Blending ARPA funding with debt financing
Blending or braiding ARPA funds with other sources of government funding, including debt issuance, to pursue a project is allowed. Prior to the release of last week’s Treasury FAQs, KACo had been advised that mixing ARPA funds with debt issuance was prohibited. This change in interpretation provides greater flexibility for county governments.
Partially funding projects with ARPA funds
ARPA funds may not be used to fund the entirety of a project that is partially, although
not entirely, an eligible use. However, ARPA funds may be used for a smaller component project that does constitute an eligible use, while using other funds for the remaining portions of the larger planned project that does not constitute an eligible use. In this case, the ‘‘project’’ under ARPA would be only the eligible use component of the larger project.
Loans funded under revenue loss category
If a county uses revenue loss funds to fund a loan, whether or not the maturity of the loan is after December 31, 2026, the loaned funds may be considered to be expended at the point of disbursement to the borrower, and repayments on such loans are not subject to program income rules. Similarly, any contribution of revenue loss funds to a revolving loan fund may also follow the approach of loans funded under the revenue loss eligible use category.
Non-federal matching requirements
Funds available under the revenue loss eligible use category generally may be used to meet the non-federal cost-share or matching requirements of other federal programs (except Medicaid and CHIP). If a county seeks to use ARPA funds to satisfy match or cost-share requirements for a federal grant program, they should first confirm with the relevant awarding agency that no waiver has been granted for that program, that no other circumstances would limit the use of ARPA funds to meet the match or cost-share requirement, and that there is no other statutory or regulatory impediment to using the ARPA funds for the match or cost-share requirement.
ARPA funds under other eligible categories may not be used to meet the non-federal match or cost-share requirements of federal programs other than as specifically provided for by statute
To read the FAQ document, click here.
