South Bend Council approves the use of the organization’s COVID-19 funds

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BLM-SB said they wanted the council to delay voting on the bill until they vote next month on next year’s budget. Mueller has said he would only ask the council to appropriate the ARP money over the next two years at annual budget time.

“We didn’t think this would be controversial,” Mueller told council members. “It’s more of a strange accounting thing with the ARP dollars but we’ve taken it out because we thought it was a needless distraction and we still have time.”

Parker said the administration still will ask the council to approve the revenue replacement transfer sometime soon, but wanted to give them and the public more time to understand the bill. The amended version also removed two spending items the administration deemed were not “time-sensitive” – a $2 million “placeholder” in case any new spending requests emerged from council members or the public between the time the bill was publicly advertised and Monday night’s vote; and $625,000 for solar energy and electric vehicle charging station initiatives.

City Controller Dan Parker said the city has no real way of knowing how much tax revenue it lost because of the pandemic, but the $23.7 million revenue replacement comes from a U.S. Department of Treasury formula that adds 4.1% to a city’s 2019 revenue.

Story Highlights

  • Council President Karen White said council members Monday received many questions and complaints from residents about the administration’s bill, which had included shifting $23.7 million of its $59 million in federal American Rescue Plan money from the city’s ARP Fund to the General Fund. Black Lives Matter – South Bend had a press conference Monday morning urging people to tell council members they oppose the bill because the city’s 2022 budget doesn’t focus enough spending on racial equity initiatives.

  • By the council’s afternoon committee meetings Monday, Mueller had filed a new bill that no longer shifted the $23.7 million. The administration’s bill initially proposed shifting the money to its general fund to give it more “flexibility” in how it can be spent. Rules in the federal act allow replacing revenue lost from the pandemic, but place restrictions on how the ARP money can be spent, Mueller said.

The $9.8 million in new ARP spending, things Mueller said he felt needed action now, included:

$2.5 million to pay for pre-Kindergarten centers that the United Way of St. Joseph County will build and operate. The nonprofit was scheduled to break ground Tuesday morning on a center on the city’s southeast side, and at Monday’s meeting, United Way CEO Laura Jensen announced plans to build a second center on the city’s northwest side, near LaSalle Intermediate Center.$1.7 million to upgrade ventilation systems at the Century Center and Morris Center for the Performing Arts so that they’re more “robust” to better prevent COVID-19 transmission.$500,000 to demolish vacant and abandoned commercial buildings, such as the former Wilson Shirt Factory building on Sample Street, where bricks crumbling since a 2019 fire have forced closure of a driving lane.

During a committee meeting earlier Monday, BLM-SB co-founder Jorden Giger asked Parker why the administration can’t replace any tax revenue lost because of the pandemic with the city’s $120 million cash reserve. Parker responded by saying that’s effectively what the city will be doing when it transfers the $23.7 million from the ARP Fund to the general fund. Mueller noted that the council will have authority over how to spend the ARP money, whether it’s spent from the ARP fund directly or is first transferred to the general fund. 

Still, Council Member Henry Davis Jr. said he and the public remained confused by the bill. He offered a motion to delay a vote for two weeks, but his motion died for lack of a second from another council member. The bill passed on a 6-2 vote, with Council Member Lori Hamann joining Davis in voting against it.