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Recovery Office – Pandemic Recovery Funds

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1. What are the Pandemic Recovery Funds?

Montgomery County’s SLFRF allocation is $161,395,498. The County is referring to these funds as the Pandemic Recovery Funds. Prior to use, the Funds may be deposited into interest-bearing accounts, with earned interest allowed for general County use. 

2. What is the timeline for the Pandemic Recovery Funds?

March 3, 2021-December 31, 2024

The County must only use the Pandemic Recovery Funds to cover costs/obligations incurred between March 3, 2021, and December 31, 2024.

December 31, 2024

The County must allocate all of the Pandemic Recovery Funds by December 31, 2024. Thus, on December 31, 2024, the County will have allocated all of its $161,395,498.

December 31, 2026

All of the Pandemic Recovery Funds must be spent, and the period of performance must end, by December 31, 2026.

3. What if the project is unable to be completed by December 31, 2026?

All of the Pandemic Recovery Funds must be spent, and the period of performance must end, by December 31, 2026. Thus, if a project is unable to be completed by December 31, 2026, the project may be considered ineligible.

4. What are the eligible use categories for the Pandemic Recovery Funds?

Respond to the Public Health Emergency or Its Negative Economic Impacts

Respond to the Public Health Impacts of the Public Health Emergency

Respond to the Negative Economic Impacts of the Public Health Emergency

Provide Premium Pay to Eligible Workers

Replace Lost Public Sector Revenue

Make Necessary Investments in Water, Sewer, and Broadband Infrastructure

5. What are other eligible uses of the Pandemic Recovery Funds?

Public Sector Capacity and Workforce

Public Safety, Public Health, and Human Services Staff

Government Employment and Rehiring Public Sector Staff

Effective Service Delivery

Capital Expenditures

Loans

Transfers

Administrative Expenses

6. Are administrative expenses an eligible use of the Pandemic Recovery Funds?

The Pandemic Recovery Funds may be used for direct and indirect administrative costs involved in administering this program. For project submissions, please do not include indirect costs in the budget.  The County will provide more information on indirect costs at a later date.

7. What are direct costs and indirect administrative costs?

Direct costs are those that are identified specifically as costs of implementing the Pandemic Recovery Funds program objectives, such as contract support, materials, and supplies for a project. Indirect costs are general overhead costs of an organization where a portion of such costs are allocable to the Pandemic Recovery Fund award such as the cost of facilities or administrative functions like a director’s office.  For project submissions, please do not include indirect costs. Same will be addressed by the County at a later date. 

8. Are grants an eligible use of the Pandemic Recovery Funds?

Grants may be an eligible use of the Pandemic Recovery Funds. 

• Grants to Nonprofits to Implement COVID-19 Prevention and Mitigation Tactics
• Grants to Support Affordable Housing Development
• Grants to Businesses to Hire Underserved Workers
• Grants for Start-Ups for Disproportionately Impacted Small Businesses
• Grant Program for an Impacted Industry

9. Are loans an eligible use of the Pandemic Recovery Funds?

Loans may be an eligible use of the Pandemic Recovery Funds, provided they are for an eligible use category. Additionally, there are special rules about how recipients should track program income depending on the length of the loan.

• Loans to Nonprofits to Mitigate Financial Hardship
• Loans to Small Businesses to Implement COVID-19 Prevention or Mitigation Tactics

Additional Information

-When Pandemic Recovery Funds are used as the principal for loans, there is an expectation that a significant share of the loaned funds will be repaid. Thus, recipients may not simply consider the full amount of loaned funds to be permanently expended and must appropriately account for the return of loaned funds. 

-For loans that mature or are forgiven on or before December 31, 2026, the recipient must account for the use of funds on a cash flow basis, consistent with Treasury’s guidance regarding loans made by recipients using payments from the Coronavirus Relief Fund. Recipients may use Pandemic Recovery Funds to fund the principal of the loan and in that case must track repayment of principal and interest (i.e., “program income,” as defined under 2 CFR 200). When the loan is made, recipients must report the principal of the loan as an expense.

-Repayment of principal may be re-used only for eligible uses and is subject to restrictions on the timing of the use of funds. Interest payments received prior to the end of the period of performance will be considered an addition to the total award and may be used for any purpose that is an eligible use of funds under the statute and final rule. Recipients are not subject to restrictions under 2 CFR 200.307(e)(1) with respect to such payments. 

