What does the American Rescue Plan mean for fire departments?

The American Rescue Plan Act of 2021, also called the COVID-19 Stimulus Package or American Rescue Plan, is a $1.9 trillion economic stimulus bill passed by the 117th United States Congress and signed into law by President Joe Biden on March 11, 2021. The intent of the legislation is to speed up the United States' recovery from the economic and health effects of the COVID-19 pandemic and the ongoing recession.

To understand the impact of the American Rescue Plan on fire departments, you must first understand the legislation’s two types of mechanisms to distribute funding to eligible entities. 

Competitive Grants

The amount of funding available through the American Rescue Plan is unprecedented. Just as unique is the process being developed to distribute these funds. Many fire departments are used to applying and receiving grants through a competitive process. The American Rescue Plan contains set asides for funding specific grant programs: $100 million was included for the Assistance to Firefighters Program and an addition $200 million was included in the legislation for the SAFER Grant Program.

As of the date of this writing, we have reached out to FEMA to see if they have determined how these grant funds will be accessed. FEMA has two options. They can tack the extra $100 and $200 million onto the 2021 AFG and SAFER competitive grants or they can announce a distinct funding cycle for just the ARP money allocated for SAFER and AFG. As soon as we know more, Lexipol and FireGrantsHelp will let you know.

Formula Grants

The second funding format in the American Rescue Plan that will have an impact on fire departments is formula grants. Included in the ARP is $195 billion of direct funding to states and $130 billion to local municipalities. The amounts allocated to each governmental unit were determined through a modified CDBG formula using population size, poverty rates and measures of housing instability. Local governments will not have to apply to receive this funding. They will either receive it directly from the United States Treasury or the money will be funneled through their state government to them.

Local governments have been given more latitude than usual by the federal government on how this money may be utilized. In general, it may be used to:

• Respond to COVID -19 or its negative impacts
• Provide premium pay to eligible workers or grants to eligible employers
• Provide government services affected by reductions in revenue due to COVID -19
• Make investments in water, sewer or broadband infrastructure

The factor to keep in mind is accessing this funding for your fire department or EMS agency will be a local process. There will not be an American Rescue Plan grant application announced by the federal government. The entire process will be determined by state and local officials.

What You Can Do Now

Even though ARP funds may not reach local governments for several months, you should start your efforts now if you are going to be successful.

Begin by approaching your local leadership to determine what type of a process they will used to distribute these funds. Some items to keep in mind:

• Will there be public meetings to determine funding parameters?
• Will there be a local grant process to access ARP funds?
• Will cost estimates be needed and if so, will you need a specified number of estimates?
• Will your local government accept requests to recall laid off employees as part of their ARP funding?

The sooner you have an idea of the process your local government will use to allocate these funds the sooner you can craft your response. After meeting with local officials, your department should conduct a needs assessment and determine your funding request. If you are considering multiple items, you should prioritize them in case your local government trims the amount of money you are going to receive.

The impact of the American Rescue Plan on fire departments has the potential to be huge. As with all funding requests, don’t wait until the last minute. Start your planning process today.