On Monday, May 10, the Treasury Department issued the Interim Final Rule (Rule) concerning the operation of the Coronavirus Local Fiscal Recovery (CLFR) Fund[1] and opened the portal through which qualified governmental entities, including metropolitan cities[2] and counties[3], may apply to Treasury for the direct payment of such funds.

Note: In our April 16 Special Bulletin, we discussed pre-award requirements that governmental entities must complete before applying to the Treasury Department for payments from the CLFR Fund and, in our March 8 Special Bulletin, we provided the eligible uses for CLFR Fund payments. In our April 16 Special Bulletin, we indicated that governmental entities, such as special districts and joint powers authorities, may qualify as “consolidated governments” and for receipt of CLFR funding directly from Treasury. While Treasury has not issued regulations concerning the CLFR or defined the term “consolidated government”, the Frequently Asked Questions provides that such entities are “special-purpose units of government” and not qualified to receive such direct payments.[4]

The Rule provides extensive information on the four (4) uses of CLFR funds[5] for which qualified governmental entities may apply, including:

  1. To respond to the public health emergency or its negative economic impacts[6];
  2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers[7];
  3. For the provision of government services to the extent of the reduction in revenue due to the COVID–19 public health emergency[8]; and
  4. To make necessary investments in water, sewer, or broadband infrastructure[9].

Each of the relevant sections describes the eligible uses of payments from the CLFR Fund, provides a non-exclusive list of programs or services that may be funded under that section, identifies uses outside the scope of the specific category, and provides questions and answers concerning the application of that section.

LCW recommends that, before applying for CLFR Fund payments, qualified governmental entities familiarize themselves with the scope of coverage under each of the applicable sections. We further recommend that applications be tailored to request funding for uses within the scope of the section and, to the extent possible, based on specific examples provided by Treasury.

LCW will be monitoring additional information provided by Treasury concerning the operation of the CLFR Fund and will be providing additional updates as circumstances require. LCW will also be monitoring information from the State concerning the allocation of funds from the Coronavirus State Fiscal Recovery Fund and how qualified entities may apply for such funding.

 

[1] See American Rescue Plan Act (ARPA), Sec. 9901, amending 42 U.S.C. 801, et seq., to add Section 603 creating the CLFR Fund (hereinafter referred to as “Section 603”).

[2] “Metropolitan cities” are entitled to approximately $45.6 billion in CLFR Fund payments that the Treasury Department will directly allocate and pay to such entities. (See Sec. 603(b)(1).)

[3] Counties are entitled to approximately $65.1 billion in CLFR Fund payments that the Treasury Department will directly allocate and pay to such entities. (See Sec. 603(b)(3).)

[4] The ARPA provides that “consolidated governments” may receive direct payment from Treasury, but does not clearly define the term. (See Sec. 603(b)(4))  The Rule also does not define the term, and only provides that “consolidated governments” include “city-county consolidated governments” (e.g., the City and County of San Francisco) (See Rule, p. 110). However, the Frequently Asked Questions state that “special-purpose districts perform specific functions in the community, such as fire, water, sewer or mosquito abatement” and such districts “will not receive funding allocations” directly from Treasury. (See Treasury, Frequently Asked Questions, No. 3). Therefore, governmental entities that are neither cities nor counties (e.g., special districts and joint powers authorities) may consider requesting the transfer of CLFR funds from governmental entities with transfer authority (i.e., the state, cities, and counties) (See Secs. 602(c)(3); 603(c)(3).)

[5] See Sec. 603(c)(1).

[6] Sec. 603(c)(1)(A); Rule, pp. 10-45.

[7] Sec. 603(c)(1)(B); Rule, pp. 45-51.

[8] Sec. 603(c)(1)(C); Rule, pp. 51-61.

[9] Sec. 603(c)(1)(D); Rule, pp. 62-78.

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Peter has a unique talent in promptly developing an expertise in most of the laws which impact our public agency clients, including the labor relations statutes and those which the Fair Labor Standards Act, the Family Medical Leave Acts.  Many of the firm’s…

Peter has a unique talent in promptly developing an expertise in most of the laws which impact our public agency clients, including the labor relations statutes and those which the Fair Labor Standards Act, the Family Medical Leave Acts.  Many of the firm’s clients have come to rely on his advice in guiding them in these constantly changing areas of law as well as on problem solving many of the labor issues our clients face.

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Alex has spent his career working for and with public agencies. He is a member of the firm’s Labor Relations practice group and has broad and deep experience working with a wide range of collective bargaining statutes, including the National Labor Relation Act…

Alex has spent his career working for and with public agencies. He is a member of the firm’s Labor Relations practice group and has broad and deep experience working with a wide range of collective bargaining statutes, including the National Labor Relation Act (“NLRA”) and the Meyers-Milias-Brown-Act (“MMBA”). Alex is well-versed in bargaining strategy and tactics and negotiates collective bargaining agreements with employee organizations and Project Labor Agreements (“PLAs”) with building and construction trades councils. When he is not bargaining, Alex regularly provides advice and counsel to clients navigating meet and confer obligations and in administrative proceedings defending clients against unfair practice charges and in arbitrations defending clients against contractual grievances.