Orion Kim, Contributing Photographer

The Board of Alders Finance Committee began work on a plan Monday evening to allocate for spending all funds remaining from the American Rescue Plan Act. 

Monday’s agenda proposed new Memorandums of Understanding – known as MOUs – to help various city departments meet the Dec. 31, 2026, deadline to spend funds allocated by the American Rescue Plan Act, a U.S. federal law providing economic relief to large cities following the COVID-19 pandemic. In 2021, New Haven received $115 million dollars in ARPA funds, including 90 million in direct allocation.  

According to Ward 27 Alder Richard Furlow, the matter at hand is urgent. Furlow said that all MOUs that have any financial impact must go before the board of alders, so last night’s process was necessary in order to let individual departments begin to spend the money.

On March 29, 2024, the U.S. Treasury clarified that recipients may use MOUs between departments and agencies before the federal obligation deadline. Prior to Dec. 31, 2024, every department has to make a commitment to spending their allocated funds.

“If we want to make any changes, it has to be this year,” Furlow said at Monday’s meeting.

Presenting in front of the committee were Ron Gizzy, Allison Herrington and Shannon McCue with the Office of Management, Policy and Grants.  

The same office submitted MOUs for the Board of Alder’s approval, which was passed down to the Finance Committee for review. According to McCue, MOUs were created in collaboration with Tetra Tech consulting and the city’s ARPA-designated attorney to ensure compliance with Treasury regulations.

Herrington worked extensively with various departments to ensure that the MOUs had the correct amount of funds and that each department had enough time to spend them. 

After the preliminary deadline, departments will have until Dec. 31, 2026, to disburse the money, with a three-month close-out cushion period before all remaining money must be returned to the federal government. 

Funds can be reallocated to other existing projects in the same department until the second deadline. However, Gizzy stated during the meeting that funds cannot be distributed across departments after the obligation deadline. 

Following the meeting, the committee closed the Aldermanic Chambers to the public so that they could discuss the matters presented to them. The committee then voted to give a favorable recommendation to the entire board, according to Chair of the Committee Adam Marchand.  

“There’s not a whole lot more for us to do at the moment besides to discuss it with the rest of our colleagues on the board and to have a vote in about three weeks time,” Marchand said. 

The proposal will be read in front of the Board of Alders next Monday, and two weeks later, it will be read for a second time and voted on. 

Marchand and his colleagues were glad that the federal government had allowed the city to use MOUs to allocate all its funds by the end of the calendar year. 

“We don’t want to miss a deadline and have to return those unexpended funds to the government. This [meeting] was a good next step right now to make sure that we stay on track, but we’re going to need to hear back from the administration in the weeks and months ahead to ensure that the projects are all progressing,” Marchand said. 

The next Finance Committee meeting will take place on Oct. 14.