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Can American Rescue Plan Act (“ARP”) funds be used to provide public information regarding a parks levy to improve the outdoor spaces in our community?

U.S. Department of the Treasury (“Treasury”) guidance does not indicate that Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) can be used to provide public information for new taxes or levies within a municipality. However, a public information campaign for a parks levy may be eligible for CSLFRF funding up to the extent of revenue reduced by the COVID-19 pandemic if it constitutes a government service. Additionally, there are other ways to use CSLFRF to improve outdoor spaces in a community directly.

The municipality should take steps to understand when outreach and the dissemination of information are eligible to receive CSLFRF funding. The Final Rule describes the continued need for governments to provide public health efforts, such as public communications, to prevent and address the spread of COVID-19.[1] At first glance, a parks levy does not appear to relate directly to the prevention of COVID-19 or related public health efforts; thus, expenses related to corresponding communications likely would not be a permissible use of CSLFRF under the eligible use categories for addressing the COVID-19 emergency.

However, a public information campaign for a parks levy might be considered eligible if it qualifies as a government service to citizens. Treasury generally provides states and local governments broad latitude to use funds to provide government services. While CSLFRF guidance does not explicitly permit funding communications relating to a parks levy, the Final Rule does not explicitly preclude it. Funds can generally be used for provision of government services up to the amount of revenue lost due to the public health emergency.[2] A municipality should first perform its revenue loss calculation as set forth in Treasury guidance to determine the amount available for this use.[3] Next, a municipality should consider what constitutes a government service and the restrictions on use that apply to all uses of funds that include paying down debt or satisfying settlements or judgments:

Government services generally include any service traditionally provided by a government, unless Treasury has stated otherwise. Here are some common examples, although this list is not exhaustive:

  • Construction of schools and hospitals
  • Road building and maintenance, and other infrastructure
  • Health services 
  • General government administration, staff, and administrative facilities
  • Environmental remediation
  • Provision of police, fire, and other public safety services (including purchase of fire trucks and police vehicles) 

Government services is the most flexible eligible use category under the [CSLFRF] program, and funds are subject to streamlined reporting and compliance requirements. Recipients should be mindful that certain restrictions, which are detailed further in the Restrictions on Use section and apply to all uses of funds, apply to government services as well.[4]

If the municipality determines that communications regarding a park levy fall under the definition of “government services,” using CSLFRF funds for that purpose could be permissible. If, when reviewing the details surrounding such costs, a municipality is uncertain whether a park levy qualifies as a government service, it would be advisable to request feedback from Treasury and await further guidance.

Lastly, even if a municipality decides that costs relating to the dissemination of public information to improve outdoor spaces may not be covered by any category of CSLFRF, the improvements to the parks themselves may still be covered. Investments in improving outdoor spaces, such as parks, may be an eligible use of funds to respond to the public health emergency and/or its negative economic consequences. These investments are an enumerated use and presumed eligible when these investments serve disproportionately impacted communities.[5] Treasury encourages recipients to consider the disproportionate negative economic impacts on specific communities and populations.

Recipients may also provide these services to other populations, households, or geographic areas disproportionately impacted by the pandemic. Such programs and services include services designed to build stronger communities and to address health disparities and the social determinants of health.[6] For example, Treasury cites investments in parks, public plazas, and other public outdoor recreation spaces that may respond to the needs of disproportionately impacted communities by promoting healthier living environments and outdoor recreation and socialization to mitigate the spread of COVID-19.[7]

Moreover, many governments saw significantly increased use of parks during the pandemic that resulted in damage or increased maintenance needs and associated costs. As such, Treasury allows the use of CSLFRF funds to “address administrative needs of recipient governments that were caused or exacerbated by the pandemic.”[8] These administrative needs include “increased repair or maintenance needs to respond to significantly greater use of public facilities.”[9]

While municipalities may be limited in the extent that CSLFRF can be used for public information efforts related to taxes and levies, a municipality can use CSLFRF to improve outdoor spaces or repair parks and public facilities, generally presumed eligible in disproportionately impacted communities, that may have experienced damage or increased maintenance needs due to the pandemic.[10]

Treasury may provide additional information when it issues new Frequently Asked Questions (“FAQs”) associated with the Final Rule.

Last revised: March 31, 2022

[2] Id., at 423.

[3] Id., at 424.

[4] Coronavirus State and Local Fiscal Recovery Funds: Overview of the Final Rule, at 11, available at:  https://home.treasury.gov/system/files/136/SLFRF-Final-Rule-Overview.pdf.

[5] Treas. Reg. 31 CFR 35 at 389, available at: https://home.treasury.gov/system/files/136/SLFRF-Final-Rule.pdf.

[6] Id.

[7] Id., at 129.

[8] Id., at 189-190.

[9] Id.

[10] Id.