In a nutshell
- Cities across the country have received half of their federal Fiscal Recovery Fund dollars through the American Recovery Plan Act, while the other half will arrive May 2022.
- The U.S. Treasury provides guidance encouraging local governments and other recipients to use a community engagement strategy to allocate the federal dollars.
- Detroit might consider examining how other cities are meeting the federal guidelines and engaging their communities as it moves forward with plans to spend future ARPA funding.
During my interview on American Black Journal to discuss Detroit’s ARPA funding, host Stephen Henderson asked about the city’s community engagement process and how funding allocations were determined. The questions made it clear that Detroiters want to know “how deep does the community engagement process go”, “who is responsible for the engagements”, and “how to access information about Detroit’s process.”
Cities all across the country have received the first half of their ARPA dollars, with the second half scheduled to arrive in May 2022. They must allocate all of their funding by December 31, 2024, and spend it all before 2027. The U.S. Treasury Department advised cities not to commit all of their dollars immediately as a way to respond to changing health and economic circumstances in the coming months. As of the end of October, Detroit has spent only a fraction ($78,225) of its total federal award, but plans for spending the entire amount were adopted earlier this year.
One of the biggest reasons for the delay of spending is politics and priorities. Residents want leaders to focus on rebuilding neighborhoods, fighting poverty, and improving public safety. While the city has earmarked funding through 15 appropriation bills, programs and projects are still in the process of being developed.
Detroit is using a top-down community engagement approach to allocate its ARPA dollars, a model that we find differs from that employed by peer cities across the country.
Why is Community Engagement so Important?
Generally, decisions around spending/allocating federal funds do not require a significant community engagement effort by local governments. Most federal spending is “formula-driven” and funding designed to meet federal objectives.
So, why does Detroit and other cities have to engage with so many community stakeholders with the ARPA funding? The simple answer is because the federal government mandates it under the ARPA law.
The Treasury Department provides guidance that encourages cities, counties, and other government entities on the importance of deploying a community engagement strategy throughout the process of appropriating ARPA dollars. The federal government mandates local governments to provide quarterly Project and Expenditure reports that “will include financial data, information on contracts and subawards over $50,000, types of projects funded, and other information.”
Counties and metropolitan cities with populations over 250,000 are required to create annual Recovery Plan Performance reports that must include key performance indicators identified by the recipient and other mandatory indicators identified by the Treasury Department. Reports will be posted on a “public facing website” to inform the public on where and how the ARPA dollars are being spent. Treasury’s guidance highlights the need for public input, transparency, and accountability.
The federal government has advised local governments on how to respond to community needs and has encouraged them to align spending decisions with those needs. Cities across the country, including Detroit, have adopted their own, unique models of engaging their respective communities.
Detroit’s Top-Down Mayor-Led Allocations
The need for inclusive local recovery is important as Detroit grapples with how it should prioritize competing programs, initiatives, and ideas. The federal dollars are meant to support those hit hardest by the pandemic while also investing in the economic, social, and physical infrastructure of the city.
Cities are utilizing different models to direct the federal dollars to local recovery. The community engagement processes found across the country take into account a number of factors, including the size and unique local political considerations of each jurisdiction.
The Mayor has worked with the City Council to allocate Detroit’s $826 million ARPA award. The model used is very similar to the city’s regular budget process: the Mayor releases a proposal, which is then workshopped and refined by other local stakeholders and the City Council to reach a final allocation of resources.
Mayor Mike Duggan released his proposal to spend the ARPA funding in May. The City Council approved a final plan in June. This plan included a community engagement process to gather feedback from other decision makers and the community at large. This resulted in a rigorous engagement process, including holding 65 community meetings, taking public feedback from 411 meeting participants, and reviewing 739 online survey responses.
Additionally, various city council members were engaged by hosting meetings, administering a survey, and convening joint groups working with the Mayor’s office. The chart below highlights public responses from residents and stakeholders to these various community engagements.
Detroiters’ Prioritization for ARPA Funding
Source: The City of Detroit – Detroit 2021 Recovery Plan Performance Report
The city’s community engagement meetings highlighted opportunities to adjust both technical processes of allocating funding and programmatic focuses of earmarking spending. In the final resolution that was passed by City Council, Mayor Duggan outlined the use of $400 million to restore the city’s budget and address fiscal shortfalls. The remaining $426 million was allocated toward a Detroit Future Fund to make community investments. While the funds have been allocated, the individual projects and programs still have to be developed by the city and contracts approved by City Council. During that process, the Mayor promises to continue engaging Detroiters in development of programs and projects pursuant to the requirements laid out through the Community Outreach Ordinance.
Alternative Approaches to Community Engagement
Other cities have approached the community engagement process different from Detroit’s top-down model. One example is Baltimore, a similar-sized city that embraced more of a bottom-up, grassroots approach. The Mayor of Baltimore began by outlining five key priority areas and from there, community organizations and city agencies were able to submit project proposals that aligned with the Mayor’s priority areas. Projects internally and externally are both reviewed by a team composed mostly of other agency staff according to a rubric that provides a scoring system rewarding partnerships, equity, risk mitigation, and more.
In Cleveland, grassroots organizers have been advocating for an even more community-driven, bottom-up approach utilizing a participatory budgeting process. It is possible other cities may consider participatory budgeting as a mechanism for awarding small subsets of ARPA funding to programs and projects.
Other cities like Macon, Georgia, are collaborating with local philanthropy and leveraging civic capital to make more use of the ARPA funding and maximize project impact. Macon partnered up with the Knight Foundation to ensure that the dollars the city has invested in affordable housing would go further than the ARPA allocation they have earmarked. This type of community driven effort might be an example for other cities with strong philanthropic communities.
Detroit might consider employing similar collaborative efforts, drawing on its vast non-profit, philanthropic, and foundation environment to supplement its ARPA dollars. Leveraging these outside sources of capital will increase the impact of the federal award and provide the city with more flexibility with its ARPA dollars.
Most other cities across the country are slowly rolling out their allocation process and are still developing their community engagement strategies. Some, including Milwaukee, are leading with community and stakeholder engagement that will later culminate in a proposal from the Mayor’s office. The Mayor of Milwaukee has created an ARPA Leadership Team responsible for engaging the community and gathering input that will be coordinated with other government officials to collaborate and leverage funding to maximize impact. It is a strategy that seems to be combining the top-down approach from Detroit and the collaborative approach from Macon. As Detroit moves forward with the development of projects and programs, it could consider this approach by establishing similar sorts of advisory committees that would help to leverage funding for impact maximization.
The federal ARPA funding provides a once-in-a-generation opportunity to pursue a more equitable economic recovery. Public input, engagement, and information will help to ensure that positive effects of these dollars are felt for years to come. Employing a community engagement strategy to acquire public input will work to better reflect citizens’ priorities. But is the input from the community really critical to ensuring output? How can citizens ensure that the city will work towards their priorities? These are questions that will have to be considered in the coming months as programs and projects get developed. Important decisions will be made in the coming months and years as Detroit goes through the municipal budgeting process between the Mayor and City Council about how to allocate ARPA funding. Cities like Detroit can look to one another for effective ways to manage, maximize, and generally spend their ARPA funding.
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