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Fine Tuning City Grants Management

By Rose Gill and Megan Sheekey

Municipal Leaders: This is your moment. Unprecedented levels of funding are now available through the American Rescue Plan Act (ARPA), the Infrastructure Investment and Jobs Acts (IIJA), and other sources in response to the COVID-19 pandemic. Of course, you will need an efficient and powerful engine to drive these resources into communities to create transformative and lasting change. So, have you looked under the hood of your current grants management operations? Are you “driving” a Porsche or a Pinto?

Bloomberg Philanthropies and the U.S. Conference of Mayors recently hosted a workshop on ways local government can effectively identify, distribute, manage, and track the current high levels of funding. The session for over 150 city officials was part of the Federal Assistance e311 program.

Grant experts from Witt O’Brien’s and Hagerty Consulting shared important lessons learned and key insights.

Assess Capacity.

Understanding the capacity and capabilities around grants within your Administration is a vital first step. Review your current staffing, policies, and procedures, and identify gaps that need to be addressed.

“As communities grow, the demand for new infrastructure and services is endless, and securing funding from federal programs is imperative to meet this demand,” said Matt Hanson, Associate Managing Director at Witt O’Brien’s and a former state and city grants manager. “Being grant ready and having that internal capacity will ensure that your organization is positioned to secure and effectively manage these funding opportunities when they become available.”

Hanson also noted, “There often needs to be a culture and climate shift within local government to bring as much focus on grants as other core functions like procurement, it’s time to bring sunlight to grants operations.”

Develop a Strategy.

All grants, whether public or private, should be part of broader goals and strategic planning—to avoid losing focus and chasing the next shiny object. A successful grants plan should be created in coordination with the city’s budget and capital plan, involve government and community stakeholders, and be continually updated to reflect needs and available resources.

“When you pursue grants, what you’re really doing is making policy choices that are going to have outcomes on the ground,” shared Ben Hecker, Managing Associate at Hagerty Consulting and former Deputy Chief of Staff in the Minneapolis Mayor’s Office. “So, you need to understand all of the potential impacts and resource implications that may be triggered by accepting a grant.”

Build Structure and Devote Resources.

While many cities use varied grants management models, the most successful ones have a centralized approach, which can ensure that grant opportunities align with city priorities and resources. This approach provides the structure for uniform policies, compliance procedures, technical assistance, and training. Deploying a streamlined model can also help strengthen communications with project partners and other jurisdictions.

“When I started working with the State of Arizona, we had 50 state agencies involved in grants management that were independently deciding which grants to pursue and how to award them. We often ran into conflicts, with multiple agencies applying against each other. The strength of centralizing grants management is that subject matter owners are driving grants administration in coordination with project leads.”

During its bankruptcy and fiscal crisis, the City of Detroit established an Office of Grants Management in 2014 to work closely with city departments, its Finance Department, and other partners to strategically coordinate and administer grants. Additionally, an Office of Development was launched to help identify resources, secure funding, and strengthen public-private collaboration. A priority dashboard was developed to help catalog city priorities, identify needs and potential sources, and track investment with city departments and community partners.

Right now, ARPA funding under the Coronavirus State and Local Fiscal Recovery Funds (CSLFRF) can be allocated for staffing, technology, and systems — through administrative costs, revenue loss, or the improvement or enhancement to public sector capacity. Moreover, municipalities can build capacity through better planning under IIJA programs. For example, part of the $1.4 billion in competitive grants under Promoting Resilient Operations for Transformative, Efficient, and Cost-saving Transportation (PROTECT) can help municipalities assess vulnerabilities to current and future weather events and natural disasters and changing conditions.

For municipalities moving from decentralized to centralized grants management, it is important to recognize that the process takes time. Establish a transition plan that includes both short and long-term goals and actions.

Ensure Compliance.

Each year, cities lose substantial funding due to an inability to meet grant requirements and/or spend down funds within the grant period. It is essential to invest time and energy into internal controls and compliance considerations, including monitoring and audit functions, before applying for funds, not after.

In 2013, the City of Detroit had about $18 million in questioned costs from grant awards. Following its grant reform efforts, that was down to zero, and the City was better positioned for future funding. “Addressing historical compliance and audit issues, while building the capacity and capability to maintain compliance moving forward, positioned Detroit as a successful grantee to federal, state, and philanthropic grantors,” said John Hageman, Senior Manager at Hagerty Consulting and Former Chief of Staff of Detroit’s Office of the Chief Financial Officer.

Get Support.

“Coming out of this COVID crisis environment really creates an opportunity to do a lot of the work that may not have been possible in the past—right now there are both more resources and a greater desire to think creatively and strategically about grants administration,” added Hageman.

There are strong networks, public resources, and philanthropic partners to help accelerate this work, some of which include:

The increased level of funding opportunities should be a wakeup call for cities to get grant ready; there is no better time than now for local government to invest in effective grants administration.