Maximizing Your Stimulus Series, Part II: ARRA Funds: Strings ARE Attached

May 04, 2009

There are unique requirements associated with ARRA funding, which require some planning and coordination in the early stages of many initiatives and projects.

First, the ARRA requires that materials used in stimulus-funded projects be American-made. Section 1605 of the Act requires that “all iron, steel and manufactured goods used ... are produced in the U.S.” except in the following cases (as noted in the National Electrical Manufacturer’s Association’s helpful overview of Section 1605).
 

  • If the head of the federal agency concerned determines adherence would be “inconsistent with the public interest,”
  • If iron/steel/manufactures are not produced in the U.S. in sufficient and available quantities, or
  • If inclusion of U.S. products would increase overall project cost by 25 percent or more.

The Section 1605 requirements are unlike those of the Buy America Act (1933) and subsequent Buy America law, and public agencies should be advised of those differences.

Second, stimulus-funded project contracts must require payment of federal prevailing wages (per the Davis-Bacon Act wage requirements). This could create significant delays on shovel-ready projects if those projects were bid without requiring prevailing wage rates.

The last noteworthy requirement of the ARRA is its Section 1511 requirement that the mayor or other chief executive certify that the "infrastructure investment has received the full review and vetting required by law and that the chief executive accepts responsibility that the infrastructure investment is an appropriate use of taxpayer dollars." The certification must include a description of the investment, the estimated total cost, and the amount of covered funds to be used. In addition, the certification must be posted on the agency’s website and linked to the Recovery.com website.

Part III in our series on Maximizing Your Stimulus, will be reporting requirements for stimulus-funded projects.

If you have questions about how you can get your public project off the ground with ARRA funds, please contact Ben Reyes, Sam Sperry or Ed Grutzmacher.

Contact
Benjamin T. Reyes
Principal
E-mail
510.808.2000

Ben Reyes counsels the firm’s clients in the areas of municipal and public agency law, energy, construction, procurement and elections. He is the city attorney for the cities of Pinole and Union City, and serves as District Counsel for the Stege Sanitary District.
Edward Grutzmacher
Senior Associate
E-mail
510.808.2000

Edward Grutzmacher represents public entities and private clients in all stages of land use entitlements, from initial application through final administrative action. He also has extensive experience in litigation arising from land use entitlements, including cases involving the California Environmental Quality Act (CEQA), the National Environmental Policy Act (NEPA), the State Planning and Zoning Law, the Coastal Act, the Subdivision Map Act, the Cortese-Knox-Hertzberg Act and the Mitigation Fee Act.
Samuel Sperry
Of-Counsel
E-mail
510.808.2000

Sam Sperry  has considerable experience in public finance, with an emphasis in the area of California land-secured financing and redevelopment agency tax allocation bond financing. He has a broad depth of knowledge in special assessment and Mello-Roos special tax financing in California and is the firm’s principal resource person on issues pertaining to Proposition 218.