Allocation Methodology for Metropolitan Cities
Summary
A Treasury document dated May 10, 2021 describing its methodology for allocating Coronavirus Local Fiscal Recovery Fund (CLFRF) payments to metropolitan cities under the American Rescue Plan Act. The CLFRF provides $45.57 billion to metropolitan cities, a term that includes cities that relinquish or defer that status under the CDBG program; after consulting HUD staff, Treasury identified 142 such cities. Each city's amount follows the formula in section 106(b) of the Housing and Community Development Act of 1974, with 'all metropolitan cities' substituted for 'all metropolitan areas'. Treasury applied the formula using 2019 Population Estimates, American Community Survey data for 2015-2019 and the 1960 and 1980 decennial census counts. A footnote states that 2020 population data for metropolitan cities would not be available until May 27, 2021.
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Coronavirus State and Local Fiscal Recovery Funds
Allocations to Metropolitan Cities
May 10, 2021
The American Rescue Plan Act (the Act) established the Coronavirus State Fiscal Recovery
Fund (CSFRF) and Coronavirus Local Fiscal Recovery Fund (CLFRF), which provide a
combined $350 billion in assistance to eligible state, local, territorial, and Tribal governments to
help turn the tide on the pandemic, address its economic fallout, and lay the foundation for a
strong and equitable recovery. This document describes Treasury’s methodology for allocating
the funds to metropolitan cities.
Metropolitan Cities
The CLFRF provides $45.57 billion to metropolitan cities. The term “metropolitan city” is
defined “in section 102(a)(4) of the Housing and Community Development Act of 1974 (42
U.S.C. 5302(a)(4)) and includes cities that relinquish or defer their status as a metropolitan city
for purposes of receiving allocations under section 106 of such Act (42 U.S.C. 5306) for fiscal
year 2021.”
To identify cities that have relinquished or deferred their status as a metropolitan city in the
CDBG program, Treasury consulted with HUD staff. Based on these consultations, Treasury
determined that there are 142 such cities, which are treated as metropolitan cities for the purpose
of CLFRF in accordance with the Act.
The Act also specifies that each metropolitan city shall receive “an amount determined for the
metropolitan city consistent with the formula under section 106(b) of the Housing and
Community Development Act of 1974 (42 U.S.C. 5306(b)), except that, in applying such
formula, the Secretary shall substitute ‘all metropolitan cities’ for ‘all metropolitan areas’ each
place it appears.”
CDBG formula
The CDBG (Community Development Block Grant) Program provides annual grants on a
formula basis to states, cities, and counties to address community development needs. Under the
Housing and Community Development Act of 1974, CDBG allocations for metropolitan cities
and urban counties are determined by a formula, which uses several objective measures of
community needs, including the extent of poverty, population, housing overcrowding, and age of
housing. Each of these measures examines a community’s needs in relation to all “metropolitan
areas,” which is defined to include both metropolitan cities and urban counties. 1 But for
1
42 U.S.C. § 5306(b).
1
metropolitan cities, one measure – the “population growth lag” 2 – is compared against other
metropolitan cities rather than metropolitan areas.
To apply the CDBG formula, Treasury also consulted HUD staff and gathered data from the U.S.
Census Bureau. The Act requires Treasury to use the most recent available population data from
the U.S. Census Bureau, which, at the time of publication of the Interim Final rule, is data for
2019. 3 The Act does not specify the sources for the other components of the CDBG formula. In
consultation with HUD, Treasury used the following datasets to apply the CDBG formula:
• U.S. Census Bureau, Population Estimates Program, data for 2019 (for population)
• U.S. Census Bureau, American Community Survey, data for 2015-2019 (for number of
people in poverty and housing-related variables)
• U.S. Census Bureau, 1960 and 1980 decennial census counts (for determining the extent
of the population growth lag)
Allocation determination
The Act provides that the Secretary shall substitute “all metropolitan cities” for “all metropolitan
areas” in each place it appears. This substitution removes urban counties, which are provided for
separately under the Act, 4 from the ratios used in the calculation of allocations for metropolitan
cities.
The Act also provides that the Secretary shall allocate and pay to each metropolitan city an
amount determined for the city “consistent with” the CDBG formula. As noted, the CDBG
formula uses six weighted variables. 5 This formula reflects an approach taken since the 1970s
on how to assess communities’ needs for funds to provide suitable living environments and
expanded economic opportunities, particularly for low-income communities. But applying the
formula solely by substituting “all metropolitan cities” for “all metropolitan areas” has the effect
of changing the relative importance of the variables: in particular, it alters the weight normally
assigned to “population growth lag.” While substituting “all metropolitan cities” for “all
metropolitan areas” ensures that all of the metropolitan cities’ allocation will be distributed, a
substitution that changes the relative importance of the variables that drive the underlying CDBG
formula would produce results that are not “consistent with” with the formula, as the statute
requires.
To achieve the statutorily mandated consistency with the CDBG formula, while still
“substitut[ing] ‘all metropolitan cities’ for ‘all metropolitan areas’ each place it appears,”
Treasury has adjusted the relative weights of the ratios that make up the formula to reflect the
same relative importance of the ratios absent the substitution.
2
Population growth lag refers to difference between the actual number of residents in a metropolitan city or urban
county and the number of persons who would have been residents if that city or county’s population had grown
since 1960 at the average population growth rate of all metropolitan cities. For metropolitan cities and urban
counties whose boundaries have changed, the CDBG formula incorporates an adjustment using 1980 data.
3
While Census has released 2020 population data for states, 2020 population data for metropolitan cities will not be
publicly available until May 27, 2021. Consequently, at time of publication, the most recent available population data
for metropolitan cities was as of 2019. See: https://www.census.gov/programs-surveys/popest/about/schedule.html
4
See 42 U.S.C. § 803(b)(3).
5
See 42 U.S.C. § 5306(b)(3).
2
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