Baltimore to reallocate $68M in federal ARPA funds to meet year-end deadline

Emily Opilo, Baltimore Sun
·3 min read

Baltimore is reallocating nearly $68 million in federal American Rescue Plan Act funds in hopes of meeting an end-of-year deadline to have the money obligated, officials said Thursday.

The majority of the funds, about $66.5 million, will come from five grant awards that are being reduced in departments including transportation, health and the Mayor’s Office of Neighborhood Safety and Engagement. Another $1.4 million was freed from projects that came in under budget, said Shamiah Kerney, head of the city’s Office of Recovery Programs.

City officials said in February they were making contingency plans to substitute projects in danger of not meeting the Dec. 31 deadline to obligate the city’s $641 million allocation. Funds are considered “obligated” when they are assigned to a contract, purchase order or invoice that’s been approved by the city. The city must meet a separate deadline for actually spending the funds which will come Dec. 31, 2026.

Spending and obligation rates for some of the city’s funding have lagged in Baltimore but also in other cities that have received the funds, The Baltimore Sun found. Baltimore has been judging potential projects against a rubric that looks at the public good they create, risks involved and impact on equity.

During a budget hearing before the Baltimore City Council on Thursday, Kerney outlined 11 new expenditures planned for the reallocated funds. Those include:

  • $20.8 million for public spaces and parks to assist with the cost of the new Gardenville Recreation Center, renovate the Greater Model Pool and fund the construction of the South Baltimore Recreation Center.

  • $10.2 million for school design, renovations and scholarships to recent graduates. Projects will include design work at City Springs Elementary/Middle School and Edmondson High School, air conditioning for Northwestern High School and upgrades to the football field at Mergenthaler Vocational Technical High School.

  • $10 million for fire safety equipment and fire station improvements.

  • $6 million for one-time incentives to city employees.

  • $4 million for a previously announced fellowship for historically Black colleges and universities.

Funds will be reallocated from five different areas of the city budget.

  • The Department of Health will lose $35 million originally allocated for pandemic-related expenses. Officials found many costs incurred were eligible for reimbursement from the Federal Emergency Management Agency.

  • The Department of Transportation will lose $14 million for street resurfacing. A different funding source was found for the expense from Highway User Revenue, Kerney said.

  • The Mayor’s Office of Neighborhood Safety and Engagement will lose $9.5 million due to the slower than anticipated implementation of the Returning Citizens Behind the Wall program. The program is intended to reduce recidivism by offering services to the incarcerated before and after they are released.

  • The Office of Broadband and Digital Equity will lose $5 million intended for broadband and infrastructure projects. Spending has been slower than anticipated due to supply chain and procurement delays, city officials said.

  • An additional $3 million will be trimmed from funds set aside to restore positions frozen during the pandemic.

The reallocation of funds will also be used to extend the life of the Office of Recovery Programs which was originally expected to be disbanded at the end of 2026, when all ARPA funds must be spent. Kerney said $4.4 million will be used to pay for the office through June 2027, after a report is due to the U.S. Treasury in April of that year.

Mayor Brandon Scott’s administration, which has been responsible for allocating the ARPA funds, 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.