Denver faces $250M funding cliff without ARPA funds
(Colorado Newsline) Denver metro governments are facing an estimated $250 million funding cliff for programs launched with federal funds from the American Rescue Plan Act, and some leaders worry important initiatives will end once the dollars are gone.
Over the last two years, Denver metro governments received a little over $1 billion from the federal American Rescue Plan Act to launch a bevy of new programs ranging from efforts to reduce food insecurity for seniors to building more affordable housing and shelter space for people experiencing homelessness. All ARPA dollars are required to be earmarked to be spent by the end of 2024, although funds don’t have to be distributed until 2026. Any funds that are not earmarked must be returned to the federal government.
While most metro area governments have already allocated their entire ARPA stash, some are concerned that their new initiatives won’t outlast the federal dollars. In a year, those governments will have $250 million less to spend on ARPA-funded programs than they do today.
“This was an opportunity for us to make transformational change,” Boulder County Commissioner Marta Loachamin told Newsline.
Denver metro governments started receiving ARPA funds in March 2021, and funds were received in two disbursements. The first tranche was essentially designed to help local governments respond to the immediate problems created by the coronavirus pandemic, such as job loss, food insecurity, and housing instability, Loachamin said. The second tranche was designed to help local governments create a long-term runway for the programs they launched during the first disbursement, she added.
Boulder County split its more than $63 million of ARPA funds nearly equally between government operations, affordable housing construction, community aid and public health, according to data from the National League of Cities. Boulder was second only to Adams County in spending the highest total of ARPA funds on community aid projects in the metro area, the data shows.
The county is using some of these funds to launch a community aid initiative in 2024 called Thrive and Survive, which aims to connect families with children to affordable child care, Loachamin said. But she is concerned about the long-term viability of the effort, even if it is successful, because of the funding challenges posed by ARPA ending at the end of the year.
Loachamin added that many local leaders have similar concerns about their ability to keep pandemic-era support programs alive once the ARPA train stops. Loachamin said county commissioners who serve on the statewide Colorado Workforce Development Council with her have been raising concerns since at least October about programs that will be lost. However, local solutions have not yet materialized.
“This is going to be an ongoing conversation with people in the statehouse, because it takes a lot of time to get these programs set up and make sure they’re reaching the right people, but there isn’t a funding source to keep them going once ARPA ends,” Loachamin said.
Food support for seniors
Alisha Reis, deputy county manager for Adams County, told Newsline that her county is expecting to finish paying grants funded with the first tranche of ARPA dollars in 2024. Some of those grants have gone toward supporting a new land banking initiative and an affordable housing development for domestic abuse victims, she said.
But the county’s ARPA funding cliff could threaten other efforts concerning food insecurity for senior citizens in Adams County, Reis said. For example, Adams County nonprofit Senior Hub is looking for new funding to continue its Meals on Wheels program after ARPA funding ends. Reis said the county has about $400,000 to support the program for the rest of the year, but there isn’t any money available beyond that.
“We know a lot of our nonprofits are facing a steep funding cliff, and our goal is to change that cliff into a steep decline,” Adams County Commissioner Steve O’Dorisio told Newsline.