All across the US, governments at the state, tribal, and local levels are wading through the enormous task of managing a combined $1.9 trillion in federal funding.

The money, approved in March 2021 through the American Rescue Plan Act (ARPA), is helping communities at all levels rebound from the detrimental impacts of Covid-19. But, as it turns out, managing and allocating the funds is no easy task.

To help you navigate these opportunities and challenges, we reached out to two expert panelists: Joel Neavell, Director of Procurement for the Louisville Metro Government, and Ken Hillebrand, Deputy Director of the Louisville Accelerator Team. They joined our webinar, Everything About Accessing ARPA, to share firsthand experiences and insights gained over their first year managing Louisville’s $388 million in ARPA funding.

Keep reading for all the highlights from the webinar, including how to assemble the right team, use the money to support strategic goals, and meet compliance and reporting requirements.

Louisville’s approach to managing ARPA funds

After ARPA was approved by the federal government in 2021, the Louisville mayor assembled the Louisville Accelerator Team. Ken, who is deputy director on the team, said it was critical to hire the right personnel to manage the multi-year initiative. “We definitely had to add headcount to manage these funds,” said Ken. “Our grants person has said this is the most complex compliance and reporting grant that she’s ever seen from the federal government.”

The Accelerator Team manages ARPA funds in collaboration with Joel’s procurement team, the city’s federal grant specialists, and others in the Office of Management and Budget. The team’s primary function is to help departments and applicants with ARPA compliance and reporting.

Understanding the funding

There are some important things agencies need to know before they start planning how to use ARPA funding. Ken and Joel shared these tips:

Timeline

The US Treasury has placed a timeline on the use of ARPA funding:

• all funding must be “obligated” by December 31, 2024
• all funds and programming must be completed by December 31, 2026
• all reporting must be completed by March 2027

“It’s a large window,” Ken said, “but if we’re looking at large projects like affordable housing, those take several years and we need to get them started right away.”

Funding amount

ARPA is designed to be one-time funding and the amount that each jurisdiction is eligible for is determined by the federal government. Louisville received one allocation for its city entity and one for its county entity, totaling $388 million. The government is also eligible for ARPA money funneled through the state of Kentucky, but those projects are managed at the state level.

Eligible uses

ARPA funding is intended to drive pandemic recovery efforts, so Ken said projects must demonstrate some nexus to Covid-19. One exception is projects related to water, sewage, and broadband infrastructure. In Louisville, Council decided on seven priorities they wanted to address based on data around community need.

Reporting

Reporting and compliance requirements depend on the size of the locality – whether the population is above or below 250,000. For Louisville, there are three types of reports required: a quarterly report to the US Treasury Department, an annual report, called the Revenue Recovery Project Plan Report, and a monthly report to Metro Council.

The strategic side of ARPA

While $388 million seems like a lot of money, it barely scratches the surface of everything Louisville’s internal departments and community groups want to achieve. So how did they decide which projects to pursue? 

Prioritizing projects

Based on their seven priority areas, Council created working groups responsible for selecting high-impact projects. The working groups engaged the community through surveys and public meetings to find out how residents wanted to spend the money. For the first round of funding, the city focused on emergency response efforts to address the pandemic. In the second round, they began looking at longer-term projects.

Focusing on impact

“As we were looking at the projects, we looked at ‘okay what can we do that’s going to make an impact in our community over a period of time?’ So that, when we look back 5, 10, 15 years from now, we can say, ‘Hey, we made a good investment in our community,’” said Ken.

While deciding how to use the funding can feel overwhelming, Joel said it’s a huge opportunity to think innovatively about how to solve ongoing and emerging challenges. “It enables us to try new things. Even if we try it and we fail, we’re going beyond what we had been able to do without these resources.”

Preparing for the funding

Understanding the requirements for ARPA funding is a big learning curve for everyone involved: procurement, internal clients, suppliers, and nonprofits applying for grants.

Supporting stakeholders

On the procurement side, Louisville’s vendor community is used to working with the government on municipal projects. But they’re not as experienced with federal funding, which has certain federal procurement requirements.

“That really has been a big learning curve for all of us, on the vendor side and even on our staff side — making sure we’re checking all the boxes, that we aren’t doing something that would result in us having to return the money back to the federal government,” said Joel.

It’s the same for internal clients who “get approved for projects but then don’t understand requirements,” said Joel. “There is a need on [procurement’s] side to upskill our own staff on how to manage expectations.”

Working with nonprofits

Nonprofits also need to get up to speed on how to apply for grants available through ARPA. For each grant opportunity, Louisville releases a request for applications (RFA) on Bonfire. Using Bonfire makes the process easier for both applicants and the project team, ensuring easy access to documents, centralized collaboration, and a transparent scoring system.

Ken’s team is looking to take it one step further and provide a more in-depth two- to three-hour session to help new nonprofits learn the ropes. “Some of these groups aren’t even grassroots, they’re just seedlings… We want to go the extra step to help reduce complexities. Our goal is that they’re all successful – in applying and getting the award.”

Take advantage of ARPA funding

While the process of using ARPA funding may feel daunting, Ken and Joel say it’s an opportunity they couldn’t pass up to serve their community better.

“Regardless of the lift, it’s a necessary catalyst for recovery,” said Joel. “We might not see these projects have immediate results. But these are investments that we’re going to see the benefits for hopefully years from now. You either see it as another burden on the back office of government or you say, ‘This could transform our city or our town and we have the opportunity to do that.’”

Want to learn more about how to effectively spend and manage ARPA funding? Schedule a demo to see how Bonfire can help.