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Weekly UpdatesThe American Recovery and Reinvestment Act (ARRA) provides funding to both state and local governments through a series of grants and loans distributed by various federal agencies, or in the case of local governments, sub-allocated by the states. Many of the funds will be distributed only for "shovel-ready" projects that must be completed within a specific time period. Therefore, state and local government officials need to pay close attention to these distribution formulas and immediately contact the appropriate federal agency or the governor's office to find out what money may be available under the new law and how to access it.
Initial Requirements. The ARRA sets forth some other broad requirements. No funds may be allocated for zoos, aquariums, golf courses, swimming pools, or casinos. Contractors and subcontractors working on projects funded by the ARRA must be paid the prevailing wage rate, as set forth in the Davis Bacon Act. And the new law also requires giving preference to American-made goods in construction and infrastructure projects financed by the Act.
How the Funds Will Be Allocated. According to the federal Office of Management and Budget, federal agencies will allocate the funding provided in the ARRA in five main ways:
* By Formula. Certain funds in the act are allocated by a formula, usually set in law, to states and localities. These include Medicaid, the State Fiscal Stabilization Fund (created by the economic recovery bill to help state and local governments avert budget cuts, the fund provides two block grants for states--a $39.5 billion grant earmarked for education and an $8.8 billion grant to help fund other key services), and highway infrastructure development.
* By Competition. Other programs allocate funding through competitive solicitations. Agencies (including the National Institutes of Health and the National Science Foundation) have distributed requests for proposals and convene panels to evaluate applications.
* By Demand. Some programs respond directly to demand from eligible individuals. These include premium subsidies for COBRA continuation coverage, unemployment insurance, food stamps, small business loans, and Pell grants for education.
* By One-Time Automatic Disbursement. The ARRA includes one-time benefits (e.g., $250 to Social Security, veterans, and supplemental security income beneficiaries).
* By Agency Plan. Many ARRA programs allocate funding according to public operating and spending plans, including environmental cleanup of nuclear waste sites, national parks construction, and defense and veterans infrastructure programs.
Finding the Information You Need. A number of comprehensive resources are available to assist state and local governments in accessing available stimulus funds. These include:
* www.grants.gov
State and local government applicants can learn exactly how to find and apply for federal grants. Resources include a page on "Applicant Frequently Asked Questions," checklists, and troubleshooting tips. This site will help you request a DUNS number and register with the Central Contractor Registry (CCR).
* http://www.recovery.gov/?q=content/agencies
Applicants can access information regarding grant distribution from specific agencies at this and the following federal agency Web sites, which include information on grants distributed by formula as well as through a competitive bid process. Information on specific allocations to local governments is available from:
** the Department of Justice Web site at http://www.ojp. usdoj.gov/recovery/
** the Department of Housing and Urban Development Web site at http://www.hud.gov/recovery/
** the Department of Transportation Web site at http://www.fhwa. dot.gov/economicrecovery/ index.htm
* http://www.recovery.gov/?q= content/state-recovery-page
This site provides easy-to-follow links to the Web sites created by many governors' offices. These sites discuss how these states are allocating recovery dollars.
* http://www.nlc.org/state_municipal_leagues/2203.aspx
This site provides links to the information state municipal leagues have posted on their Web sites, discussing how stimulus funds will be disbursed to local governments.
* http://www.cacities.org/resource_ files/27711.2009ARRAReport03.0 3.09.pdf
The League of California Cities released a "City Funding Book," available in PDF form, to guide cities on how to access and apply for federal funds available through the ARRA. COBRA Guidance. The IRS also recently issued guidance on the new
COBRA premium subsidy. The guidance is provided in a question-and-answer format addressing how public and private employers can claim a payroll tax credit for providing the 65 percent COBRA premium subsidy required under the ARRA. The IRS guidance, issued February 26, 2009, and can be found at http://www.irs.gov/newsroom/article/0,,id=204505,00.html.
The Energy Efficiency and Conservation Block Grant (EECBG). Some municipalities can apply to the EECBG program by using either grants.gov or the method below. Municipalities with populations of more than 35,000 or "a population that causes the municipality to be one of the ten highest populated municipalities in the state" can apply directly to the EECBG program, which is administered by the U.S. Department of Energy. This program has received $3.2 billion in the economic recovery package, of which $2.8 billion is for formula grants, with $400 million to be awarded on a competitive basis.
Municipalities that are eligible to apply directly for EECBG funding must submit their funding applications through FedConnect. A guide explaining that process is available at https://www.fedconnect.net/FedConne ct/PublicPages/FedConnect_Ready_Set _Go.pdf. Before submitting an application through FedConnect, applicants must complete the following steps:
* Request a DUNS number at http://fedgov.dnb.com/webform/ displayHomePage.do
* Register with the Central Contractor Registry (CCR) at http://www..ccr.gov/
* The E-Business Point of Contact listed in your CCR must register in FedConnect at https://www.fed connect.net/FedConnect/
Applicants should allow 21 days to complete the registration process.
Further Information. In addition to grants and loans, the ARRA contains many new and expanded tax-exempt and tax-credit bond programs that governments should review. For an overview of the act, see the Federal Focus article in this issue.
GFOA Resources. The GFOA will update its Web site regularly with new information regarding access to stimulus funds, including additional information made available by federal agencies, governor's offices, national associations, and state municipal leagues. GFOA members are encouraged to review this information at www.gfoa.org.
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