With a 9-1 City Council vote, San Antonio adopted a new spending plan for the $212.5 million that remains from federal pandemic recovery grants.

The American Rescue Plan Act (ARPA) funding will make significant investments in the city’s COVID-19 response, mental health programs, small businesses, economic development and other sectors over the next four years.

“Our process is not over,” Mayor Ron Nirenberg said. “We still have a lot of work to do. But some of it we can put a period to the end of the sentence and get on with work that we haven’t started yet.”

Councilman Jalen McKee-Rodriguez (D2) cast the lone vote against the measure.

Much of the more than five-hour community and council discussion ahead of the vote centered around a controversial $10 million in the plan for Texas Biomedical Research Institute as well as transparency in the allocation process for individual organizations.

Council Member Jalen McKee-Rodriguez asks a question during a City Council meeting in October.
Council member Jalen McKee-Rodriguez (D2) asks a question during a City Council meeting in October. Credit: Nick Wagner / San Antonio Report

Texas Biomed; Morgan’s Wonderland ($15 million), a theme park designed to be accessible to people with special needs; and Educare ($7 million), a child care facility on Texas A&M-San Antonio’s Southside campus, will automatically receive funding from ARPA under the spending plan, unlike other organizations that may have to go through a long selection process.

The ARPA plan also directly reserves $50 million for the city’s pandemic response expenses, $10 million for its Emergency Housing Assistance Program and $10 million for city employee premium pay.

The city has roughly $199 million left from its original $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 2020 Coronavirus Aid, Relief and Economic Security Act.

The remaining ARPA funds, which will be conveyed to the city in May, must be allocated by Dec. 31, 2024, and spent by the end of 2026, according to the U.S. Department of the Treasury.

The committee process

More than half of the new ARPA dollars (a little more than 52%) will go through a committee process.

This money was divided among general funding priorities that emerged at public input and council meetings. The top priority was mental health services, which was allocated $26 million. Small businesses and nonprofits were allocated nearly $31 million, youth services was allocated $10 million, digital access and digital literacy were allocated about $7 million, programs for the arts and seniors were allocated $5 million each and $4 million specifically for nonprofit agencies.

A successful amendment from Councilwoman Ana Sandoval (D7) moved $1.5 million away from digital access and $2.5 million from small businesses to the added nonprofit category.

Councilwomen Adriana Rocha Garcia (D4) and Phyllis Viagran (D3) voted against removing the funding aimed at closing the digital divide in San Antonio.

“Digital equity and access is foundational to reducing systemic inequities and driving the next generation of societal and economic development,” Garcia said. A 2020 report found that 23% to 38% of residents in districts 1, 2, 3, 4, and 5 – the center city and South Side – don’t have access to the internet. “I’m tired of leaving them behind.”

The nonprofit category is intended to reduce the competition for nonprofits that may qualify for small-business assistance and capture groups that may not fall into the other categories, such as immigrant rights groups, Sandoval said.

“As designed, the framework risks leaving out numerous social services that our community absolutely needs right now,” she said.

Before committee work begins, the full council will meet in March to discuss what issues or problems each bucket of money should address.

Three council committees — Economic and Workforce Development; Community Health, Environment and Culture; and Public Safety — will then narrow down how to spend that money to achieve that goal, either by bolstering existing city programs or giving it, through a competitive process, to outside organizations that already do work in those areas.

“For example, if the outcome desired is to improve access to summer employment programs for the youth, then the conversation at the committee level is going to be, well, who can do that?” Walsh explained. “Do we contract that out? Do we hire more interns at the city? Or is it a combination?”

The process will likely take several months and include multiyear funding plans that will ultimately require council approval.

How some groups jumped ‘to the front of the line’

Morgan’s Wonderland, Texas Biomed, and Educare were three of 31 entities that submitted written, unsolicited funding requests to the city to receive ARPA funding.

“How did they jump to the front of the line when city [staff] never offered the rest of the residents of this town the same opportunity to negotiate such sweetheart deals?” Graciela Sanchez, executive director of the Esperanza Peace and Justice Center, said during the public comment portion of the meeting.

“Where is the transparency?” Sanchez added. “The rest of the funding for small businesses, the arts, domestic violence, mental health, seniors, youth and the digital divide will be … deliberated and defined by your council committees. But these three groups won’t have to go through the same scrutiny that the rest of us have to.”

