In a nutshell:

• As of October 2022, Detroit has allocated over $744 million of its $826 million ARPA funds to initiatives that have developed project plans and budgets. 
• The federal government requires cities with more than 250,000 residents to provide performance and program reporting with the goal of increasing accountability and effectiveness.
• Detroit should focus on spending ARPA dollars in ways that it ensures funding is adequate to achieve programmatic success, avoid funding programs that may require a permanent funding source, and prioritize projects that will be impactful long-term.

Introduction

State and local governments will receive $350 billion in discretionary funds from the federal American Rescue Plan Act (ARPA) approved in 2021 to address disruptions caused by the pandemic. Detroit city officials have decided to allocate the $826 million it will receive in Coronavirus State and Local Fiscal Recovery Funds (SLFRF) to two major pots; $400 million to address budget shortfalls and $426 million for community investments. As of October 2022, Detroit has allocated over $744 million of its ARPA funds across 15 purposes/projects. 

As the chart below shows, approximately $43 million has been spent to date, with another $227 million obligated (reserved for future spending). The federal funds must be obligated by December 31, 2024, and the city has until the end of 2026 to spend these dollars.

Source: City of Detroit

Specific programs benefiting from the funding that are up and running include the Skills for Life job training program, Renew Detroit Home Repair program, a basement flooding protection program, Community Health Corps, foreclosure prevention outreach, as well as many others.

Given the large amount of federal money being made available, as well as the city’s planned programming to date, one must consider how the city will measure success for the spending of these federal dollars. How does success for these federally-funded programs compare to other city spending? What mechanisms of accountability are available to ensure that ARPA dollars are spent effectively and equitably? 

Federal Standards for Performance Reporting

The ARPA law and its implementing rules require cities with populations of more than 250,000 to provide performance and program reporting with the goal of increasing accountability and effectiveness. These rules establish performance measurement requirements that governments across the country must include in their Recovery Plan performance reports. These reports are updated regularly. 

The recovery plans are supposed to provide information about what projects are selected and how governments plan to ensure program outcomes are achieved in an effective, efficient, and equitable manner. While the federal government is requiring these plans to include, at a minimum, specific performance indicators for the planned spending, the cities are also expected to come up with their own performance measures. 

Detroit’s two recovery plans appear to prioritize using evidence-based research to drive project programming. The city’s most recent recovery report provides project overviews and planned performance outcomes that include near-term and long-term goals which are backed by national benchmarks, research examples, and quasi-experimental studies.

The city’s efforts to define, measure, and report performance outcomes for each of its ARPA funded projects allows residents and city leaders to measure the success of spending and provides a mechanism for accountability.

Detroit’s Recovery Plans

The City of Detroit released its first recovery plan in August 2021, but that report was slim on specific spending details largely because much of the legwork needed to identify, assess, and prioritize its planned spending had not yet occured. As a result, the plan documented the breakdown of planned spending by broad purpose but contained little in the way of project-specific schedules, performance outcomes, metrics, or reporting. 

The city published its second recovery plan report in June 2022. It is much more detailed, identifying 43 approved projects. Each project is guided by the city’s ARPA programmatic “north star” which emphasizes the need to build up vibrant and safe neighborhoods, providing equitable and inclusionary access to economic mobility and social prosperity. For each project identified in the plan, the city provides an overview, planned performance outcomes, evidence/metrics, schedule, and current status.  

The city’s definition of “success” is anchored by their programmatic “north star” which serves as a general goal for the city’s ARPA spending, providing a benchmark for how to measure success. 

Understanding Detroit’s Methodology for Performance Outcomes

With over 80 percent of Detroit’s ARPA dollars already programmed and designated for specific projects, it’s important to understand how Detroit plans to measure and track performance outcomes. 

The city uses an evidence-based approach to design the features of each ARPA-funded project creating specific actions or items (outputs) that contribute to what the city wants to achieve (outcomes) with each project. Outcome-based performance plans are developed for each project. These evidence-based approaches are researched and disseminated through white papers. 

