Salem To Reassess American Recovery Plan Act Funding As Deadline Looms

SALEM, MA — Salem officials will look to reassess its American Rescue Plan Act appropriations this summer as the deadline for allocating on projects that can actually use the money before it goes away looms in 18 months.

Nick Downing, the city's manager of capital planning and federal funds, told the Salem City Council Committee of the Whole on Tuesday night that while $31 million of the city's $35 million allotment had been programmed, only about $4.5 has been spent, and that he expects the reassessment process this summer to move some funding out of areas when it cannot or likely will not be needed to projects where it can be spent more immediately.

Cities and towns have until Dec. 31, 2024, to irrevocably program funding for projects that must then spend that funding down by Dec. 31, 2026, or it will be lost.

"We don't want to get caught flat-footed at the end of 2024," Downing said. "The last thing any of us wants to do is leave money on the table. We want to be spending this money on projects that we need here in Salem."

Under the Kim Driscoll Administration through a series of public meetings, the city devised a priority list of the types of projects eligible for funding and estimates for how the $35 million ($27 million for the city, and an additional $8 million dedicated to a county government system that does not exist in Massachusetts) would be divided. Plans were also put in place to reassess those funding priorities in the July of 2023 to ensure that the money could be and would be spent.

For instance, about $10 million was ticketed for housing development programs in the city. But in negotiating those projects the city put in place a June 2024 deadline to determine the state of those projects and ensure the money could be used before it is lost — if a project is delayed beyond 2026, for example — with "clawback" provisions in place to get that money back and reallocated to more design-ready or shovel-ready projects by the Dec. 31, 2024 deadline.

There were other allocations that Downing noted may have been overfunded and could result in more programmable money available.

The city's accessory dwelling unit design and construction incentives, for instance, were allocated $1 million as a housing priority, but Downing said as of this month only about $150,000 of that has been applied for and accepted.

Another line item is $3.5 million in emergency COVID-19 relief the city put aside if there were additional waves of the pandemic — which never materialized and will likely be revisited with the national health emergency being allowed to expire in March.

"I expect that ($4.5 million available funds) number will increase when we do our assessment in the middle of the year," Downing said.

He said the public meetings on ARPA funding were suspended over the winter ahead of the special election for mayor but will now resume with one likely scheduled within the next two months.

One challenge of the ARPA project funding is that it must be fully spent by 2026 and cannot be used on a recurring expense that would then have to be folded into the municipal budget if another funding source is not found.

The expansion of the Salem Skipper municipal ride-sharing program is one example of a program that was allotted funding that will need a renewable source within the next three years if it is to continue.

"It's a great program that folks really enjoy," Downing said. "But it is not inexpensive to run."

That's why it is difficult to use the money on hiring for salaries that would then have to be sustained after the funding expires if the city or town chooses to keep those employees and programs.

Among the capital programs targeted for funding are making the Kernwood boat ramp ADA accessible, repairing the Salem Willows pier, completing phase II of the Palmer Cove Park project and repairing the Witchcraft Heights playground.

Downing said other infrastructure projects — such as water and sewer — could receive funding if it is available later in the process as some of the original targets drop out of feasibility or necessity.

"I am confident that we are going to spend every penny of it," Downing said. "We're not going to get this type of direct support from the federal government, probably, to this level any other time in our lifetimes.

"There are a lot of opportunities that come with that. I am confident we are going to get that money out the door."

(Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.)