ARPA Obligation Deadline on 12-31-24
Oklahoma municipalities must obligate the American Rescue Plan Act (ARPA) NEU funds they received by December 31st of this year. If the funds are not obligated by this deadline, municipalities will be required to return the funds. The reporting portal to input how the funds have been obligated does not open until April 1, 2025. If your municipality has not obligated your ARPA NEU funds yet, below are some helpful information and resources.
- Obligation of ARPA Funds
Under the U.S. Treasury's final rules for ARPA, "obligation" is defined as placing an order for property and services, or entering into contracts, subawards, or similar transactions that require payment. See FAQ 13.17 on pg. 67 here for what is included in "similar transactions that require payment."
Obligation does NOT include:
An adopted budget or budget amendment
Appropriation of SLFRF funds
Executive orders
Resolutions
Written or oral intention to enter a contract
Granting legal authority to enter a contract
Claiming funds under the revenue loss category
Moving SLFRF dollars to a general fund without further establishing an obligation by December 31, 2024
- Obligation under Standard Allowance for General Government Services
Municipalities may use up to $10 million under the “standard allowance” for general government services if they report under the revenue loss category. "Government services" generally include services traditionally provided by a government, such as payroll for government employees, contracts, grants, supplies and equipment, rent, and/or any other costs that governments typically bear to provide services are costs that could comprise the costs of government services as outlined on page 11 of the Treasury's final rule overview here. Additional guidance on government services can be found in FAQ 3.1 and 3.2 on page 24 of the Treasury's FAQ document here.
- ARPA funds can also be used on payroll after the obligation deadline of Dec. 31st 2024 or on a memorandum of understanding signed before December 31st , 2024, as described below.
PAYROLL
Can I use ARPA dollars for personnel costs after the Dec. 31, 2024 obligation deadline?
• Yes. You must estimate the amount that you anticipate to use toward personnel costs through the expenditure period and report that estimate to Treasury.
• Deadline for annual reporters to send personnel cost estimates is April 30, 2025. (the reporting portal does not open until April 1, 2025).
• Personnel costs include all salary and wages, covered benefits and payroll taxes.
• NOTE: For any personnel you are covering, their position MUST be established prior to 12/31/2024.
What do I have to do to ensure my ARPA funds are obligated if we are using it for personnel costs?
• There are two primary ways to ensure your funds are obligated for personnel costs:
1.FAQ 17.7 – You DO NOT need an interagency agreement. Your estimate for personnel costs is considered an obligation, which will be reported to Treasury in April of 2025.
2. FAQ 17.6 – If you decide to create an interagency agreement/ memorandum of understanding under revenue replacement, your municipality should enter a project description summarizing personnel costs covered with ARPA dollars on the report.
MEMORANDUM OF UNDERSTANDING (MOU)/ INTERAGENCY AGREEMENT
Examples of MOU's Treasury would consider obligations include:
• If a city council has appropriated a certain amount of funds for a public safety initiative to be administered by the city’s executive branch through fiscal year 2025, an agreement between the city’s Chief Executive and the city’s public safety department under which the department agrees to comply with reporting and recordkeeping requirements that facilitate the city’s compliance with SLFRF program requirements.
The Treasury's article here and FAQ 17.6 describes how the MOU must be done. A sample MOU template is accessed here.
For further details on what classifies as an obligation, see the Treasury's obligation webinar with the National League of Cities here and the slides from the webinar here. Additionally, the National League of Cities has an article here about obligations.
- Restrictions on Usage of ARPA funds
ARPA funds cannot be used for the purposes listed on page 41 of the final rule, including:
Paying legal judgments
Paying off debts
Making extraordinary contributions to pension funds
- Funding Amounts and Reporting for NEU Municipalities
A list of the 520 Oklahoma municipalities classified as NEUs, along with the amount of funding they received, can be accessed here.
Over 238 million was distributed to NEU municipalities in Oklahoma.
NEU municipalities are only required to report annually instead of quarterly, and the reporting portal will open on April 1, 2025.
OML will be hosting virtual office hours to help with the reporting requirements every Tuesday in April at 1pm. Click here to join the meetings.
Before April 1, 2025, make sure your municipality can login to the ARPA reporting portal. If you do not have access or the authorized representative has left your municipality, you will need to email Treasury at COVIDReliefITSupport@treasury.gov – Make sure to mention “Account Identifier” in the subject line of the email.
- Questions?
Contact the treasury directly at slfrf@treasury.gov for the best guidance based on your specific facts. If you would like to contact OML, email arpa@oml.org, fill out the inquiry form here or call us at 405 528-7515.