Bexar County and the city of San Antonio have taken vastly different approaches when it comes to spending hundreds of millions in federal pandemic relief grants.

The city has already pledged almost three-quarters of its nearly $327 million American Rescue Plan Act (ARPA) funds, while the county has taken a slower approach, formally obligating roughly a fifth of its nearly $389 million federal haul so far.

These disparate approaches have led to questions from some elected officials whether the two local governments are collaborating enough to get the most bang — or community impact — out of their combined bucks.

The answer is yes, there will be some collaboration, officials said — but not for the bulk of the money and not quite yet.

During City Council and council committee meetings over the past several weeks, several council members expressed concern that the county hasn’t committed to specific allocations, meaning the city might be unable to leverage its own spending or avoid duplicating efforts.

“They were complaining: ‘Well, the county is not letting us know what they’re going to do with their ARPA dollars,'” Bexar County Judge Nelson Wolff recalled. “Well, you know what? We don’t know what we’re doing yet.”

That’s because the county has taken a “cautious” approach, Wolff told the San Antonio Report, waiting until the final spending rules were released by the U.S. Department of the Treasury in January and became effective April 1.

The county must now follow 437 pages of rules guiding decisions about how the money can and cannot be spent on and how to report the use of funds. The city opted to — legally — start spending before those rules took effect.

The main eligible uses are for public health, addressing negative economic impacts of the pandemic (including affordable housing, childcare and school projects), premium pay for employees, revenue loss as well as water, sewer and broadband infrastructure.

“It’s taken us some time to figure out how we’re gonna handle it,” Wolff said.

The county’s ‘pause button’

The county used $53 million of its first tranche of ARPA funds to reimburse itself for revenue loss and administrative costs, according to a 2021 county report. Its most recent quarterly report shows an additional $17 million has since been obligated for strategic development, staff, health services, vaccine awareness and other costs.

Bexar County Judge Nelson Wolff speaks during a Commissioners Court meeting in March.
Bexar County Judge Nelson Wolff speaks during a Commissioners Court meeting in March. Credit: Nick Wagner / San Antonio Report

The county approved a spending framework in July, which shows almost $219 million will go to replace lost revenue.

Staff is now reviewing a long list of possible allocations that have been proposed by county officials and outside groups over the past year — including $60 million to create a public health division within its hospital system — to ensure that they qualify under the final rule, he said.

The county has received more than 240 applications from local entities seeking ARPA funding, Thomas Guevara, chief of staff for the county manager, told commissioners at their April 5 meeting. “It’s going to take weeks” to sift through the requests and make sure they meet both federal requirements and county goals, he said.

Recipients of federal grants through counties and cities will be subject to audits and must comply with administrative requirements, cost principles and other requirements related to procurement, contracting and conflicts of interest, Guevara said.

Commissioner Justin Rodriguez (Pct. 2) said he appreciated the county’s slower approach.

“There’s a reason [the Treasury] gave us several years to spend this money,” Rodriguez said. “I think it was a good time to hit the pause button, and just make sure that we’re setting ourselves up — and these organizations up — for success.”

ARPA money will be distributed to local governments in two batches; the first came last summer and the second is expected to be distributed this summer. Federal rules say funds must be allocated by Dec. 31, 2024, and spent by the end of 2026.

Wolff expects the county’s review of funding requests to be completed by June; after that, Commissioners Court can start formally obligating funds to various initiatives and agencies.

“Public health, mental health and drug abuse, those things fit really, really good” into the federal spending guidelines, Wolff said. “So for me, that’s where the bulk of the money ought to go.”

The city’s approach

The city began obligating ARPA funding under the Treasury’s much-shorter interim spending rule issued last May.

“The U.S. Treasury was encouraging cities to allocate funds using the interim rule,” said Deputy City Manager María Villagómez.

The city earmarked $97 million to replace lost revenue in the 2022 budget and $30 million for utility assistance last year. The spending framework Council approved in February reserves $50 million for pandemic response expenses, $10 million for its Emergency Housing Assistance Program and $10 million for city employee premium pay.

Texas Biomed received $10 million in ARPA funds after it pulled its $11 million funding request from the city's 2022 bond package.
Texas Biomed received $10 million in ARPA funds after it pulled its $11 million funding request from the city’s 2022 bond package. Credit: Nick Wagner / San Antonio Report

The city allocated another $10 million to the Texas Biomedical Research Institute; $15 million to Morgan’s Wonderland, a special needs accessible theme park; and $7 million to Educare, a child care facility on Texas A&M-San Antonio’s Southside campus.

The remaining $88 million will now to go through a committee process. The city has already received 33 unsolicited requests from groups and agencies seeking $350 million worth of grant funding, Villagómez said.

Three council committees have started to narrow down how to spend that money to achieve various goals related to pandemic recovery, either by bolstering existing city programs or giving money, through a competitive process, to outside organizations that already do work in those areas.

“There are some needs that we need to address today and then there are some that we can take a little bit more time to be more thoughtful and strategic on how we spend those dollars,” Villagómez said. The goal is to have plans for each approved by City Council in the fall or sooner.

Collaboration ahead?

The city’s committee process may or may not line up with county commissioners’ actions this summer.

Still, Wolff said the county will communicate its spending plans with the city. “We’re not there yet. When we do get there, we’ll start sharing the information.”

City Manager Erik Walsh has had initial conversations with County Manager David Smith about partnering on mental health initiatives, Villagómez said.

A recent report by the county’s Task Force on Behavioral Health and Criminal Justice, which was formed by Wolff in April last year, outlines more than $37 million in initiatives aimed at improving the local mental health system and its connections with the criminal justice system. That report could help guide city and county ARPA funding aimed at mental health initiatives, Villagómez said.

“I’m hopeful that we can coordinate on mental health” and other priorities such as youth and senior services, she said.

Mayor Ron Nirenberg has said collaboration with the county is needed, but it’s not the most important issue.

“For the average taxpayer in our community, they couldn’t care less about where the money came [from],” he said. “It’s what it’s going to be doing for our community. We’ve got to work together to address some of these major needs in our rescue operation.”

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