Morgan’s Wonderland and Educare were identified by the community or council as priorities throughout the ARPA input process, City Manager Erik Walsh said. He rejected the notion that the process was not transparent or equitable.

“We spent a lot of time on that,” Walsh said. “And I get that there are some [who] may not be in agreement with the staff recommendations, but that does not mean that it wasn’t transparent and that we weren’t deliberative and that we didn’t engage the community.”

As for Texas Biomed, that funding recommendation emerged from the council-approved list of items for the 2022 municipal bond. The nonprofit institution previously sought $11 million from the 2022 bond process but withdrew its request in December amid protests against its animal research.

Texas Biomed pulled its $11 million funding request from the city's 2022 bond package after several public comments urged the city not to provide money to the research facility.
Texas Biomed, which is to receive $10 million under the spending plan, had pulled its $11 million funding request from the city’s 2022 bond package in the wake of public comments urging the city not to provide money to the research facility. Credit: Nick Wagner / San Antonio Report

Texas Biomed officials originally came to the city in April to request ARPA funding, but that was before the city knew what kind of projects were eligible, Walsh said. “When they withdrew from the bond program, one of the top categories [for investment] from the town halls and the survey was economic development … so I added it to the [ARPA] list.”

Some residents argued that funding for Texas Biomed doesn’t meet the spirit of what ARPA is intended for.

In addition to COVID-19-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.

Lauren Loney, the Texas state director for the Humane Society of the United States, called that a “legal loophole.”

Because of its work on a coronavirus vaccine and antibody therapies, Texas Biomed has “only experienced growth during the COVID-19 pandemic; [it] is neither inappropriate nor an effective use of this funding,” Loney said.

Texas Biomed to expand

Several residents and animal rights advocates told City Council that the testing and research performed on animals at Texas Biomed’s facility should disqualify it from receiving public funds.

“If the City of San Antonio truly wants to bring innovative scientific discoveries to the city, I would encourage you instead to pivot to human-centered, non-animal research methods — not Texas Biomed, an organization … that relies on outdated animal experiments,” said Stacy Sutton Kerby, director of government relations for Texas Humane Legislation Network, an animal welfare advocacy group.

Several others cited the 159 baboons that had to have frostbitten fingers, toes and tail tips amputated after Winter Storm Uri in 2021.

Various leaders of local organizations, including UT Health San Antonio, UTSA, and the Southwest Research Institute, sent letters in support of the funding for Texas Biomed.

“The research conducted at this institute saves lives and does so on a global scale. Think about the most devastating diseases that afflict mankind malaria, parasitic infections, tuberculosis, hepatitis, AIDS, and COVID,” said Dr. Jamo Rubin, who chairs Texas Biomed’s board. “Research conducted here in San Antonio is advanced treatments that are rolling back these diseases, saving lives and creating better health outcomes.”

Texas Biomed has more than 4,000 animals, including baboons, macaques and marmosets, as well as animals such as mice and guinea pigs to test vaccine and treatment efficacy and effects.

The $10 million will be used for infrastructure as part of its 10-year, $270 million expansion plan to increase capacity, Rubin said.

“We are looking under every rock to find that funding but infrastructure, electrical, water, natural gas, sewer systems, those are not the kind of things that donors [and federal grants] are not likely to contribute towards,” said Bruce Edwards, Texas Biomed’s chief financial officer.

While some council members expressed concern about giving Texas Biomed ARPA funding, none of them made motions to reallocate that funding to another initiative.

McKee-Rodriguez made an attempt to have council vote on that funding separately, but that motion failed on a 6-3 vote (Sandoval abstained).

McKee-Rodriguez explained that he couldn’t support the ARPA spending as a whole because it doesn’t address other affordable housing, healthy food access, or stray animals. He, too, had concerns about transparency.

“How can we stand up here and say that it doesn’t seem shady and that it doesn’t cast doubt on and discredit the very real public engagement that we did conduct?” he said.

Councilman Clayton Perry (D10) was not present for the meeting as he was tending to a family matter out of town, a spokesperson said.

Texas Biomedical Research Institute and UT Health San Antonio are financial supporters of the San Antonio Report. For a full list of business members, click here.

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