Would the purchase of uniform trash bins for trash collection fall under provision of government services or services to impacted communities for the purposes of ARP fund usage?

The U.S. Department of the Treasury’s (“Treasury”) Final Rule on the Coronavirus State and Local Fiscal Recovery Funds (“CSLFRF”) allows recipients to use CSLFRF to provide government services to the extent of the municipality’s reduction in revenue due to the pandemic.[1] Treasury’s list of services considered “government services” under the Final Rule[2] is neither exclusive nor exhaustive, but municipalities should be aware of restrictions that may apply.[3] Treasury states that, “generally speaking, services provided by the recipient governments are ‘government services’ under the … final rule, unless Treasury has stated otherwise.”[4] Thus, if a municipality provides trash collection services, providing uniform trash bins would comprise an eligible government service; maintaining the government service of trash collection would consequently be eligible for CSLFRF funding “to the extent of the municipality’s reduction in revenue due to the pandemic.”

The Final Rule allows recipients to determine their reduction in revenue due to the pandemic in two ways. First, they may calculate their actual revenue loss due to the pandemic; Treasury provides a methodology for calculating revenue loss, as well as details about general revenue, calculation dates, and presumptions due to tax changes.[5] Second, they may claim a standard allowance of up to $10 million, not to exceed their total award allocation, which they will then be able to use to fund the provision of government services. As noted in the Final Rule, “Treasury’s decision to elect to allow a fixed amount of loss that can be used to fund ‘government services’ allows recipients the flexibility to use minimal administrative capacity on the calculation if desired.”[6] Municipalities should bear in mind that the $10 million allowance applies to the entire period of performance.[7] The period of performance begins on March 3, 2021 and ends on December 31, 2026.[8]

Notably, Treasury may provide additional pertinent information or guidance. Treasury is expected to issue new Frequently Asked Questions ("FAQs") addressing the Final Rule. [9] In addition, Treasury encourages municipalities to consider the guidance issued in the Statement Regarding Compliance with the Coronavirus State and Local Fiscal Recovery Funds Interim Final Rule and Final Rule.[10]