Cities and towns that serve populations under 50,000 and did not receive a direct allocation from the U.S. Treasury (Treasury), are eligible to receive funds to respond to the COVID-19 emergency, mitigate the fiscal effects of COVID-19, and support job creation in their communities. These funds are available to cover costs incurred by local governments beginning March 3, 2021. Funds must be obligated by December 31, 2024, and expended by December 31, 2026. All counties and metropolitan cities in California will also receive approximately $14.7 billion in total directly from the Treasury. Funding allocations have been issued.
- Small City Allocations – The state made allocations to the 291 qualified cities and towns (known as non-entitlement units of local government or NEU) pursuant to population data provided by Treasury. To access these funds, cities and towns submitted requests to the state and provided information outlined in the Treasury guidance. Pursuant to the American Rescue Plan Act of 2021, the amount distributed to these entities were capped at 75 percent of the entity’s operating budget as of January 27, 2020. Additional details regarding distribution can be found here.
- Metropolitan City Allocations – The Treasury allocated $7 billion of the $45.6 billion available to 191 metropolitan cities (generally with populations larger than 50,000) in California. Funds were allocated by Treasury consistent with the Community Development Block Grant Program formula and using 2019 population data from the U.S. Census Bureau. Additional details regarding the federal methodology can be found here.
- County Allocations – The Treasury allocated nearly $7.7 billion of the $65.1 billion available directly to all counties in California. Funds were allocated by the Treasury based on each county’s population share of the total population of all counties using 2019 population data from the U.S. Census Bureau. Additional details regarding the federal methodology can be found here.
Recipients may use Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to:
- Respond to the COVID-19 public health emergency and support various activities to decrease the spread of the virus.
- Address negative economic impacts caused by the public health emergency including assistance to households, small businesses, nonprofits, or to provide aid to impacted industries such as tourism, travel, and hospitality.
- Replace lost public sector revenue, using this funding to provide government services to the extent of the reduction in revenue experienced due to the pandemic.
- Provide premium pay to eligible workers or grants to eligible employers of workers who perform essential work during the COVID-19 public health emergency (up to an additional $13 per hour and not to exceed $25,000 per worker). With the end of the public health emergency (PHE) in April 2023, recipients may continue to use SLFRF funds to provide premium pay to essential workers for work conducted before the termination of the PHE. (See FAQ 4.11 in the Final Rule FAQs for additional information.)
- Invest in water, sewer, and broadband infrastructure.
Small cities and towns are required to submit project and expenditure reports to Treasury on the use of funds. The frequency and date of reporting depends on their allocation amount. More information can be found in Treasury’s Compliance and Reporting Guidance. Treasury also provides an overview presentation and recorded webinar of NEU reporting on its website.
The California League of Cities hosted a webinar, American Rescue Plan Funding for Non-Entitlement Cities: What You Need to Know. The video and slides are posted on the League’s Guide to Local Recovery website. A copy of the slides is here.
For questions regarding federal reporting or general inquiries, please contact SLFRF@treasury.gov.
For questions regarding allocations, please contact FiscalRecovery@dof.ca.gov.
Webpage last updated June 23, 2023.