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Coronavirus State and Local Fiscal Recovery Funds Offer $350 Billion for Community Improvements

On May 10, 2021, the United States Department of the Treasury (Treasury) announced the launch of the Coronavirus State and Local Fiscal Recovery Funds, established by the American Rescue Plan Act (ARPA) of 2021, to provide $350 billion in emergency funding for eligible state, local, territorial, and Tribal governments.

How is the $350 billion in funding allocated?

Funding from the Coronavirus State and Local Fiscal Recovery Funds is subject to the requirements specified in the Interim Final Rule adopted by the Treasury on May 17, 2021. Recipients have broad flexibility deciding how best to use this funding to meet their community needs; however, the funds must be used in one of the four ARPA-specified use categories:

  1. To respond to the public health emergency or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries (e.g. tourism, travel, and hospitality)
  2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers
  3. For the provision of government services to the extent of the reduction in revenue due to the COVID-19 public health emergency relative to revenues collected in the most recent full fiscal year prior to the emergency
  4. To make necessary investments in water, sewer (including sanitary and storm), or broadband infrastructure.

The $350 billion available has been allocated to nearly 19,000 municipal governments as follows:

  • $195.3 billion available for states and the District of Columbia
  • $65.1 billion for counties
  • $45.6 billion for metropolitan cities (population > 50,000)
  • $19.5 billion for cities with population <50,000 (referred to as Non-Entitlement Units of Local Government)
  • $24.5 billion for Tribal Governments and Territories

Cities with a population >50,000 and all states and counties, regardless of size, will receive funds directly from the Treasury. The Treasury is now accepting requests through the Treasury Submittal Portal.

Cities with a population < 50,000 will receive funding through their applicable state government.

This money is grant funding, not a loan, with no repayment or interest required. Funds must be obligated by December 31, 2024 and the performance period will run until December 31, 2026. Notably, the National Environmental Policy Act (NEPA) does not apply to the Treasury’s administration of the funds, allowing for quicker project timelines.

What types of projects are eligible for Fiscal Recovery Funds?

Project eligibility for this funding generally aligns with the eligibility rules established under the the Drinking Water State Revolving Fund (DWSRF) and the Clean Water State Revolving Fund (CWSRF).

Under DWSRF, eligible project categories include:

  • Treatment
  • Transmission and distribution (including lead service line replacement)
  • Source rehabilitation and decontamination
  • Storage
  • Consolidation into a regional community water system
  • New systems development

Under CWSRF, eligible project categories include:

  • Construction of publicly-owned treatment works
  • Nonpoint source pollution management
  • National estuary program projects
  • Decentralized wastewater treatment systems
  • Stormwater systems
  • Water conservation, efficiency, and reuse measures
  • Watershed pilot projects
  • Energy efficiency measures for publicly-owned treatment works
  • Water reuse projects
  • Security measures at publicly-owned treatment works
  • Technical assistance to ensure compliance with the Clean Water Act

Interested in learning more?

Water, wastewater, and stormwater infrastructure projects are core Trihydro service areas, and we routinely assist clients with DWSRF and CWSRF projects. Contact our team today if you are interested in exploring Fiscal Recovery Funding. We can help you navigate the application process and initiate project planning.


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Karla Greaser, P.E.
Civil Engineer, Laramie, WY

Karla is a licensed professional engineer with over 15 years of civil engineering experience working with municipal clients on water distribution, sanitary sewer, storm drain, and street design projects.
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