The American Rescue Plan Act (“ARPA”) was enacted in March 2021 providing an unprecedented $1.9 trillion in direct relief to combat the effects Covid-19, whether it be negative economic impacts, public health implications, revenue loss, or identified needs in infrastructure.  Pennsylvania and its municipalities received approximately $14 billon in those federal ARPA funds!

ARPA funds come with certain new reporting requirements.  For municipalities, the first round of that new reporting (the “Project and Expenditure Report”) is due to the U.S. Treasury by April 30, 2022.  Every municipality that received ARPA funds must file this report (even if you haven’t spent anything yet).

Furthermore, and this is especially important,
Continue Reading ARPA Reporting due April 30, 2022!

In December 2017, former President Donald Trump signed into law the Tax Cuts and Jobs Act. Among the many provisions of the Act was a provision that eliminated the tax exemption for municipal bonds that advance refunded another series of bonds. Prior to its passage, issuers had the ability to issue such bonds on a tax-exempt basis, and did so for a variety of reasons, including to achieve debt service savings. With the loss of tax-exempt status for advance refunding bonds issued after the passage of the Act, issuers and their advisors have searched for alternatives to the traditional tax-exempt advance refunding model.

In this article, we explore some of the alternatives that issuers have applied to achieve the same or similar benefits that would be achieved with a traditional tax-exempt advance refunding. First, we discuss the use of “forward delivery” bonds, where the bonds are sold, but not delivered to investors until a much later date in the future; second, we consider so-called “Cinderella” bonds, which are issued taxable but later convert to tax-exempt; and finally, “tenders and exchanges,” where issuers, often in conjunction with a current issuance, make an offer to investors to acquire their outstanding bonds, either for purchase or exchange.
Continue Reading Four Years On, Alternatives to Tax-Exempt Advance Refundings Continue to Proliferate in Municipal Bond Market

As colleges and universities develop and implement sustainability plans to reduce their carbon footprint, there remains the question as to how to fund these sustainability plans.  Some colleges and universities look to federal and state grants for a portion of this funding and some look to donors.  In addition to these options,  there is a new development in the debt market which could also lead to lower interest rates for issuers as a result of increased demand:  ESG bonds and Green bonds.
Continue Reading Why ESG Bonds and Green Bonds May Help Colleges and Universities with Their Sustainability Plans

The United States Department of the Treasury recently published its Final Rule implementing the Coronavirus State and Local Fiscal Recovery Funds (SLFRF) program established by the American Rescue Plan Act of 2021 (ARPA).  The Final Rule adopts with amendments the Interim Final Rule published by Treasury on May 17, 2021. The Final Rule updates the rules governing the expenditure of funds received by public entities under the program.
Continue Reading Treasury Issues Final Rule on Expenditure of State and Local Coronavirus Recovery Funds

Recognizing the importance of The American Rescue Plan Act of 2021 (ARPA), our  colleague, Attorney Tim Horstmann, wrote the first article in this series titled “The American Rescue Plan Act of 2021. Here’s What to Expect” in April 2021 and in July 2021 Tim penned an article titled “ARPA Windfall: What May Pa. and Its Municipalities Do With This Money?” Adding to this series, we will now discuss what to expect in an ARPA audit.  This article will focus on Pennsylvania’s $13,450,275,500.40 portion of the $350B Coronavirus State and Local Fiscal Recovery Funds Program (CSLFRF), which is the specific program under ARPA that provides new funding to tribal governments, states, territories, and local governments across the United States to aid in their recovery from the COVID-19 pandemic.
Continue Reading ARPA Audits– What to Expect and What You Can Advise Your Clients to Do Now

On Friday, September 10, 2021, the House Ways and Means Committee released the text of a bill – known as the “Build Back Better Act” – that would restore the ability of state and local governments to issue tax-exempt “advance refunding” bonds, i.e., bonds issued more than 90 days before the redemption date of the bonds to be refunded.
Continue Reading Tax-Exempt Advance Refundings Included in Proposed Build Back Better Act

On July 16, 2021, the Pennsylvania Department of Education (“PDE”) submitted its American Rescue Plan Act (“ARP”) Elementary and Secondary School Emergency Relief Fund (“ESSER”) Plan to the United States Department of Education (“USDE”).  ARP ESSER is sometimes referred to as “ESSER III.”  Pennsylvania’s 78-page plan can be found here:  Pennsylvania ARP ESSER State Plan.  Less than a month later, on August 5, 2021, USDE approved Pennsylvania’s ARP ESSER Plan.

That plan approved nearly $5 billion in federal funding to flow to public school districts, including charters (referred to as a Local Education Agency (“LEA”)) across the Commonwealth.[1]  If you are curious as to what was allocated for your school district, that can be found at PDE’s website.  Although there is not a specific deadline to apply for ARP ESSER funds, PDE strongly encouraged LEAs to apply by September 1, 2021.
Continue Reading The Pennsylvania School Board Director’s Quick-Guide to ARP ESSER/ESSER III Funding

A recent decision from the Pennsylvania Prevailing Wage Appeals Board (the “Board”), if affirmed, would have dramatic consequences for private, nonprofit colleges and universities that rely on bonds issued by public entities to finance their construction projects. The decision, In Re: Grievance filed by International Brotherhood of Electrical Workers, Local No. 98, Docket No. PWAB-1G-2018, was recently appealed to the Pennsylvania Commonwealth Court.

In the case, the Board determined that the Pennsylvania Prevailing Wage Act (the “Prevailing Wage Act”), applies to construction projects at Ursinus College (the “College”), a private, nonprofit college, because the projects were financed by bonds issued by the Montgomery County Higher Education and Health Authority (the “Authority”), a municipal authority and public instrumentality of the County of Montgomery organized under the Pennsylvania Municipality Authorities Act (the “Authorities Act”).
Continue Reading Private College and University Construction Projects Financed by Bonds Are Subject to Prevailing Wage Act, Appeals Board Finds

McNees Wallace & Nurick LLC is pleased to announce the addition of accomplished public finance attorney Frannie Reilly to its Devon office.  Reilly, who most recently led her own practice in Swarthmore, adds extensive experience to the firm’s Public Finance & Government Services, Corporate & Tax, and Charitable and Non-Profit Groups.

Reilly has served as