City Council members don’t have powers to touch Baltimore’s share of $641 million in federal American Rescue Plan Act aid — a source of frustration for some on the panel. But the budget season coming to an end soon has offered a window into what could be an evolving plan to spend the city’s pandemic windfall in time for federal deadlines.
Mayor Brandon Scott has exclusive control over the funds and has divided the money across a broad slate of new projects touching nearly every corner of city government, from alternative approaches to gun violence to internet access to stemming hunger to housing for homeless residents. Hanging over Scott’s priorities, however, is the possibility that some parts of his strategy could soon change.
The city has until the end of 2024 to earmark all of its funds and until the end of 2026 to spend them.
So far, spending of the federal infusion has chugged along gradually. As of the end of April, Baltimore had burned through just under $93 million — or about 14.4% — of its millions, according to a recent report to the City Council.
An evolving plan?
Those deadlines could mean rerouting money from agencies or projects that have already been committed funds, Mayor’s Office of Recovery Programs Director Shamiah Kerney told council members over two budget hearings in recent weeks, noting her office has started to analyze rates of spending to make decisions about possible reallocations.
Kerney, whose office received $12.6 million to oversee and distribute the money, said she has made clear to agencies that the administration is prepared to pull back money from projects that don’t look like they’ll come together in time. Those conversations are likely to begin “sooner rather than later,” given the 2024 deadline, she said.
But how exactly — or by how much — the city’s plans could change remains unclear. The Scott administration has not specified which priorities might see changes to their funding, and a spokesperson for the mayor said only that the recovery office is in the process of assessing possible edits to the plan.
Despite assurances from the mayor’s recovery office, some have expressed wariness about the city’s capacity to comply with the federal government’s extensive and cumbersome requirements. The recovery office itself has conducted internal evaluations of the risk that any of its grant recipients run afoul of federal standards, designating many of the agencies and nonprofits overseeing the largest allotments of the city’s stimulus money as “Medium Risk/High Risk” for compliance challenges.
What happens, asked Councilman Isaac “Yitzy” Schleifer at a budget hearing earlier this month, if Baltimore falls short of federal requirements? Could the city end up on the hook for backfilling hundreds of millions of dollars in funding commitments after federal money is revoked?
Kerney responded that while there has been significant criticism about a slow rollout of pandemic aid funds, front-end delays have stemmed largely from robust efforts by her office to make sure the city dots every i and crosses every t.
“I hear and understand the concern,” Kerney said. But the former federal auditor stressed to council members that Baltimore isn’t in uncharted waters navigating how to spend its pandemic aid. The city handles federal and state grants all the time and all require compliance, Kerney noted.
“Every grant has a risk,” she said.
Money for homeless residents moves at a trickle
One of Scott’s single largest pledges in American Rescue Plan funds was a close to $75 million commitment to help house homeless residents and connect them with social services.
Since Scott announced that commitment in February of 2022, the Mayor’s Office of Homeless Services has spent a little north of $215,000, or just .3% of its federal funds.
The bulk of the near $75 million is reserved for buying hotels to provide emergency shelter for homeless residents. Baltimore has historically relied on crowded sites like school buildings as shelters, an approach that has shifted since the pandemic. But the city’s promise to acquire hotels of its own as a permanent solution for sheltering homeless residents, a plan first announced in April of 2021, has yet to materialize.
The Mayor’s Office of Homeless Services Director Irene Agustin told council members last week that what’s budgeted should be more than needed for those hotel acquisitions. The city is currently in negotiations to buy one hotel, Agustin said, though she added it’s likely the city will need to buy two in order to meet its goal of providing 275 non-congregate beds.
In addition to the hotel funds, Scott committed tens of millions to his homelessness office largely aimed at connecting unhoused residents with housing. That includes a $16 million fund to spur increased access to stable housing units paired with social service supports.
Some of these new homelessness programs should launch in the next month or so, Agustin told council members, at which point she expects to see spending “really ramping up.”
Bones for city services
A chief complaint of Scott’s spending plan for some on City Council has been the preference for a long menu of flashy initiatives over large-scale investments in the basic functions of city government. To the frustration of some elected officials, Scott promoted a broad slate of new projects even as the Department of Public Works operates scaled-back recycling pickup, the Fire Department is short on trucks, and huge swaths of the city remain desperate for cash to repair and remove thousands of vacant homes.
The tension between these opposing philosophies was on full display this budget season, as Schleifer, in particular, stressed the great needs of agencies like the Fire Department and public works, neither of which have received the American Rescue Plan money they asked for.
Still, the Scott administration has earmarked portions of its American Rescue Plan money to fill gaps in certain basic services areas — even if it’s not as much as some council members or agencies might have liked.
The Department of Public Works, for instance, has said in hearings that it applied to the administration for more than $200 million in American Rescue Plan requests. The city has made $15 million available to the agency for facility and equipment improvements, while smaller amounts are going towards public markets and a new Park Heights Library.
The administration has also released $40 million that had been set aside for budget stabilization to invest in a slate of deferred maintenance projects. Those include street resurfacing, municipal building improvements, library HVAC repairs and $16 million to chip away at enormous barriers to accessibility for Baltimore residents in wheelchairs.
Broadband timeline comes into focus
Another priority of Scott’s has been his $35 million pledge to connect low-income residents in Baltimore with internet access, as well as tech education and support aimed at closing an entrenched digital divide. The mayor stressed from the outset that his broadband commitment would be a “down payment” on an ambitious and costlier goal to close the digital divide by 2030.
This plan, too, has gotten off to a slow start. That’s due, in part, to a decision last summer to fire the head of the mayor’s broadband office, who was pursuing an expensive, New Deal-style plan to build out a network connecting every home in Baltimore to next-generation fiber optic internet. But some advocates have expressed encouragement at signs of more progress since new leadership took over the Office of Broadband and Digital Equity.
Interim Director Kenya Asli told council members the city is about halfway to its goal of pulling fiber to rec centers that aren’t on the city’s network — with 10 connections down and the rest expected to be finished later this year.
By wiring rec centers and eight public housing complexes for fiber internet, officials believe they can establish footholds in disinvested neighborhoods for possible expansions of the network down the road. Asli told council members that the city plans to put out a request for bids in July to identify which company will provide connections for public housing residents.
The broadband office also aims to install hundreds of public hotspot locations around the city, a resource Asli said should roll out in the spring of 2024. Additionally, Asli’s team has budgeted American Rescue Plan funds to canvass residents about an underutilized federal subsidy to help qualifying residents with their internet bills, as well as just over $3 million in grants for nonprofits focused on digital access.
While Baltimore’s previous broadband director had a major focus on expanding the city’s broadband infrastructure, Asli has shifted some attention toward services like digital education, device training and distributing devices, priorities she emphasized in a forum last month at Coppin State University.
The broadband office is also expecting to release a long-delayed plan this October outlining how the city intends to close the digital divide by its end-of-decade target. Asli informed her audience at Coppin State that the broadband office plans to hold meetings with community groups over the course of the summer to develop that plan.