After more than six months of community and City Council discussion, City Manager Erik Walsh outlined on Wednesday a draft plan for how to spend more than $210 million in federal coronavirus relief funding over the next four years.

The council was largely receptive to the American Rescue Plan Act (ARPA) spending framework, which would make significant investments in the city’s COVID-19 response, mental health programs, small businesses, economic development and infrastructure.

The city has roughly $199 million left from its $326.9 million ARPA allocation; $97.5 was used in the 2022 budget and $30 million was used for utility assistance last year. The draft framework also includes $13 million left over from the coronavirus recovery plan funded through the CARES Act.

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Up to $50 million would be spent on pandemic response — testing, contract tracing, personal protection equipment and vaccine incentives — much higher than the $30 million that was considered in December.

The fast-spreading omicron variant and demand for testing changed that calculation, Walsh said. “I want a bigger cushion to fall back on … if we run out of cushion room, then we’re going to cut our budget to be able to do the things we needed to do.”

The rest of the funding plan balances community and council feedback, Walsh said. “We got the town halls, we had the [community] survey, and we had two public conversations that the council had. And so we’re taking all that [in] to build this framework.”

In addition to COVID-related expenses, ARPA funding can be used by cities that demonstrate pandemic-related revenue loss for “governmental services” such as economic development, Deputy City Manager María Villagómez said.

The draft framework would allocate $94.7 million to what Walsh called “impactful investments” and one-time projects, including $10.5 million for Morgan’s Wonderland, a theme park designed to be accessible to people with special neds; $10 million for the Texas Biomedical Research Institute’s infrastructure expansion and $6 million for Educare, a childcare facility on Texas A&M San Antonio’s Southside campus. For infrastructure, nearly $14 million would be put aside to repair bridges and the city’s worst streets.

Texas BioMed had sought $11 million from the 2022 bond process, but withdrew its request amid protests against its animal research. The nonprofit institute is planning a multimillion dollar expansion and the ARPA funding would cover about one-third of the expansion’s infrastructure costs.

There were also general funding areas that were identified as priorities — at the very top was mental health services, which is allocated $26 million in the draft plan. Youth services was allocated $10 million, digital access and digital literacy allocated $8.4 million and programs for the arts and seniors allocated $5 million each.

Council committees will later decide how to spend that money, either by bolstering existing city programs or giving it to outside organizations that already do work in those areas.

With $16.8 million, the plan would fund for two years mental health, domestic violence and benefit navigation programs the city established with its 2022 annual budget.

It also includes funding for “immediate needs,” Walsh said, including $10 million for the city’s Emergency Housing Assistance Program and nearly $31 million for small businesses.

Several council members suggested tweaks to the spending plan before it comes up for a vote next Thursday — most notably adding more money to the suggested allocation for Morgan’s Wonderland and Educare.

That means cuts will have to be made elsewhere, Walsh said. “We’ll come up with some alternatives [for Council to consider].”

Council members also expressed an interest in increasing assistance for small businesses, specifically nonprofits, as well as allocating $50,000 to the Children’s Bereavement Center of South Texas.

“We have limitless needs of limited funds and you can see that it’s not easy to apply the resources appropriately,” Mayor Ron Nirenberg said. “But when we have everyone’s participation — which we have had today and for several months now — we can get to the best possible situation.”

All council members except Clayton Perry (D10) expressed support for an element of the plan that would allow public art funding to be restored in the 2022 bond. ARPA would fund $3.8 million for the city’s bridge construction program, so that $3.8 million in bond money can go towards public art.

In addition to the $10 million through ARPA, the city’s emergency housing program will receive a $4.5 million grant from the federal government on Thursday — which city officials expect will be its last.

These two sources are expected keep the program running through the first week of March, when the emergency housing program will revert back to its pre-pandemic “risk mitigation” model.

But the city is keeping its Right to Counsel and eviction court support service in place, Walsh said.

Since April 2020, more than $200 million has been spent to help residents pay rent, mortgages, utilities and other expenses through the emergency program.

As the coronavirus pandemic continues, the council may want to adjust its programming, Walsh said. “I think that’s an important element of maintaining some flexibility — for us to be able to respond to new issues that arise or different priorities or changing conditions. So that’s an important part of the framework as well.”

ARPA funds must be allocated by Dec. 31, 2024, and spent by the end of 2026, according to the U.S. Department of the Treasury.

Iris Dimmick

Senior Reporter Iris Dimmick covers public policy pertaining to social issues, ranging from affordable housing and economic disparity to policing reform and workforce development. Contact her at iris@sareport.org