The U.S. Department of the Treasury through the Coronavirus Local Fiscal Recovery Fund provided a critical source of relief for smaller local governments, many of which have not received direct fiscal assistance from the federal government since the onset of the COVID-19 pandemic. Non-entitlement units of local government (NEUs) are cities serving populations less than 50,000. The State of Iowa is responsible for distributing these funds to NEUs within Iowa. Award amounts are based on the population of the NEU.

Distributions from the Local Fiscal Recovery Fund to state, then subsequently NEUs are being done in two tranches. The first tranche payments were sent out in 2021 after the state received its payment on July 23, 2021. The second tranche payment to be made no earlier than July 23, 2022, following U.S. Department of Treasury requirements, which is 12 months after the date on which the first tranche payment was paid to the state.