SCHENECTADY – Stating he wanted to sidestep “publicly sparring” with the council president, Mayor Gary McCarthy expressed a willingness to negotiate an expedited timeline for forming a committee that would examine the city’s $52.9 million in federal coronavirus relief funds.
McCarthy made the comments during Monday’s Finance Committee meeting in reaction to Council President John Mootooveren’s previously expressed concerns about the city “sitting” on the money.
McCarthy said he at first wanted to form the committee after Labor Day, close to his city budget presentation in October.
When Mootooveren said he hadn’t tried to spar, but was simply being responsive to residents who had called him wanting a status update, McCarthy asked him to pass along their names and numbers so that he could update them about the city’s plans.
The near $53 million in American Rescue Plan Act (ARPA) money to the city was announced in March.
The American Rescue Plan includes $350 billion for eligible state, local, territorial and tribal governments to respond to the COVID-19 emergency and restore jobs.
According to the U.S. Department of the Treasury, recipients can use the money to support public health expenditures, address negative economic impacts caused by the public health emergency, replace lost public sector revenue, provide premium pay for essential workers, and invest in water, sewer and broadband infrastructure.
The mayor said the city had already conducted a community needs assessment, as well as a five-year plan for Community Development Block Grant neighborhoods that, while fairly comprehensive, don’t take into account the impact of COVID-19 and things to be learned from new census data.
McCarthy said the city wants to “put that money so that it’s going to have the biggest impact, and to be able to do it in a coordinated fashion so it’s not just the city, but the school district and county working simultaneously to leverage the resources to have long term sustainable results that wouldn’t be obtained by actions by the individual ones.”
McCarthy said the city wants to foster opportunities for parents who have had to work from home while their children participate in remote learning.
McCarthy said it’s likely that some remote learning would be continued by schools, and at the same time, the city wants to foster economic growth and create job opportunities for not only local businesses, but globally, considering businesses can hire people in the city to support operations anywhere around the world.
Meanwhile, Ferrari said discussions have already taken place by city officials looking to “hire back people that we didn’t employ in 2019 and 2020.”
Schenectady ended the year with a $8 million budget deficit. The mayor instituted a a hiring freeze and cut non-essential expenditures as a result of the deficit.
Of the ARPA funding, $8,922,680 has been designated as loss of revenue, Ferrari said.
So far, the city council has allocated $233,000 of the funding, including $145,000 to the Boys and Girls Club, and $38,000 to the Fire Department (about $30,000 for medication due to changes on coronavirus protocols and $8,000 for cleaning trucks, offices and buildings).
Another $50,000 has been dedicated to the Police Department to hire retired officers to oversee COVID-19 protocols for entry to City Hall.
Eligible costs for ARPA funding covers March 3, 2021 through Dec. 31, 2024, with the city obligated to spend it by Dec. 31, 2026. Whatever is left over will be returned to the federal government.
Ferrari said the money can’t be used for debt service, pension plans nor directly or indirectly offset a reduction in net tax revenue.
Under public health, the money can be used for COVID testing and vaccinations, negative income impacts, CDBG area neighborhoods, and water sewer and broadband infrastrcture.
Reiterating comments McCarthy had already made, Ferrari said the city doesn’t want to set aside ARPA funding for infrastructure in anticipation of a portion of the $1 trillion transportation bill that was passed by the U.S. Senate.
Council Majority Leader John Polimeni lauded McCarthy and Ferrari for their management of the funds thus far.
“If we went off and spent it right off the bat we would certainly not be doing very good justice with that money,” he said.
“The other aspect that we need to be careful of is the $3.5 trillion budget package, and what kind of money we’re going to get there,” Polimeni said. “What’s going to trickle down to the state? What’s going to trickle down to us, the county, school district to work with so we can make sure we’re being effective and not misappropriating the money.” The prospects of that budget package passing in Congress are uncertain.
Ferrari said the city would begin quarterly reporting of its ARPA funding beginning Aug. 31.