Money, Money, Money…
There are a few big financial issues swirling around City government these days.
There are large sums of money available for massive reinvestment and, at the same time, some of the City’s revenue streams are jeopardized, which could have a significant impact on City services. All in all, it seems like a good time to look in on the City’s financial situation and see where we are.
American Rescue Plan Act (ARPA) funds
In February 2021, just weeks after President Joe Biden was inaugurated, Congress passed the American Rescue Plan Act in which they appropriated $1.9 trillion for the purpose of helping America and Americans get back on their feet following the Covid pandemic. The City of St. Louis received $500 million in recovery aid.
The Money Comes With Strings Attached
Federal funds come with requirements. As a result, the City was tasked with the enormous effort of identifying those needs and investments that would aid recovery while also staying within federal guidelines.
It appears the City departments have done good work to properly and appropriately spend a portion of these funds in the community. But there have been hiccups.
The Post-Dispatch is concerned about secrecy and perceived favoritism affecting a recent round of economic development funds and editorialized about their concerns.* We all look forward to the release of additional information about these grants.
*NOTE: Yes, this link has a paywall, and I am sorry. While I don’t like that, I do think it is important that we and keep an eye what our daily paper of record is reporting on this issue, and what it has to say editorially about it as well.
Time is Running Out
An important deadline for spending ARPA funds is also looming. All funds must be appropriated and under contract for spending by December 31, 2024. Any funds that have not been appropriated by that day must be returned to the federal government.
On September 12, Jared Boyd, chief of staff for Mayor Jones, updated the St. Louis Board of Aldermen on the status of efforts to use the ARPA funds on-time. He told board members who were present at a board hearing that the administration intends to review the status of spending in October and will identify funds that are in jeopardy of being clawed back by the federal government. According to Boyd, a bill will then be introduced at the Board of Aldermen that sweeps all dollars that are at risk of being clawed back by the government and allocate those funds to an already-approved project. Boyd cited the new 9-1-1 center as a possible – or even likely – recipient of those funds. We will learn more in four to six weeks.
The Infrastructure Bill
In addition to the ARPA act described above, Congress also passed a $1 trillion infrastructure bill. This much needed and comprehensive bill had languished during Trump’s presidency, but it was prioritized by the Biden Administration and passed by Congress.
According to the City’s “Friendly Streets” webpage, the City will oversee $300 million in infrastructure repairs and thoroughfare rebuilds between 2024 and 2027. Take a look for yourself by visiting the webpage. The plans are impressive.
Rams Lawsuit Settlement Money
By now, most St. Louisans know that local attorneys sued Stan Kroenke and the NFL over their dishonest and damaging conduct as they plotted successfully to move the Rams from St. Louis. Eventually the suit was settled, with the City of St. Louis being awarded $280 million -- $30 million of which was quickly earmarked for improvements to the Convention Center.
How Will the City Spend the Rest of This Money?
When the funds originally were delivered, City officials placed the money in a non-interest-bearing account. When this was discovered, all hell broke loose. City officials responded by investing the funds into an interest-bearing account and the balance has grown from $280 to $315 million.
The Board of Aldermen initiated a project that sought community input on the best way to spend the funds from the Rams settlement. The results of that process can be found on the Board of Aldermen’s webpage here.
Create An Endowment?
In recent days, Mayor Jones told KSDK that if she ‘could wave a magic wand’ she would invest the Rams settlement money and ‘live off the interest’ every year.
Greater St. Louis, Inc. (the regional chamber of commerce) sent a letter several weeks ago urging City officials to create an endowment with the funds. And, at a Board of Aldermen committee hearing this past week, virtually every alderman who commented or asked a question punctuated their communication with a short statement that they were inclined to support the endowment plan. It appears that this idea is developing some steam. There is certainly more to come.
So, the City is Rich, Right?
Apparently not.
In July, Mayor Jones created a task force charged with studying City revenue streams and making recommendations for change. St. Louis Public Radio reported that ‘the 12-member task force will meet monthly, issue a report within six months, and then dissolve. Its members have been instructed to study how the city currently raises money, how sustainable those sources are, and identify other potential revenue streams. Read the whole story here.
The Best of Times; the Worst of Times
So, these are the best of times and maybe the worst of times. City officials have their work cut out for them. It is essential that these windfalls of money be spent wisely and effectively. It is also essential that the threats to the City’s revenue streams are identified and managed. There’s a lot at stake and a lot to do. And we will be watching…
-Nancy Rice
