City Must Decide How To Spend $405 Million

The $1.9 trillion American Rescue Plan Act, the latest federal COVID-19 stimulus bill, will provide at least $405 million to the City of Milwaukee. City officials hail it as a great opportunity — and great challenge.

The city is receiving $687 per capita, the 12th highest total out of the 100 largest cities, based on a formula that assigns funding based on poverty, housing crowding and relative population growth.

Mayor Tom Barrett appeared before a Common Council committee on March 17th pledging to cooperate on a spending plan.

“This is the without a doubt, from a fiscal standpoint, the most extraordinary event that has occurred,” said Barrett of his decades of public service. “This is a tremendous amount of money.”

While noting he would engage with the community on a spending plan, Barrett said he would like to see the funds go towards housing, eviction prevention, lead abatement, early education, workforce and small business development, the Century City strategic action plan projects, broadband, critical infrastructure, pandemic recovery and resilience and expanding the streetcar system. Department heads are being asked for specific projects.

His administration doubled down on the engagement pledge in an April 8th appearance before the Finance & Personnel Committee.

“We do want to stress that it is important to us that there is public engagement,” said budget director Dennis Yaccarino.

But some council members are skeptical. “We asked what working together meant and didn’t get a clear answer,” said Alderman Jose G. Perez. He said the administration has met in small groups with council members, but has not engaged in a larger community discussion.

“There has to be a greater level of engagement, both for us as council members and the public,” said Alderwoman Milele A. Coggs.

Department of Administration director Sharon Robinson said her department is preparing a request for proposals to hire a consultant to conduct a community engagement process that could last up to six months. The Office of Equity and Inclusion, led by Nikki Purvis, will analyze the feedback through an equity lens.

“What benefits us about the American Rescue Plan Act is we can be much more thorough,” said Yaccarino. The city would have four years to spend the money and would not receive it all at once. “One thing we need to be careful about is not just spending the money. Some of it needs to be invested for future prosperity.”

The process is shaping up to be much different than what happened with the original COVID-19 stimulus bill, the CARES Act.

The administration effectively had full control of where the $105 million the city received went, with an expectation that it all needed to be spent by the end of 2020 (later extended). Much of it went to fund the Milwaukee Health Department‘s effort to fight the virus, while other funding was used for rent assistance, small business support and other initiatives.

A council resolution unanimously approved Tuesday morning requests a full report be produced within 30 days on where the money went and what remains.

A separate resolution unanimously adopted Tuesday requests the city’s IT department to create a dashboard so the public can see where the new funds are going. Coggs acknowledged that efforts at the state level and other entities haven’t been user friendly. Chief information officer David Henke said his group was reviewing what other entities have done.

“I think they should do a beta test using alderman,” said Ald. Michael Murphy to laughter from Henke. “That’s a very low common denominator.”

Another resolution, sponsored by nine of the 15 members, is being held by the council pending further review. It would establish a five-step process to expend the funds: community survey, development of specific and measurable goals, presentation of a proposed budget by the administration, community feedback on the budget and hearings before the council’s finance committee.

But before the city can start that process it needs to know how much money it has and how it may be spent. The first tranche of funds is expected to arrive in the next month, alongside final guidelines on what it can be spent on.

Yaccarino said the first thing the city needs to spend the money on, before any community engagement process, is “fixing the books” from 2020. He anticipates that could cost up to $40 million. The funds are expected to be able to be used to replace lost revenue, but not to lower taxes.

The city also needs to understand what other entities, like state government, are likely to do with their money, and if the proposed federal infrastructure bill will provide more funding. The latter is not expected to be taken up until July.

“I don’t want us tripping over each other spending money in a way that isn’t fruitful,” said Barrett in March. Milwaukee County will receive approximately $183 million. The state will receive several billion dollars.

But Coggs wants to see the community engaged from the start. “I do not want to see us arguing over crumbs at the table,” she said.

Other council members are pushing for different strategies.

“I am just frustrated by the same old, same old,” said Perez, calling the administration’s engagement process reactionary. Robinson said that wasn’t the case, saying things were in the preliminary stages.

Ald. Nik Kovac suggested that instead of hiring a consultant to conduct community engagement, Robinson’s department should hire more staff for the Office of Equity and Inclusion to analyze the impact of the funds. He said the city had the expertise to conduct a robust engagement process. “The thing we’re doing that is new is this data analysis of equity,” he said. “I don’t know that bringing in an outside firm should be step one.”

Ald. JoCasta Zamarripa called for both in-person and virtual hearings. She said the response to the virtual 2021 budget hearings was strong, but effectively shut out some of her constituents who don’t have the necessary technology or skills to participate virtually.

“It’s a once-in-a-lifetime chance to make an investment in our city,” said council president Cavalier Johnson.

Now everyone just needs to agree on how to invest it.