Introducing the Transforming Cities Lab: How three local governments are making federal funds work for the long-term

When Cleveland Mayor Justin Bibb took office in January, it had been 16 years since the city’s mayorship turned over. The leadership change comes at an auspicious time. Along with taking a fresh look at city priorities, Mayor Bibb and his team have an opportunity to take bold steps with the federal funds flowing to the city—approximately $512 million from the American Rescue Plan Act (ARP) alone.   

For cities like Cleveland that are emerging from decades of decline with newfound civic momentum, these unprecedented funds have potential for transformative impact. But at the recent inaugural meeting of the Transforming Cities Lab—a peer learning project between Brookings Metro and leaders from Cleveland, Detroit, and Saint Paul and Ramsey County, Minn.—the conclusion was that strategic use of these funds will require new ways of doing business in local government.  

Local leaders must navigate several challenges to be proactive and innovative in their use of ARP funds. First, deploying funds in strategic and transformative ways is not inherently baked into how our systems operate. Our political and civic processes and bureaucracies are unaccustomed to thinking big or acting collaboratively to make investments that address equity challenges. Second, and related, the magnitude of the problems these dollars are designed to address are multijurisdictional in nature—but our governments are not incentivized or structured to act cross-jurisdictionally. Third, this one-time infusion of funding is time-limited, making sustainability difficult. And finally, starved of adequate funding for years and contending with a shrinking pie at a time of expanding needs, many local communities find it hard to overcome the “culture of scarcity” that can put neighborhoods, projects, and priorities in competition with each other.  

New strategies involve hard choices about how to spend precious funding. Inevitably, then, it is not surprising that residents express skepticism toward leaders who want to funnel investments into big ideas. For example, Detroit Mayor Mike Duggan wants to fight intergenerational poverty with the new funds. But such public pronouncements induce questions: What does this kind of transformative change mean? Who does it benefit? How can it be made real and meaningful for those who are suffering now?  

Warehouse District, Cleveland, Ohio 

Motivated by these concerns, the Transforming Cities Lab launched in March to model how to build civic capacity for maximizing use of federal funds and spurring sustainable investment in inclusive and equitable growth. The Lab is structured as an initiative to promote experimentation, piloting of new ideas and practices, and lessons learned through a series of meetings and educational sessions.  

Stronger civic capacity means developing and strengthening organizations that can support and sustain communities beyond the current surge of funding; work across sectors; collaborate on shared investments; and be accountable in the process. Enhanced civic capacity is a critical path toward building difficult consensus around more strategic and game-changing investments. 

Spurring systems change aimed at long-term, equitable growth 

Leading up to and at the Transforming Cities Lab launch meeting, local leaders expressed challenges about how to: 

1. Shift the local spending paradigm to balance addressing long-term systemic equity with pressing problems. Local governments expressed strong interest in tackling fewer issues more strategically. In most places, this tension requires a shift in the local spending paradigm to prioritize long-term, systemic issues such as inadequate affordable housing supplies, broken workforce training ecosystems, or large-scale neighborhood disinvestment. For instance, “transformative placemaking”—concentrating large investments in targeted neighborhoods and commercial corridors—takes tremendous resources, political will, planning, and community buy-in. These targeted investments are designed to reap long-term returns, particularly in areas with deep histories of disinvestment, such as Cleveland’s Southeast side. Yet many residents rightly see immediate, acute needs and look to cities and counties to meet basic resident demands—whether it’s garbage removal or shelter—in deploying the new funds. Local leaders feel pressed to make quick spending decisions, either for fear of being penalized by funds being clawed back or local pressure to conduct business as usual. 
2. Forge coalitions for the greater good and navigate requests from issue-focused stakeholders. Not surprisingly, special issue funding requests are flooding city and county governments. However, establishing and sticking to funding fewer (and more strategic) priorities requires strong communication, outreach, and coalition-building. Jurisdictions are also interested in collaboratively exploring ways to leverage other nonprofit or philanthropic pots of money to generate evergreen types of funds that transcend the time and regulatory constraints of federal dollars. Finally, coalition-building is pivotal in achieving the paradigm shift referenced above. A stakeholder engagement process at the Lab’s center involves forging collaboration among public agencies and the nonprofit sector and building “tables” across issue areas to inform and establish broad-based solutions.  
3. Invest in smaller “upstream” organizations that can have equitable downstream impact. It is easy for public entities to fall back on the usual larger nonprofits as partners. But in this funding moment, localities can bolster organizations that are positioned closer to community needs, but which often lack sufficient capacity to execute for sustained impact. New funds funneled responsibly and transparently to these organizations build out their capabilities, so they can forge new relationships, and think and invest downstream for longer-term impact—which enhances broader civic capacity muscle. For instance, Ramsey County focused on supporting smaller organizations with federal CARES Act dollars, and aims to do more to enhance organizations focused on disconnected youth, with the intention of reducing juvenile delinquency downstream.  
4. Work across jurisdictions and leverage other funding streams. In almost every region in the country, both cities and their counties are ARP fund recipients. However, jurisdictions rarely coordinate upfront to avoid duplication and reduce back-end costs, collaborate to solve high-need problems, or build complementary funding strategies. Saint Paul and Ramsey County exemplify a cross-jurisdictional approach, already partnering on workforce training needs through the combined Workforce Innovation Board. The Transforming Cities Lab creates a similar opportunity for cross-jurisdictional problem-solving between Cuyahoga County and the city of Cleveland and between Wayne County and the city of Detroit—not to mention the potential to work across multiple boundaries in each metro area and magnify cross-jurisdictional impacts. 

Right Track Plus Career Internship Program Kick-off Event, Saint Paul and Ramsey County

Outcomes of the Transforming Cities Lab 

The three communities experience the Transforming Cities Lab in different ways. Detroit is focused on figuring out the role of local philanthropy and other nonprofit and public funding sources to sustainably support community needs more holistically. Saint Paul and Ramsey County are interested in innovatively maximizing dollars around workforce policy. And Cleveland is creating a new virtual center to convene stakeholders and amplify the impact of funds for years to come, with the aspiration of leveraging this moment to change the city’s narrative.  

Nevertheless, all three places will emerge from the Lab with two concrete outcomes. First, they will build a local Coordination Hub, where diverse stakeholders come together to provide decisionmaking input and act as long-term civic engagement vehicles that align diverse stakeholders across the nonprofit, public, and private sectors; enable ongoing dialogue; ensure transparency and accountability in fund deployment; and facilitate coalition- and trust-building.  

Second, Brookings Metro, in conjunction with Lab participants, is constructing a Federal Funding GPS tool. By identifying funding sources and matching them with local needs and uses, the GPS enables communities to map strategic priorities to current and potential federal funding flows. Understandably, the range of existing and new federal funds is overwhelming to even the most seasoned federal policy wonks. This new tool allows public entities to braid multiple federal funding streams and coordinate investments into key local priorities, thus avoiding redundancy and waste. Lab participants and local leaders are testing and shaping the Federal Funding GPS, which will ultimately be available to any jurisdiction to use in navigating funding allocation decisions. 

Stay tuned for future lessons and outcomes over the course of the Lab. We will disseminate takeaways about new practices, creative problem-solving, and challenging barriers, so places can seize this moment and convert “business as usual” into transformative action.  

Saint Paul, Minnesota