With the deadline to obligate $641 million in American Rescue Plan Act money now less than a year away, Baltimore officials said Thursday that they are creating contingency plans to substitute projects that are in danger of not meeting the deadline.
The federal money, distributed to jurisdictions across the country in the wake of the COVID-19 pandemic, must be obligated by Dec. 31, meaning the funds are assigned to a contract, purchase order or invoice that’s been approved by the city. Cities have longer to actually spend the funds before they risk forfeiture, however. The spending deadline is not until Dec. 31, 2026.
Funds have been slow to be obligated, particularly in some city departments that have faced challenges with supply chain delays and turnover in staffing and leadership. The city’s Office of Recovery Programs, which was created to vet and monitor spending, has also spent time judging potential projects against a rubric that looks at the public good they create, risks involved and impact on equity.
As a result, obligation and spending rates have lagged. In the Department of Recreation and Parks, where $41 million has been committed, only 6.9% of its funds were spent as of the end of 2023, city staff reported Thursday. In the Mayor’s Office of Homeless Services, which has $73 million committed, it’s 7.3%.
“The obligation deadline is for sure going to be a challenge,” Shamiah Kerney, director of the city’s Office of Recovery Programs, told members of the Baltimore City Council on Thursday. “A lot of money has to be moved in a short period of time.”
The federal government awarded Baltimore $641 million in funds in 2021, the distribution of which has been overseen by Mayor Brandon Scott’s administration. Scott, a Democrat, has favored allocating the funds across a wide variety of issues. Early allocations included $50 million for public safety, $100 million for housing and $35 million toward municipal broadband internet. The approach has drawn criticism from some, including members of the City Council, who would prefer to see the money spent on several large transformative projects or alternatively directed toward quality-of-life issues for city residents.
Kerney said she and her staff are working with the heads of various city agencies to identify projects that are in jeopardy of not being obligated by the end-of-year deadline. The city should have an assessment by the end of March and can then begin looking at shifting where funds are committed, she said.
Kerney said the city maintains a list of eligible proposals submitted for the funding, but unfunded projects are not ranked.
In some cases, spending has been slow for departments that more recently received commitments for funding. In the Department of Recreation and Parks, the $41 million commitment was announced in February 2022 to be spent on the rehabilitation of recreation centers, pools and playgrounds. Kerney said Thursday that there have been delays in design and bid preparation, but that the city is on target to complete all the playgrounds, athletic courts and trail projects this year.
Pools and recreation centers will begin the bidding process “fairly soon,” she said. One pool has been bid so far, and responses are expected to be returned in March, Kerney added.
In the Mayor’s Office of Homeless Services, where only 7.3% of its funds have been spent, the figure does not include one sizable project: the purchase of two hotels to offer shelter for homeless residents announced Wednesday. If approved by the Board of Estimates, Baltimore expects to spend $15.2 million to buy a Sleep Inn and Holiday Inn Express. An additional $3.2 million will pay for the seller to manage the hotels through the end of the year.
The city reported no spending, however, on several additional line items within the ARPA commitment to homeless services including for a housing accelerator fund, which offers grants for the construction of affordable housing. Kerney said applications for the program have been submitted and evaluation panels have completed their work. Awards are expected to be announced by the end of March, she said.
The Mayor’s Office of Homeless Services has been under new leadership since September. Irene Agustin, the head of the office since June 2021, abruptly resigned, and was replaced by Ernestina Simmons, a local nonprofit leader.
Baltimore’s Department of Public Works, where nearly $10 million in ARPA funds have been committed, reported a 9.6% spending rate. An agreement for the funds wasn’t finalized until December, so the city is moving quickly to obligate the money, Kerney said. The allocation is slated to pay for improvements to city facilities, the purchase of routing software and new garbage trucks.
Federal dollars are also paying for recycling crews needed to restart weekly recycling for the first time in several years. Scott said recently that weekly collection will resume the first week in March. Money needed to pay the crews will be completely spent by June, Kerney said.