-For loans with maturities longer than December 31, 2026, the recipient must estimate the cost to the recipient of extending the loan over the life of the loan. In other words, at origination, the recipient must measure the projected cost of the loan and may use Pandemic Recovery Funds for the projected cost of the loan. Recipients have two options for estimating this amount: they may estimate the subsidy cost (i.e., net present value of estimated cash flows) or the discounted cash flow under current expected credit losses (i.e., CECL method).

10. What does the Final Rule say about non-federal match or cost-share requirements?

Generally, the Pandemic Recovery Funds may not be used to meet non-federal matching or cost-share requirements.

Exceptions

-Revenue Loss Category

-Bureau of Reclamation Projects

-Infrastructure Investment and Jobs Act, Broadband Projects

11. Can Pandemic Recovery Funds be pooled with other resources?

Generally, Pandemic Recovery Funds may be pooled with other resources for eligible uses.

12. Can Pandemic Recovery Funds be blended or braided with other funds?

Generally, Pandemic Recovery Funds may be blended or braided with other funding streams so long as all activities are eligible under all funding streams. However, Pandemic Recovery Funds may not be used to fund an activity that is not, in its entirety, an eligible use.

13. What are ineligible uses of the Pandemic Recovery Funds?

• Conflict with or Contravene Purpose of ARPA
• Undermine Efforts to Stop Spread of COVID-19
• Violating Existing Laws or Regulations
• Deposit the Funds into Pension Funds
• Use the Funds for Debt Service
• Use the Funds to Replenish Financial Reserves
• Use the Funds to Satisfy Obligations Arising from Judicial Settlements or Judgments
• Self-Deal or Violate Ethics Rules

14. What is a pension fund?

A pension fund is a defined benefit plan and does not include a defined contribution plan.

15. Is the funding one-time or reoccurring?

The funding is one-time only. The funding may be provided in a variety of ways (i.e lump sum, paid to contractors directly, reimbursement, etc.) and will be determined on a case-by-case basis. Most likely, the earliest that the funds will be provided will be in July of 2022.

16. How will the Pandemic Recovery Funds be paid out?

The funding may be provided in a variety of ways (i.e lump sum, paid to contractors directly, reimbursement, etc.) and will be determined on a case-by-case basis. Most likely, the earliest that the funds will be provided will be in July of 2022.

17. Can the County transfer Pandemic Recovery Funds?

Yes. Namely, the County may transfer Pandemic Recovery Funds to subrecipients to carry out eligible uses.

18. Who is a subrecipient?

A subrecipient carries out eligible uses on behalf of the County. A subrecipient is subject to subrecipient monitoring and reporting requirements.

19. Who is a beneficiary?

A beneficiary benefits directly from the Pandemic Recovery Funds. For example, individuals or end users receiving services of a project are  beneficiaries. 

20. Who is presumed "impacted"?

The term "presumed impacted" means that certain entities have already been deemed to have been impacted by the Pandemic.  Thus, no further analysis has to be performed. Other entities, those not deemed impacted, will need to justify why they have been impacted by the Pandemic in order to potentially receive the Pandemic Recovery Funds. 

Presumed Impacted

General Public (COVID-19 Mitigation and Prevention AND Behavioral Health Subcategories of Respond to Public Health)

Households with Low- or Moderate-Income

Households that have Experienced Unemployment or Food/Housing Insecurity

Households that Qualify for the Children’s Health Insurance Program (CHIP), Childcare Subsidies through the Child Care and Development Fund (CCDF) Program, or Medicaid Programs

Households that Qualify for Affordable Housing Programs from the National Housing Trust Fund (NHTF) or the Home Investment Partnerships Program (HOME)

Any Student that Lost Access to In-Person Instruction for a Significant Period of Time, for Services to Address Lost Instructional Time in K-12 Schools

Small Businesses or Nonprofits that Experienced- Decreased Revenue or Gross Receipts, Financial Insecurity, Increased Costs, Capacity to Weather Financial Hardship, Challenges Covering Payroll, Rent or Mortgage, and Other Operating Costs

Travel, Tourism, and Hospitality Industries

Other Industries that Experienced at Least Eight Percent Employment Loss from Pre-Pandemic Levels OR Had Comparable or Worse Economic Impacts as did the Travel, Tourism, and Hospitality Industries 

21. Who is presumed "disproportionately impacted"?

The term "presumed disproportionately impacted" means that certain entities have already been deemed to have been disproportionately impacted by the Pandemic. Disproportionately refers to meaningfully more severe. Thus, no further analysis has to be performed. Other entities, those not deemed impacted or disproportionately impacted, will need to justify why they have been impacted or disproportionately impacted by the Pandemic in order to potentially receive the Pandemic Recovery Funds. 

