Missouri Municipalities And ARPA Funding

In 2021, the federal government released $130.2 billion for local governments split between municipalities and counties. Approximately $2.7 billion was received by the state of Missouri. These funds were divided among the 114 counties and 924 potential municipalities.

The funds were released under the American Rescue Plan Act (ARPA). Initially, there were six areas where the funds could be spent: public health, public safety, economic development, water/wastewater/stormwater, broadband and behavioral health. In January 2022, the areas where funds could be spent were expanded to include “government services,” a much broader category that offered many more options for municipalities.

Of the 924 municipalities in Missouri, 889 accepted the ARPA funds and 35 declined them. According to the state of Missouri Office of Administration, $831 million was distributed to 15 municipalities identified as “metropolitan cities” and $449 million was distributed to the rest of the municipalities in Missouri referred to “Non-Entitlement Units,” or NEUs. These funds were provided to municipalities in two portions over the course of two years.

In February 2023, the Missouri Municipal League asked members if ARPA funds were spent and, if so, how it was allocated. Of the 650 cities, towns and villages the Missouri Municipal League represents, 163 responded.

A large number of municipalities (38%) have spent their ARPA funds on water and sewer infrastructure projects. Almost 20% of municipalities used the ARPA funds to replace lost public sector revenue. Other categories for allocated funds included premium pay; negative economic impacts; public health emergency; broadband; and funds to nonprofit organizations.

For those municipalities that have yet to spend their ARPA funds, a majority plan to use the funding for water and sewer infrastructure. Twenty percent plan to use funds for replacing lost public sector revenue.

Approximately half of all municipalities surveyed indicated they were able to leverage ARPA funds to receive additional funds from another agency, state or federal. Most municipalities (32%) were able to leverage their funds by working with the Missouri Department of Natural Resources. Other municipalities noted that they were able to partner with the Missouri Department of Economic Development (13%); USDA – Rural Development (9%); Missouri Department of Transportation (8%) and the Missouri Department of Conservation (3%).

Other Summary Information

Annual online reporting for the ARPA funds is required by the U.S. Treasury. Of the respondents, 67% felt the reporting requirements were reasonable. When completing a project or obtaining bids, almost half of respondents noted that the prices were higher than the initial bid. It was also noted that where bids were higher, the prices increased anywhere from 1% to 40%.