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Urbana staff report most ARPA projects complete; about $160,000 flagged for short-term reallocation
Summary
City staff told the committee that Urbana received $12.97 million in ARPA funds, has spent or credibly allocated roughly 98% of the competitive $10.59M pool, and will propose short-term reallocations to spend an estimated $160,000 before the federal December 2026 deadline.
Urbana officials on Thursday told the City Council Committee of the Whole that the city has largely spent its American Rescue Plan Act (ARPA) allocations but must reallocate a small remainder to meet federal deadlines.
JD Mlanahan, planner with the Champagne County Regional Planning Commission, said Urbana received $12.97 million in state and local fiscal recovery funds and initially set aside roughly $10.59 million for an open application process that yielded 25 awards in early 2023. "More than $8.8 million have already been spent, representing about 88% of those total funds," Mlanahan said, adding that when staff count funds that have not yet been spent but are credibly allocated, that figure rises to about 98%.
Why it matters: federal rules require ARPA funds to be obligated to projects by Dec. 31, 2024 and spent by Dec. 31, 2026. If local recipients cannot spend their allocations as planned, the city must reassign those dollars to approved projects that can use them before the federal deadline.
City staff told the committee roughly $160,000 remains that staff either expect will need reallocation or that may require shifting between approved projects. Tara Kazim, the city's management analyst, said some of the reallocation options would be brought to council that night: "There is that buffer of funds that we either know or suspect might need to be shifted around before the end of the year," she said.
Council members pressed staff on which projects were at risk and how reallocations would preserve the council's original priorities. Staff said reallocation is limited to projects that were approved and obligated by Dec. 31, 2024; when reallocating, they will generally seek to move funds to projects addressing the same community needs (for example, a homeless-services allocation replaced by another homeless-services project).
Next steps: staff said they will continue quarterly monitoring and, if necessary, propose reallocations in the first half of the summer to ensure the city does not return federal funds. The committee voted to forward an ARPA reallocation resolution to the full council as a consent item; staff said the plan would reallocate small amounts among existing projects so all the city's ARPA dollars are exhausted by the federal deadline.
The committee did not vote on any new projects; staff emphasized the treasury rules prohibit creating new ARPA projects after the December 2024 cutoff and that reallocations must remain inside the previously approved project portfolio.
What to watch: the reallocation resolution (moved by Council member Trice and seconded by Council member Verdell in committee) was forwarded to council for approval; staff will return with amended subrecipient agreements and monitoring materials if council approves.
