Slow rollout of relief fund roils council

Months after applications closed for nonprofits, most cash not distributed

Baltimore’s rollout of American Rescue Plan funds has put members of City Council on the hot seat with numerous local nonprofit organizations, council members bemoaned Tuesday during a quarterly update on the money.

The application process closed in December for nonprofit organizations seeking a slice of the $641 million Baltimore received from the federal government, but funding has yet to be awarded to most of the nonprofits that applied.

Staff with the Office of Recovery Programs, created to distribute the one-time infusion of cash, first had to confirm each applicant’s eligibility.

Then, new rules for the funding further delayed the vetting, officials explained to City Council in February.

Now, the office is now trying to collect all the supplemental materials needed from the hundreds of applicants before making decisions on awardees, reported Shamiah Kerney, head of the office, to City Council on Tuesday. Kerney said she hopes to make decisions by the end of the fiscal year on June 30.

“We can spend the money fast and do it wrong, or we can take some time and really put some strategy around it,” Kerney said during the meeting of City Council’s Ways and Means

Committee. “If we take a proposal-by-proposal approach, that’s not strategy. We’re just spending.”

The money is controlled by Mayor Brandon Scott’s administration, and council members have repeatedly raised concerns about the fund’s allocation, including a lack of legislative oversight. The board, over the objections of administration officials, passed an ordinance in November calling for more frequent updates on the spending.

Council members also have questioned the way some city agencies, in particular the Mayor’s Office of Neighborhood Safety and Engagement, or MONSE, have delegated funds independently to nonprofits outside the more widely available application process run by the Office of Recovery Programs.

MONSE was awarded $50 million in ARP funds to be dedicated to violence prevention in October, one of the city’s first major allocations. A portion of that money, about $17 million thus far, has been paid out to nonprofits — and one for-profit group — to offer services such a violence interruption.

Councilman Isaac “Yitzy” Schleifer said he understood the need to make methodical decisions on awards to nonprofits. The process of handing out some funds through agencies, however, negates what city officials are trying to do with their methodical decision making, he said.

“We have a second track where there are grants that are going out through the door quickly that are obviously not following the exact same process,” Schleifer said.

Kerney said recipients of funds from agencies like MONSE still must complete an application and a risk assessment similar to other nonprofit applicants. Some agencies have been able to make decisions more quickly than the Office of Recovery Programs, she said, because they are handing out money for more specific purposes.

“I don’t know that I agree there’s a second track, but I do agree it has been faster,” Kerney said.

Schleifer questioned a $750,000 allocation made to Sage Wellness, the only for-profit organization to receive funds from MONSE. Schleifer argued a for-profit business is required to pay taxes and typically pays employees more to compete in a private market, and that amounts to a poorer value for the city.

“There’s money off the top,” he said. MONSE Director Shantay Jackson said Sage Wellness was chosen because the company previously did work for the city on gun violence intervention. City officials noted that rules governing the spending of ARP money cap the amount that can be spent on administrative fees.

“Regardless of who the provider of the service will be, their standards for reporting back how they use funds will not change,” said Chris Shorter, the city’s chief administrative officer. “For our purposes and the purposes of MONSE, the mayor’s charge is clear. They are working that charge in a phenomenal way, and the obligation they and other providers have to report back on the use of the funds is the same.”

Council Vice President Sharon Green Middleton said she has heard repeatedly from nonprofit leaders who are confused about the process. Many applied but were denied without being able to meet with city officials and fully express their plans, she said.

“It’s been up to us to explain things to them when we are somewhat confused on the process as well,” Middleton said.

“We’re being watched for everything we do, but, not just as a representative on council and … the community, we haven’t been a part of this,” she said. “I’m not blaming anyone, but there’s been some communications flaws.”

Kerney said her office is being watched closely too.

“There is a lot of disbelief about our ability to be able to execute this funding, to implement it and to really make a difference,” she said. “I take that challenge on wholeheartedly. That’s why some of the decisions we’re making, they may be slow, but they’re deliberative.”

Councilwoman Odette Ramos asked whether the Office of Recovery Programs is giving guidance to applicants who have been rejected for ARP funding.

“Could there be some specific information that goes out about how they can improve their proposal?” Ramos asked.

Kerney said applicants who have been rejected have the opportunity to ask the office for feedback, however, the office has requested more time to respond to those applicants. Responding to everyone who has been rejected would be difficult, she said.

“Folks are seeing that the MONSE money is getting out, and they’re not seeing this other money getting out,” Ramos said. “I think it’s an issue of how do we communicate that to folks.”

City officials said some additional funding within Baltimore’s $641 million pot has been freed for allocation to both city agencies and area nonprofits. Initially, Baltimore set aside $130 million for budget stabilization, but that figure has since been reduced to $80 million because revenue collection has been stronger than expected, said Mara James, the city’s assistant budget director.

Councilman Eric Costello, chairman of the Ways and Means Committee, questioned whether that extra money would be dedicated to nonprofits or city agencies. The funding will be available to either, Kerney said.

To date, about 80% of Baltimore’s ARP money has been allocated in broad swaths to various city agencies to assist with coronavirus relief, workforce development, improving housing, reducing homelessness and improving recreation and parks, among other projects.