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

Baltimore is reallocating nearly $68 million in federal funds from the American Rescue Plan Act in hopes of meeting a year-end deadline for the money to be obligated, officials announced Thursday.

The majority of the funds, about $66.5 million, will come from five grants that are being cut in departments including Transportation, Health and the Mayor’s Office of Neighborhood Safety and Engagement. Another $1.4 million was freed up through projects that came in under budget, said Shamiah Kerney, head of the city’s recovery programs office.

City officials said in February they were preparing contingency plans to replace projects at risk of missing the Dec. 31 deadline to apply for the city’s $641 million allocation. Funds are considered “obligated” when they are allocated to a city-approved contract, purchase order, or invoice. The city must meet a separate deadline to actually spend the funds, which is December 31, 2026.

Spending and bond rates for some of the city’s funding are lagging in Baltimore, but also in other cities that received funds, the Baltimore Sun found. Baltimore evaluated potential projects according to a rubric that examines the public good they create, the risks involved and their impact on equity.

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

$20.8 million for Public Spaces and Parks to contribute to the cost of the new Gardenville Recreation Center, renovate the larger model pool, and fund construction of the South Baltimore Recreation Center.
$10.2 million for school design, renovation and scholarships for recent graduates. Projects will include design work at City Springs Elementary/Middle School and Edmondson High School, air conditioning at Northwestern High School, and soccer field upgrades at Mergenthaler Vocational Technical High School .
$10 million for fire safety equipment and fire station improvements.
$6 million for one-time incentives for city employees.
$4 million for a previously announced scholarship for historically black colleges and universities.

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

The Department of Health will lose $35 million initially allocated for pandemic-related expenses. Officials found that many of the costs incurred were eligible for reimbursement from the Federal Emergency Management Agency.
The Department of Transportation will lose $14 million on street resurfacing. A different funding source was found for expenses coming from highway rider revenue, Kerney said.
The Mayor’s Office of Neighborhood Safety and Engagement will lose $9.5 million due to slower-than-expected implementation of the Return Citizens Behind the Wall program. The program aims to reduce recidivism by providing services to incarcerated people before and after their release.
The Office of Broadband and Digital Equity will lose $5 million intended for broadband and infrastructure projects. Spending was slower than expected due to delays in the supply chain and purchasing, city officials said.
An additional $3 million will be removed from funds set aside to restore positions frozen during the pandemic.

The reallocation of funds will also serve to extend the life of the Office of Recovery Programs, which was originally scheduled to be disbanded at the end of 2026, when all ARPA funds must be spent. Kerney said $4.4 million would be used to fund 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, responsible for allocating ARPA funds, has favored allocating funds to a wide variety of issues. Initial allocations included $50 million for public safety, $100 million for housing and $35 million for municipal high-speed internet. That approach has drawn criticism from some, including city council members, who would prefer the money be spent on several major transformational projects or instead directed toward quality-of-life issues for city residents.