delivery of vaccines) or a specific negative economic impact of the pandemic (e.g., affordable housing in a Qualified Census Tract).

See question 4.2 in Treasury's FAQ

Can funds be used to invest in stormwater infrastructure?

With respect to wastewater infrastructure, recipients may use Fiscal Recovery Funds to construct publicly owned treatment infrastructure, manage and treat stormwater or subsurface drainage water, facilitate water reuse, and secure publicly owned treatment works, among other uses.

See p. 18 of the Interim Final Rule

Our city's flood control structure was constructed 50 years ago and now needs substantial rehabilitation to make good for the next 50 years.  Will expenditures to rehab our flood control structure qualify as eligible infrastructure under the ARP?

If a reduction of revenue has been identified as outlined in the guidance, maintenance of infrastructure is an eligible use of funds under Section C, (FAQ 3.8). Under section D’s use of funds for water and sewer, improving resilience of infrastructure to severe weather events is identified as an eligible project (IFR p. 17).

See Question 3.8 in Treasury's FAQ and p. 17 of the Interim Final Rule

I thought that Section D for eligible expenses would include more - that these 3 were just examples. Did this change?

Water, sewer, and broadband infrastructure are not examples but the only eligible areas under Section D’s use of funds. However, the "investments in" definition is very broad and allows for flexibility in a community's approach as it relates back to these three areas.

Are constructing cell towers an allowable expense under the infrastructure or broadband categories?

Yes, if the cell towers are constructed for the purpose of delivering faster Mbps speeds to households and businesses.

Can these funds be used to put in sewer and water on property the town owns?

Yes, Section D use of funds include eligible expenditures made towards improvement of water, sewer, and broadband infrastructure.

Can the city implement fiber for city buildings?

In the context of broadband infrastructure under Section D, the IFR states that recipients are encouraged to “prioritize investments in fiber optic infrastructure where feasible, as such advanced technology enables the next generation of application solutions for all communities,”

See p. 20 of the Interim Final Rule