Can cities use ARP funds to hire vendors to respond to public health issues unrelated to COVID-19 (e.g., increased bulk trash)?

Neither the text of the American Rescue Plan Act of 2021 (“ARP”) nor the U.S. Department of the Treasury’s (“Treasury”) Final Rule on the uses of Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) explicitly addresses bulk trash disposal as a public health issue that is eligible for CSLFRF funding.[1] However, depending on the circumstances, it is conceivable that increased trash could be connected to increased teleworking or other demographic/workplace changes caused by COVID-19. Bulk trash pickup is often considered a health-related government service.[2] The Final Rule states that:

Uses of funds that are not specifically named as eligible in this final rule may still be eligible in two ways. First, under the revenue loss eligible use category, recipients have broad latitude to use funds for government services up to their amount of revenue loss due to the pandemic. A potential use of funds that does not fit within the other three eligible use categories may be permissible as a government service, which recipients can fund up to their amount of revenue loss. Second, the eligible use category for responding to the public health and negative economic impacts of the pandemic provides a non-exhaustive list of enumerated eligible uses, which means that the listed eligible uses include some, but not all, of the uses of funds that could be eligible.[3]

Additionally, the Final Rule has provided the following definition:

Government services include, but are not limited to, maintenance or pay-go funded building of infrastructure, including roads; modernization of cybersecurity, including hardware, software, and protection of critical infrastructure; health services; environmental remediation; school or educational services; and the provision of police, fire, and other public safety services.[4]

It is therefore possible, though not expressly stated, that bulk trash pickup and other similar government services to remedy public health issues may be an acceptable use of ARP funds under the Revenue Replacement eligible use category. Recipients of ARP funds that hire outside vendors for services must consult the CSLFRF Compliance and Reporting Guidance for good practices.[5]

Last Updated February 4, 2022