City looking to fill in gaps after spending or encumbering all ARPA funds

The city has spent or encumbered a total of $188.5 million that it received from the federal government through the American Rescue Plan Act. According to a memo to the mayor and City Council, the city met the Dec. 31, 2024, deadline to spend or encumber the money, which must be spent by Dec. 31, 2026.

Sarah Torchin, adviser to Chief Financial Officer Ed Van Eenoo, wrote the memo, which outlines how money has been spent or encumbered in five major areas: homelessness, health, the creative sector, economic development and resilience.

A detailed breakdown of expenditures by department shows that ARPA spending on homelessness has been much greater than any of the other areas, with $77 million spent and an additional $20.3 million encumbered. Even though this was the largest expenditure, there are several projects that were started that would require additional funding if they were to continue. By far the largest of these is the Marshalling Yard emergency shelter facility, which will need $8 million to continue. In addition, Financial Services staff says the city needs an estimated $3 million to continue funding for the Northbridge and Southbridge shelter housing program and another $2 million for contracts with local organizations that work as street outreach teams.

The Homeless Services Office is also looking for $2 million to support capacity building for emergency community-based shelters.

Austin Public Health recently reported problems the department is facing due to the sudden loss of federal grant money not related to ARPA.

Health department officials reported spending $32.6 million and encumbering $6.2 million in public health programs with ARPA funds. Health officials will be asking Council to continue public health, education and awareness campaigns at a cost of $300,000, as well as continuing an expanded nurse postpartum program at a cost of $800,000. The two programs include 11 positions.

The Economic Development Department would need $1 million from the city budget in order to continue career training for the Austin Civilian Conservation Corps. EDD will also be looking for $200,000 to continue support for a pilot community-owned food store and $100,000 for workforce child care support.

The federal Treasury Department has “issued a notice outlining its plans to conduct compliance checks regarding the obligation of State and Local Fiscal Recovery Funds (SLFRF) from ARPA,” Torchin says. She notes that the federal agency “plans to recapture unobligated SLFRF funds and to follow debt collection policies and procedures, including penalties and interest, for recipients that do not return unobligated SLFRF funds.”

Representatives of the city’s Financial Services Office are expected to present a five-year financial forecast at today’s Council work session.

The Austin Monitor’s work is made possible by donations from the community. Though our reporting covers donors from time to time, we are careful to keep business and editorial efforts separate while maintaining transparency. A complete list of donors is available here, and our code of ethics is explained here.