Laura Glesby file photo
Finance Chair Marchand: "There’s a fair amount of money that has not been spent.”
More than three years after a flood of federal pandemic-relief aid started to make its way towards New Haven, the Elicker administration has spent less than half of the $115 million received by the city — and now has two years to get the rest out the door, or potentially have to give some of that money back.
That’s the latest with the roughly $115 million that the city received through the federal American Rescue Plan Act (ARPA).
According to City Budget Director Shannon McCue, the city has spent $47.6 million in ARPA funds so far. It’s contracted another $31 million out for various projects. It has a remaining balance of around $36 million.
Those dollars have been allocated to uses ranging from police surveillance cameras to vocational-technical education grants to youth summer jobs to police overtime, rental assistance, the Department of Community Resilience, and general fund budget-balancing.
Last Monday, Finance Committee alders recommended approval of an Elicker administration plan to sign memorandums of understanding (MOU) with various city departments in order to de facto extend the deadline by which the city has to commit ARPA money that ultimately must be spent by the end of 2026 (see more on that below).
All of this comes more than three years after President Joe Biden first signed the $1.9 trillion Covid economic stimulus bill into law in March 2021. The mayor proposed and alders signed off on the first tranche of local ARPA spending in the runup to the summer of 2021; alders’ most recent ARPA allocation approval came during this fiscal year’s budget vote in May.
As McCue and two of her top city finance aides explained to the Board of Alders Finance Committee during a hearing at City Hall last Monday, New Haven — like all ARPA funding recipients — has to meet two key deadlines to ensure that it doesn’t have to give any of its $115 million back.
First, the city has to “obligate” all of its ARPA aid by Dec. 31, 2024. (“An obligation is made,” McCue said, “when a commitment is made to spend those funds.”)
Then the city has to actually spend all of this money by Dec. 31, 2026.
“It’s not as easy as it sounds to spend $115 million,” McCue told the committee. “There’s a lot of process in place,” a lot of requests for proposals to put out, a lot of bids and quotes to review.
Ron Gizzi, a project coordinator in the city’s finance department, said that his office has “an internal cutoff” of September 2026 for making sure all of these ARPA funds are spent — just to give the city enough of a “closeout period” to file all the necessary paperwork with the federal government. That means the de facto spending deadline for the city is even sooner than the feds’ Dec. 31, 2026 final spend-by date.
The reason McCue and her colleagues appeared before the Finance Committee last Monday was to pitch the alders on an accounting mechanism that should allow the city some extra flexibility around meeting the Dec. 31, 2024 ARPA “obligation” deadline.
That proposal is for the alders to authorize roughly a dozen different multi-year interdepartmental MOUs to “formalize the obligation of American Rescue Plan funds to various city departments,” as the title of the proposed order itself puts it. Those MOUs cover roughly $62 million out of the city’s $115 million total in ARPA aid.
Gizzi stressed that these proposed MOUs do not change any of the contents of the ARPA aid allocations that the alders have approved over the past three years. “This is just a mechanism to obligate the funds. The Treasury is allowing us to do that.”
These MOUs establish the city departments as “subrecipients” of the ARPA funds, thereby allowing the city to “go past that Dec. 31, 2024 deadline” if the city needs a bit more time to formally commit dollars that alders have already signed off on spending.
The MOUs, which contain numbers current as of late July, also offer a public reminder of what different departments have been tasked with spending ARPA aid on — and how much money they’ve been able to spend so far.
For example, the Engineering Department MOU states that its ARPA spending is not to exceed just over $14 million. As of late July, it had spent around $5.5 million of that money. Its ARPA-funded projects included building out “youth centers” at such city-owned sites as the West Rock Nature Center, Coogan Pavilion, Barnard Nature Center, and Trowbridge Rec Center; “decarbonizing” city buildings with the help of mini-splits and heat pumps; and the construction of walking and biking infrastructure and play structures at Long Wharf Park.
Just to be clear, East Rock Alder Anna Fetsa asked last Monday, all of the city’s ARPA aid has already been allocated, right? That is, the mayor has proposed and the alders have approved how to spend all $115 million of New Haven’s ARPA aid? Even if all of that money hasn’t yet been formally “obligated,” per the Treasury’s definition of that term, let alone spent?
“I believe everything is allocated now” with the last batch included in the 2025 budget, Gizzi said.
McCue and her team said they meet with city departments on a quarterly basis to talk about the ARPA programs, to ensure that departments are on track to spend the money they’ve been assigned.
“I’m glad that the Finance Department was able to do a deep dive to get an understanding of the rules and regulations of this funding,” Dixwell Alder Jeanette Morrison said in support of the MOU proposal, “and to be able to have another two years to really do some good.”
Westville Alder and Finance Committee Chair Adam Marchand also spoke up in support of the interdepartmental MOU proposal, with the goal of providing a de facto longer timeline to obligate ARPA funds.
But, he continued, “there’s a fair amount of money that has not been spent.” And the city has only two years to finishing spending all of those dollars — especially if it has set an internal deadline of September 2026.
“There’s a lot of money that hasn’t been spent,” he repeated. “It’s possible that we won’t spend it all.” It’ll be in the interest of the Board of Alders to receive “further progress reports” from the administration on how, and how quickly, these dollars are being spent.
The committee alders then voted unanimously in support of the interdepartmental MOUs proposal, thereby sending it to the full Board of Alders for further review and a potential final vote.
And why exactly has the city spent less than half of its ARPA aid, with only two years left to go?
“The funding would be easier to spend if we spent it on a couple really big projects,” Mayor Justin Elicker said in a follow-up phone interview. But, “we wanted to spend it based on the extensive community conversations we had, based on a broad group of investments in the community that were guided by what the community wanted.”
“It’s a lot harder having many, many smaller contracts going to nonprofit partners and different initiatives,” he continued. And yet, “I think the result for New Haven is going to be much better than if we had spent on a bunch of really big projects.”
He concluded by emphasizing that the city intends to spend every ARPA dollar it’s received by the 2026 deadline. “Everyone on our team” will be clear on this goal, he said, that “we will not give a dollar back to the federal government.”
See below for parts of the proposed MOUs for the Engineering and Community Resilience departments. Click here to download all of the relevant proposed MOUs.