*If Disproportionately Impacted, ALSO Impacted

Presumed Disproportionately Impacted

Households with Low-Income

Households Residing in Qualified Census Tracts (QCTs)

Households that Qualify for Temporary Assistance for Needy Families (TANF), Supplemental Nutrition Assistance Program (SNAP), Free and Reduced-Price Lunch (NSLP) and/or School Breakfast (SBP) Programs, Medicare Part D Low-Income Subsidies, Supplemental Security Income (SSI), Head Start and/or Early Head Start, Special Supplemental Nutrition Program for Women, Infants, and Children (WIC), Section 8 Vouchers, Low-Income Home Energy Assistance Program (LIHEAP), or Pell Grants

Title I Eligible Schools, if Used to Address Educational Disparities

Households Receiving Services Provided by Tribal Governments

Households Residing in the U.S. Territories or Receiving Services from these Governments

Small Businesses or Nonprofits that are Operating in QCTs, Operated by Tribal Governments or are on Tribal Lands, or are Operating in the U.S. Territories

22. What is a Title I Eligible School?

Title I Eligible Schools are schools eligible to receive services under section 1113 of Title I, Part A of the Elementary and Secondary Education Act of 1965, as amended (20 U.S.C. 6313), including schools served under section 1113(b)(1)(C) of that Act. 

23. How is low-income defined?

Tool to Assess SLFRF-LMI-tool.xlsx (live.com)

At or Below 185 Percent of Federal Poverty Guidelines for the Size of its Household Based on the Most Recently Published Poverty Guidelines by the Department of Health and Human Services

2021 Poverty Guidelines | ASPE (hhs.gov) 

OR

At or Below 40 Percent of the Area Median Income for its County and Size of Household Based on the Most Recently Published Data by the Department of Housing and Urban Development

https://www.huduser.gov/portal/datasets/il/il2021/select_Geography.odn

24. How is moderate-income defined?

Tool to Assess SLFRF-LMI-tool.xlsx (live.com)

At or Below 300 Percent of Federal Poverty Guidelines for the Size of its Household Based on the Most Recently Published Poverty Guidelines by the Department of Health and Human Services

2021 Poverty Guidelines | ASPE (hhs.gov)

OR

At or Below 65 Percent of the Area Median Income for its County and Size of Household Based on the Most Recently Published Data by the Department of Housing and Urban Development

https://www.huduser.gov/portal/datasets/il/il2021/select_Geography.odn

25. What are Qualified Census Tracts (QCTs)?

The term “Qualified Census Tract (QCT)” means any census tract which is designated by the Secretary of Housing and Urban Development and, for the most recent year for which census data are available on household income in such tract, either in which 50 percent or more of the households have an income which is less than 60 percent of the area median gross income for such year or which has a poverty rate of at least 25 percent.

County Table | HUD USER

2021 and 2022 Small DDAs and QCTs | HUD USER

26. What are the County's priorities?

Be Collaborative, Effective, Equitable, Inclusive, Impactful, Measurable, Objective, Responsible, Transformative, and Transparent

Consider Community Priorities

-Affordable Housing

-Mental Health/Behavioral Healthcare Services

-Childcare

-Public Health Emergency

-Digital Access

Consider Projects that Specifically Target and are Informed by Historically Unserved and Underserved Communities

Consider Projects that Directly Respond to the Impacts of the Pandemic

Consider Projects that Have a Potential Long-Term, Transformative Impact

27. What is meant by "transformative"?

Generally, transformative means to address root causes or systemic barriers to achieving economic opportunity or overall well-being, with impact occurring at a neighborhood, community or broader level.

28. What is meant by "underserved"?

Underserved means populations sharing a particular characteristic, as well as geographic communities, that have been systemically denied a full opportunity to participate in aspects of economic, social, and civil life. This includes populations or communities that have experienced long-standing disparities that were amplified by the Pandemic, or who face continued barriers to a full and equitable recovery. It also includes historically marginalized communities that have been adversely affected by persistent poverty and inequality. 

29. Are there compliance and reporting requirements?

Yes, Recipient Compliance and Reporting Responsibilities | U.S. Department of the Treasury 

30. What if the Pandemic Recovery Funds are used in violation of the Final Rule?

Any of the Pandemic Recovery Funds used in violation of the Final Rule are subject to remediation and recoupment.