South Bend Common Council adds $9.8 million to 2021 budget to fund American Rescue Plan projects

Sep 28, 2021

The revised bill adds $9.8 million, primarily from the city's general fund, to the existing 2021 budget to pay for projects and investments under the federal American Rescue Plan.
Credit Captured via Microsoft Teams

The South Bend Common Council passed a bill Monday night that adds about $14.5 million to the city’s existing 2021 budget. The majority of that spending — just under ten million — will pay for projects and investments funded by the American Rescue Plan.

Originally, the bill would have added over $35 million to the city’s 2021 budget. Just under $11 million would have come from the general fund for American Rescue Plan expenses, and $23.7 million would have been transferred from the city’s ARP funds to the general fund.

City Controller Dan Parker called shifting the $23.7 million an “accounting item,” and said it would give the city more flexibility on what they spend the ARP dollars on. But he said the city decided to pull it from the bill because of public confusion over that process.

“It ended up being a distraction from the actual spending that’s in the bill,” Parker said. “So we wanted to remove it at this point until it’s better understood and bring it forward at a future time.” 

Mayor James Mueller said the move would satisfy treasury department requirements on spending the ARP dollars.

“We didn’t think this would be controversial,” Mueller told council members. “We’re not spending any dollars — we’re just changing the classification, and the council still has to approve whatever we spend those dollars on.” 

He said the city removed it so it would not be a “needless distraction” to the other spending requests, but will be bringing it back at a later date.

City Controller Dan Parker's explanation of how the $23.7 million shift would work. He said it would give the city more flexibility on spending the ARP dollars.
Credit Captured via Microsoft Teams

Instead, the substituted bill will send just under $14.5 million to the city’s 2021 budget, with $9.8 million for American Rescue Plan spending. About $8.3 million will come from the city’s general fund, with the remaining $1.5 million coming from the city’s ARP funds.

Parker said it is all focused on essential spending.

“We wanted to make sure that this bill was only the stuff that was time sensitive, that needed to be appropriated in 2021 in order to meet some pressing or immediate demand.”

That includes funding for a new Pre-K center on the far Northwest side, money to start designing the renovated Martin Luther King, Jr. community center and money for utility assistance.

Multiple council members called the substitute bill a “compromise,” and thanked the city for paring it down.

However, council member Henry Davis Jr. disagreed, as did Jorden Giger of Black Lives Matter South Bend. They both pushed for the bill to be delayed for several weeks to allow for more discussion.

“This wasn’t a compromise — you guys received some really rough emails today,” Davis said. “Right here, right now, it still doesn’t have my confidence. Nor does it have my support.”

Several days ago, BLM asked supporters to email the council to lobby for that delay. Giger also said the spending should focus more on racial equality initiatives.

“Based on the presentation, the council can wait until after the 2022 budget is passed to make these appropriations,” Giger said. “These don’t sound like they need to be immediately passed right now or appropriated right now.”

But Mayor Mueller said delaying the bill would have negative consequences.

“We stripped out everything from the original bill that we thought could be delayed,” Mueller said. “There are time sensitive things that we need to get going on — we’re behind on some of these things.”

He cited the new Pre-K center and the renovated MLK community center as projects that can’t be delayed.

“If we even want to break ground next year, we’re already falling behind schedule,” Mueller said, referring to the MLK center. “And every week does matter when you’re talking about these projects.”

The bill passed 6 to 2, with council members Lori Hamann and Henry Davis Jr. voting against it. Council member Eli Wax was absent.

Here’s a breakdown of the ARP spending added to South Bend’s 2021 budget:

$2.5 million for a new Pre-K center run by the United Way on the city’s northwest side. 

Laura Jensen, president and CEO of the United Way of St. Joseph County, said the nonprofit is looking to expand their neighborhood center initiative and will add a minimum of 200 Pre-K slots in the new location in partnership with Head Start.

Jensen said United Way will break ground on their new southeast neighborhood center on Sept. 28, which will bring 112 Pre-K slots to the area when completed.

“We hope that this is just the first of many locations throughout the city’s footprint and throughout St. Joseph County,” Jensen said. “It’s really a holistic approach to supporting children and families in our county.”

$2 million on utility assistance for customers with outstanding bills.

Parker said that the city has not resumed water shutoffs, but about 20 percent of customers are at least 60 days past due and that the $2 million will fill that hole.

Assistance will be given out after other avenues are pursued, such as payment plans, the Emergency Rental Assistance Program and the federal low-income household water assistance program, which starts in November.

“This is not a blanket forgiveness by any means — this is just money we need available,” Parker said. “At some point, we are going to figure out how we deal with the 7,800 residential accounts that have balances, because I don’t think any of us want to just shut off almost 20 percent of our residential accounts.”

$1.5 million to repay the city for COVID-19 expenses, such as sanitizing, masks, gloves and emergency economic support for small businesses and residents.

$1.5 million for the city’s solid waste pickup to fill an operational deficit created by delaying the planned rate increase until 2022.

$1 million to begin architectural design work on the renovated Martin Luther King Jr. community center.

The smaller amounts: 

There’s $500,000 for demolishing vacant and abandoned commercial buildings that Parker said need immediate attention due to safety hazards and $500,000 for financing development of vacant commercial buildings.

There’s also $200,000 to begin design work on COVID-related safety upgrades such as improved ventilation for the Century Center and the Morris Performing Arts Center and $100,000 to help city residents find out about and apply to national, state and local assistance programs.

Council members Henry Davis Jr. and Eli Wax criticized that final appropriation. But city chief innovation officer Denise Linn-Readle said there are a huge number of state, federal and local assistance programs — and many are being underutilized.

“One thing that we want to do as a city is step up as a leader and say ‘we want to streamline things over all these silos,’” Linn-Readle said. “Unless someone really invests in that, I think we’re going to leave a lot of money on the table for our residents.”

The remainder of the $14.5 million added to the city’s 2021 budget includes $3.7 million in capital lease expenses — primarily vehicle purchases such as police cars — $484,544 for a Community Development Block Grant created as part of the March 2020 CARES Act and $520,914 for other needs including money for River Lights construction and repairs to one of the gates that lets water into the East Race.

Contact Jakob at jlazzaro@wvpe.org or follow him on Twitter at @JakobLazzaro.

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