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As part of the $150 billion national coronavirus relief fund, the City of San Antonio received $270 million. Until recently, however, the City wasn’t clear on how to spend it.
When these funds were distributed to cities and counties across the U.S. last month, little guidance was included beyond the mandate that the money be used for emergency expenditures incurred during the public health crisis that were not accounted for in current budgets. The expenses must have been between March 1 and Dec. 30.
Additional guidance from the U.S. Department of the Treasury received this week further clarifies what the City can and cannot use the money for, said City Manager Erik Walsh. But it cannot be used to make up for revenue losses, so “cuts in City service are likely to happen.”
Eligible uses include paying public safety and health personnel, purchasing protective equipment (PPE), testing and contract tracing, setting up quarantine and isolation facilities, providing food delivery to vulnerable populations, and recovery and resiliency planning.
The funding – which came through the Coronavirus Aid, Relief, and Economic Security (CARES) Act – can also be used to cover rental assistance, homeless housing, improving access to the internet to facilitate distance learning, supporting small businesses, and workforce development.
Mayor Ron Nirenberg will convene several City Council work sessions starting the week of May 18 to start divvying up the funding. These sessions will look similar to the annual goal-setting sessions Council does to set priorities and find consensus on budget issues, he said.
“We will be able to target these funds in an effective way to make sure we’re getting people back on their feet,” Nirenberg told reporters after Council’s meeting on Thursday. “We’ve confirmed what the major areas of spending will be, we’re now going to have to dig a little deeper in terms of what the programmatic elements of those categories are and the levels of funding.”
There’s still clarification needed on what the money can specifically be used for, he said, but City staff is working on those details and compiling a list of possible expenditures.
COPS/Metro, a community advocacy group, has lobbied City and County leadership to focus a lion’s share of the $270 million towards a modern, coronavirus recovery version of the Servicemen’s Readjustment Act of 1944, commonly known as the G.I. Bill that helped veterans recover after World War II with workforce training, education benefits, and more.
“[That money] should be used as a down payment on a five-year investment plan to train and retrain our workforce for a post-COVID-19 economy,” COPS/Metro leaders Sonia Rodriguez and Consuelo Tovar wrote in a letter to Council on Thursday. They call for free Alamo Community College District tuition for unemployed workers and the creation of a public works program to train workers to narrow the digital divide and rehabilitate aging homes.
“The need is now,” they wrote. “The money is present. The authority is given. San Antonio cannot wait.”
Nirenberg recognized the need for workforce development, but said more work needs to be done to figure out how and where the City can spend the federal money.
“The nature of the economy will change,” Nirenberg said. “There are many training programs and institutions in this city that have been focused on ensuring that we have a workforce that’s capable of getting into the economy. We have some things we’ll be discussing about how we can best utilize those funds to ramp up that capacity.”
The federal dollars won’t solve San Antonio’s problems, said Councilman Manny Pelaez (D8).
“Those funds come with some pretty tight restrictions,” he said, and a city of San Antonio’s size can quickly spend $270 million.
“I hate being a wet blanket here, but we need to be really careful to not set false expectations in the minds of the public or even ourselves and start [writing] checks with our mouths that we might not be able to cash,” Pelaez said.
The joint City and Bexar County working groups that have guided the local governments’ responses to the pandemic will likely sunset at the end of the month by issuing their final reports. Information from those reports will also provide guidance for Council on how to spend the federal dollars, Nirenberg said.
Those groups, comprised of community leaders and elected officials, will be working to solidify what categories of relief should take priority.
The collaborative nature of the working groups – between the city and county entites, nonprofits, and private businesses – won’t sunset with them, Nirenberg said.
Bexar County received $79 million from the coronavirus relief fund and is in constant contact with the City.
“[Bexar County Judge Nelson Wolff] and I talk every day about that and so we’re going to stay aligned,” Nirenberg said.
Councilwomen Adriana Rocha Garcia (D4), Shirley Gonzales (D5), and Ana Sandoval (D7) called for a reestablishment of the dormant Council committees. These 10 committees served as a critical piece of the City’s legislative process but were paused when the reported cases of coronavirus started to increase locally in March. The committees won’t look the same as they did before the pandemic, Nirenberg said.
The mayor imagines an “evolved Council committee process,” he said. “We’re getting back into a more regular workflow. These [health and safety] priorities don’t change, though.”
Meanwhile, the City is expediting its budget process by starting the mid-year adjustment process later this month to prepare for the estimated $200 million shortfalls in the fiscal year 2020’s budget alone.
“We are in unprecedented times,” said Assistant City Manager María Villagómez, and none of the federal relief funds can be used to make up for revenue loss.
The City is still working on determining the ongoing cost of responding to the pandemic and what other service areas could be trimmed, she said.
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So far, the City has spent $16.5 million on personnel and equipment for the emergency response, Villagómez said. That’s not including other state and federal funds that the City has allocated to emergency programs such as Community Block Development Grants.
More federal funding is on the way, Villagómez said, but it’s unclear when, how much, and what the City can use it for.
City Council will review possible budget adjustments on May 28 and vote on revisions on June 4. Council is slated to set goals and priorities for the 2021 budget on June 18 when it will, for the first time in the City’s history, review a trial budget, which will include a financial assumption and options for budget 2021 reductions as the financial picture changes. Typically, budgets aren’t developed this early in the year and don’t come with a list of possible cuts.
“This is early in the budget process because we wanted input from the City Council before we prepare the [draft] budget,” Villagómez said.
As the federal funding picture becomes more clear, the City may have to pivot other spending to fill in gaps or reduce overlap, Walsh said. Each pot of federal money has different deadline requirements and allowable uses.
“It’s kind of like a jigsaw puzzle that we’re going to have to deal with together,” he said.