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What’s the plan for American Rescue Plan money?

Wednesday, May 19, 2021 by Jo Clifton

After seeing a rough outline of how city staffers plan to spend $143.6 million in American Rescue Plan Act funds to house the homeless, address food insecurity, and provide affordable child care and job training, City Council still had a lot of questions about specifics at Tuesday’s work session.

Council members Alison Alter and Kathie Tovo, in particular, indicated they might not be ready to vote to move forward with approving spending at Council’s June 3 meeting. Council Member Leslie Pool said she wanted to look at how the spending would fit in with the upcoming budget discussions.

Council Member Ann Kitchen pushed back on the idea of putting off a decision, suggesting that a special called meeting might be necessary. After several hours of discussion, Mayor Steve Adler said he would try to schedule a special meeting on the spending for next week.

So far, Austin has spent $44.3 million in ARPA funds on its Covid-19 response and $500,000 on the navigator program, which helps local businesses apply for federal assistance. The city still has $49.4 million for the current fiscal year and will receive an additional $94.2 million from the program next May, according to Chief Economic Recovery Officer Veronica Briseño.

Staffers identified possible investments for priority areas at $732.8 million, which included $515 million to address homelessness, far outstripping funding. However, Briseño said staffers were recommending spending $84 million on homelessness, $6.9 million on early childhood care, $8 million on jobs and workforce development, $3 million on food insecurity, and $22.9 million on immediate relief needs.

Chief Financial Officer Ed Van Eenoo recommended keeping 10 percent of the federal funds for contingency needs. When questioned about the necessity of such a contingency, Van Eenoo said the city might need that money for health services if we were to experience a reemergence of the Covid virus.

Although Briseño did not offer a lot of details, she made a point of saying the city should allocate $1.5 million right away to build a community health center at Colony Park, which has no nearby health facilities. She said the site is shovel-ready and the city had previously promised to build it.

Briseño also said staffers recommend putting $10 million into a fund that would replace Hotel Occupancy Tax money for cultural arts, live music and historic preservation. The city would also invest another $10 million next year in those three areas, she said. Finally, she recommended $1.4 million in rent relief for individuals and households.

Council Member Greg Casar praised the work done by staff, but said he was concerned that there would not be enough money to help people facing evictions, which could increase significantly in June. He said the city might need $15 million a month for rental assistance through the fall. Austin and Minneapolis currently have the lowest level of evictions, Casar said, but that could change. Travis County received more ARPA funding than Austin and the city needs to find out what county commissioners intend to do to address various issues, he said.

Alter and Tovo both indicated that they were not satisfied with the amount of detail they had been given. The two Council members, along with Pool, asked whether staffers intended to invest any of the federal funds into the city’s Civilian Conservation Corps. Alter, who sponsored creation of the program, said she would not support staff’s plan for ARPA if the Conservation Corps were not included. She said the CCC is working on projects all over the city, including one in the Onion Creek area, and that Travis County is in the process of creating a similar program. Although the original proposal from staff included $5 million for the Conservation Corps, Alter said she could not see it in the current proposal. Briseño indicated that staffers could put the funding back into the proposal.

Mayor Steve Adler and several Council members expressed optimism back in March that the ARPA money could be used for what they called “transformational” change, particularly in addressing homelessness. But Adler, in particular, wants to make sure that the city is not going it alone.

Casar said, “I do think it would be so transformational if we do our part on homelessness, in that $80 (million to) $100 million range – in a call to everybody else to do their part – housing thousands more people in such a short period of time could not only be transformational here but it would be a real model across the country for how to tackle a crisis that has gone without sufficient resources for generations.” He urged his colleagues to approve ARPA spending plans in June; then Travis County can step in and do its part.

“As Council Member Kitchen said, what I do want to avoid is us taking too long to put forward our part and that leaves other folks in the dark about whether we’re going to do our part or not, so I feel comfortable vetting this thoroughly, working through the issues … I think passing something in June makes sense so that we commit to our piece and then other governmental partners and private philanthropy then would need to do theirs,” Casar said.

Adler urged City Manager Spencer Cronk to provide the details about the program, not just for Council but for other potential funders. That’s because, he stressed, the city cannot do it alone: In order to have a truly transformative program, all the different entities will have to work together.

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