ARPA Final Rules Expand Eligible Infrastructure Projects

Attention, Small Municipalities – These Changes Benefit You!

The American Rescue Plan Act (ARPA) established 100% grants that may be used by municipalities to make necessary investments in water and/or sewer infrastructure, or broadband infrastructure.  The ARPA also allowed broad use of funds for government services if a community could demonstrate “Revenue Loss”.  The Final Rules significantly expand the eligibility of certain project types and greatly simplifies “revenue loss” determination for small communities.

Standard Allowance of up to $10 Million for Revenue Loss

Almost every small municipality in Michigan was awarded less than $10 million ARPA funds.  This means they can elect the standard allowance up to 100% of their ARPA grant amount and treat it as Revenue Loss without any additional calculation or documentation.  This allows any project that improves government services to be eligible.  For infrastructure uses, eligible projects could include:

  • Asset Management Plans for water or sewer systems
  • Maintenance of water, sewer, or storm sewer infrastructure
  • Road and Street Improvements
  • Parks or Outdoor Recreation Facilities
  • GIS mapping systems and programs
  • Environmental Remediation

Necessary Water and Sewer Infrastructure

  • In addition to the project types that would typically be eligible under the (CWSRF) Clean Water State Revolving Fund or the Drinking Water State Revolving Fund (DWSRF), some new project types are now eligible under the final rules:
  • Construct, improve and repair wastewater treatment plants
  • Manage and treat stormwater or subsurface drainage water
  • Address cybersecurity needs to protect sewer infrastructure
  • Control non-point sources of pollution
  • Create green infrastructure and protect waterbodies from pollution
  • Construct water infrastructure capital improvements
  • Replace lead service lines
  • Replace water meters
  • Development of Watershed projects
  • Culvert replacement and road-stream crossing improvements
Here's What Else You Should Know

The Final Rules are scheduled to become effective April 1, 2022.  The rules include many exemptions, requirements, and contractual obligations that can be overwhelming.  Non-entitlement unit (NEU) communities will have until April 30, 2022, to file their first “Project and Expenditure Report” for their American Rescue Plan Act (ARPA) dollars.  Gosling Czubak can help you navigate the reporting requirements and project implementation strategies.

Reach out to Mark Hurley with any questions or if our team can help this unprecedented opportunity.