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Legal debate over ARPA reallocation and auditing risk surfaces as council eyes $14.75M for 2026
Summary
Outside counsel told the City Council that Treasury guidance allows reallocation of ARPA funds obligated by Dec. 31, 2024, if spent by Dec. 31, 2026; community groups warned that repurposing subrecipient ARPA grants risks audit findings and repayment to the US Treasury.
City legal counsel and outside consultants gave the council sharply different views on the risks and mechanics of using American Rescue Plan Act funds in the 2026 budget.
Chris Johnson of Jones Walker told the council that Treasury guidance and the SLFRF rule permit reallocation of ARPA funds that were obligated by Dec. 31, 2024 to other eligible uses — including certain salary or public-safety needs — so long as the substituted use is permissible and funds are spent by Dec. 31, 2026. "If you follow those…
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