Preliminary Guidance on How American Rescue Plan Funds may be Used

Based on guidance that has been provided from the United States Department of the Treasury, the Town is anticipated to receive a cumulative total of $5,227,178.00 in Coronavirus State and Local Fiscal Recovery Funds.

• The Town has recently received the first round of funding under this appropriation of approximately $2.6 million and expects to receive the remaining 50 percent of its allocation sometime around May of 2022.

The United States Department of Treasury has also issued some preliminary guidance on how these funds may be potentially utilized. A "Fact Sheet" was issued by the United States Department of the Treasury on May 10, 2021.

The stated goals that have been outlined under this program are to address concerns within the following areas:

• Support urgent COVID-19 response efforts to continue to decrease spread of the virus and bring the pandemic under control;
• Replace lost public sector revenue to strengthen support for vital public services and help retain jobs;
• Support immediate economic stabilization for households and businesses; and,
• Address systemic public health and economic challenges that have contributed to the unequal impact of the pandemic on certain populations.

Additional guidance has also been recently published that helps to further understand how the funds received under this program may be authorized in order to address the concerns highlighted above. The following are a list of categories that have been initially identified as being eligible uses:

• Support public health expenditures, by funding COVID-19 mitigation efforts, medical expenses, behavioral healthcare, and certain public health and safety staff;
• Address negative economic impacts caused by the public health emergency, including economic harms to workers, households, small businesses, impacted industries, and the public sector;
• Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenues experienced due to the pandemic;
• Provide premium pay for essential workers, offering additional support to those who have born and will bear the greatest health risks because of their service in critical infrastructure sectors; and,
• Invest in water, sewer, and broadband infrastructure, making necessary investments to improve access to clean drinking water, support vital wastewater and stormwater infrastructure, and to expand access to broadband internet.

Treasury's guidance in expending these funds has also stated that there are certain expenditures that will not be eligible with these funds. Those include using the funding to directly offset or to reduce/cut taxes or to make a deposit to a pension fund.

It is important to note that timing requirements have been incorporated into this legislation as well. A recipient of funding under this program must obligate 100 percent of the funding that it has received by December 31, 2024 and must have 100 percent of these funds expended by December 31, 2026. The covered period for any activity to be deemed eligible must have taken place or will take place between March 3, 2021 and December 31, 2024.

Resources

Questions?

Contact our Finance Director, John Troyer, at JohnTr@hiltonheadislandsc.gov or 843-341-4650.