Is there specific guidance that applies to utility assistance when municipalities cannot secure monthly payment sums from utility companies? For example, are municipalities able to consider payment of a lump-sum utility bill as one month of assistance?

The U.S. Department of the Treasury (“Treasury”) has not provided specific guidance on the use of Emergency Rental Assistance program (“ERA1” and “ERA2”) funds for lump-sum payments in the context of utility assistance. However, ERA1 and ERA2 do provide guidance relating to utility payments, including those addressing utility arrears.

According to the ERA Frequently Asked Questions (“ERA FAQ”) within ERA1, households may receive up to twelve (12) months of financial assistance plus an additional three (3) months to ensure housing stability if necessary and available. If assistance from ERA1 is combined with ERA2, the aggregate amount of financial assistance an eligible household can receive must not exceed eighteen (18) months.[1]

As for circumstances where a household finds itself facing rental or utility arrears where the payment was due at an earlier date, the ERA FAQ states that grantees do not need to make full payments, subject to limits established by the guidance where “[assistance is] (i) subject to the availability of remaining funds currently allocated to the grantee, and (ii) based on a subsequent application for additional assistance.”[2]

Grantees “may structure a program to provide less than full coverage of arrears, [and] are encouraged to consider whether payments of less than the full amount of arrears may result in a significant disincentive for landlord participation in the ERA program.”[3]

The ERA FAQ indicates that grantees who obtain lump sum (rather than monthly) charges from utility providers can establish reasonable procedures for combining the assistance for multiple households into a single lump-sum or “bulk” payment to a utility provider. Any such arrangements should comply with the following guidelines:

(1) comply with applicable privacy requirements; (2) include appropriate safeguards to ensure payments are made only for eligible households; and (3) are documented in records satisfying the grantee’s reporting requirements, including, for example, the amount of assistance paid for each household. [4]

In addition, to ensure the delivery of assistance, grantees may adopt procedures enabling utility providers to receive assistance “based on reasonable estimates of arrears owed by multiple households, before their application and documentation requirements are satisfied.”[5]

A grantee may provide for payments based on estimates following these guidelines:

(1) the landlord or utility provider certifies that its estimate is reasonable based on information available to it at the time, (2) the grantee requires the landlord or utility provider to receive all required documentation within six months, and (3) the landlord or utility provider agrees in writing to return to the grantee any assistance the landlord or utility provider receives that the household was ineligible for or for which the required documentation is not received within six months.[6]

It is a good practice for grantees to limit such payments to limit the risk of providing funds that are used for ineligible purposes.