Local Fiscal Recovery Fund Allocations

Cities and towns that serve populations under 50,000, and did not receive a direct allocation from the U.S. 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 directly from the Treasury. Local governments will receive the funds in two payments with 50 percent of the funds being provided beginning in May 2021 and the balance provided 12 months later.

  • Small City Allocations – Using the population data provided by Treasury, the state has prepared the initial allocations for the 291 eligible cities and towns. To access these funds cities and towns are required to submit a request to the state and provide information outlined in recent Treasury guidance as summarized in the Application Process section below. Pursuant to the Act, the amount distributed to these entities is capped at 75 percent of the entity’s operating budget as of January 27, 2020. The initial allocations may be revised based on the information provided by eligible cities and towns as outlined below.
  • Metropolitan City Allocations – The Treasury has 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 has 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.

Application Process for Small Cities Allocations

All applications are due no later than 11:59 p.m. on June 23, 2021.

The state has developed a secure web form for eligible cities and towns to request funding and upload certification documents required by Treasury. Refer to the Treasury’s Pre-Submission Check List for additional details regarding the basic information cities must provide when requesting funding from the state.

Each eligible city and town will be receive a unique NEU Recipient Number and password to access the required web form and request funds. The NEU Recipient Number must be retained by the city or town as it will be used for the reporting to Treasury through the lifecycle of the program. Finance will send individual e-mails to the city’s contact for the state-directed Coronavirus Relief Funds and each City Manager.

The portal will be available and emails with usernames and passwords will be sent on June 10, 2021. Cities and towns should complete the following to request the funds:

  • Completed web form, which requests local government name, Taxpayer ID, DUNS Number, address, and other contact information. This form will also be required to decline the funds. If a city or town does not have a DUNS number one will need to be obtained at https://fedgov.dnb.com/webform/. While a DUNS is not required to receive a payment, each entity must obtain a DUNS and be registered on SAM.gov so that state can provide this information to U.S. Treasury in the interim report due on August 31, 2021. The documents below may be submitted via the web form.
  • Total annual operating budget, including general fund and other funds, in effect as of January 27, 2020 or top-line expenditure total (in exceptional cases in which a city or town does not adopt a formal budget).
  • Award Terms and Conditions for Non-Entitlement Units of Local Governments (Small Cities) signed by an authorized representative of the city.
  • Assurances of Compliance with Title VI of the Civil Rights Act of 1964 signed by an authorized official of the city.
  • Certification Form – This form should be prepared and signed by an authorized representative of each eligible city or town. Please enter the city or town legal name in all the fillable fields, except the first one.

Cities must retain copies of these documents for upload with the first report to the Treasury due on April 30, 2022.

The state must review these documents to confirm the city or town is not excluded or disqualified in compliance with 2 C.F.R. Part 180. In addition, the state must determine if the 75-percent limit applies to any city or town compared to population-based allocation formula. Allocations will be revised if the entity’s allocation exceeds the 75-percent cap and these funds will be returned to Treasury.

Eligible Uses

Recipients may use Coronavirus Local Fiscal Recovery Funds 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).
  • Invest in water, sewer, and broadband infrastructure.

Treasury provides additional information on eligibility in the Interim Final RuleFact Sheet, and FAQs. The Interim Final Rule was posted on the Federal Register on May 16, 2021, and was effective May 17, 2021. Comments on the Interim Final Rule are due on July 16, 2021.

Additional information is available on the U.S. Treasury’s website.

Reporting Requirements

States are required to include an update on distribution of funds to individual NEUs, including whether the NEU has (1) received funding, (2) declined funding and requested a transfer to the state pursuant to Section 603(c)(4) of the Act; and (3) has not taken action on its funding. The state will also provide various information collected from the application submitted by each NEU along with payment dates and amounts, including any adjustments made for any city or town that exceeds the 75-percent cap. This interim report is due on August 31, 2021.

Small cities and towns are required to submit a project and expenditure report to Treasury annually on the use of funds. Reporting guidance from the Treasury is forthcoming. Reports will include the same general data as those submitted by recipients of the Coronavirus Relief Fun, with some modifications to expenditure categories and the addition of data elements related to eligible uses. The first report is due to Treasury by April 30, 2022 and will cover activity from the date of the award to March 31, 2022. The subsequent annual reports must be submitted to Treasury by October 31 each year. In addition to other reporting requirements, small cities and towns will be asked to provide:

  • NEU Recipient Number (the unique identification code assigned by the state to each NEU).
  • Copy of signed Award Terms and Conditions Agreement.
  • Copy of signed Assurances of Compliance with Title VI of the Civil Rights Act of 1964.
  • Copy of actual budget documents validating the top-line budget total provided to the State as part of the request for funding.

All financial records and supporting documentation related to the award must be retained for a period of five years after all funds have been expended. Additional details about the reporting requirements and a copy of the Treasury guidance will be posted on this webpage when they are available.

Additional Information

  • Treasury provides a step-by-step guide for states to allocate and distribute funds. Generally, states are required to distribute funds to eligible cities and towns within 30 days of receipt of the funds, unless granted an extension by the Treasury pursuant to these guidelines.
  • On June 9th, 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 without audio is here.

Questions

Please submit any questions regarding this process to FiscalRecovery@dof.ca.gov.