Project outcomes demonstrate the difference made by the outputs. Achieving these outcomes provides the city with a means to evaluate programmatic success based on near-term and long-term goals that are outlined. 

During the planning process of appropriating ARPA money, city leaders identified many problems that impact residents and the city as a whole. Much of this was done during the community engagement process in 2021. ARPA dollars provide a means of addressing many of these problems. The treatment to these issues is anchored by specific goals that allow the city to know whether or not spending was successful. 

In the process of evaluating the success of the city’s ARPA spending, observers should assess whether the city has achieved its near-term and long-term project goals. However, some ARPA funded programs are not outlined in the recovery plan report with the same level of programmatic detail such as the Right to Counsel program. 

In these instances, it makes it hard to measure the success of that program and assess whether city spending was adequate. If ARPA dollars are being spent to fund a Right to Counsel program a measure of success for such spending should be focused on the achievement of a defined goal for that program (e.g., renters were not unjustly put out of their rental space). 

The Right to Counsel program meant to provide free lawyers for low-income Detroiters facing eviction has recently been delayed, and while federal one-time spending was used to fund this program the future of it is uncertain. 

Sustainability in Spending ARPA Dollars

While the city has done its due diligence to ensure the legality and purpose behind project spending are adequate and compliant to federal standards, there are still questions related to the sustainability of some projects that may require long-term spending. Examples include the Right to Counsel and the Property Tax Over Assessments program for legacy Detroiters. The latter is designed to support residents who allege that they were overtaxed in the years after the Great Recession. 

For programs like these, it is equally as important to establish program outcomes with near-term and long-term goals to provide a means to measure the success of such programs. These programs should be evaluated and judged on their long-term sustainability. Sustainability is one component of success that is important to consider as the city works to spend ARPA dollars in the coming years.

Programs that would require long-term spending such as those referenced above should employ the same strategy the city has implemented in its recovery plans establishing benchmarks and goals that provide a measure of success to justify continued funding for these programs. 

Sustainability must be considered when using one-time resources for programs that are intended to span many years. A measure of success for such programs must consider their long-term viability and the ability for the city’s revenue baseline to fund such programs after federal one-time dollars are spent. 

Approaches to Measuring Success of ARPA Spending

Measuring the success of the city’s ARPA spending is an important mechanism of accountability. Detroit’s recovery plans detail specific visions, outputs, and intended outcomes for federal money programmed. Other cities are attempting to address this issue of success by employing similar strategies.

Syracuse is approaching project spending by defining the project’s purpose and justification, identifying milestones, laying out expected outputs and outcomes, identifying opportunities to target underserved populations, and identifying data sources that can be used to track progress. 

Adopting a mechanism for measuring success could present an opportunity for a city-wide approach to project management and data tracking strategies – centralizing evaluation practices and performance measures. Syracuse has a centralized group with oversight over the various ARPA projects with the goal of establishing an organization-wide standard for all departments across the city. Detroit should consider adopting such an approach to set a standard that would promote better organizational efficiency and allow for better cooperation between departments as the city utilizes its one-time dollars.

In Seattle, staff is working closely with city departments to define and measure success. They have prioritized doing this on the front end, before programs launch to make sure that departments are clear from the start about what outcomes they’re trying to achieve.  

The success of ARPA spending could be measured in many ways. Detroit should focus on spending ARPA dollars in ways that it ensures funding is adequate to achieve programmatic success, avoid funding programs that may require a permanent funding source, and prioritize projects that will be impactful long-term. Detroit has done a good job of specifically outlining goals, benchmarks, and metrics to ensure careful spending of its one-time dollars. 

In addition, Detroit can use peer cities to further improve its methodology for spending. Cities like Seattle and Syracuse could serve as examples and provide a blueprint for evaluation of how the city government could integrate performance measurement in a more systematic way.