American Rescue Plan brings big money to Spokane, but leaders still haven’t decided how to spend it

Months after the first $40 million of federal coronavirus aid landed on its doorstep, city of Spokane leaders have yet to agree on a process to distribute it.

Now, both council members and the mayor feel like they’re closing in on a consensus regarding how funding decisions will be made.

The council ran into friction with Mayor Nadine Woodward’s administration, which felt that early proposed iterations of the process effectively excluded her office from the discussion. Some council members also wanted more of a say in the review of applications.

And more than a year into the pandemic, there are also fundamental disagreements about how urgently the money is needed.

Several council members are calling for money to be distributed as quickly as possible, while Woodward’s administration has chosen to err on the side of fiscal restraint, allowing more time for public input and waiting for clarity from the federal government on spending guidelines.

The tension peaked recently when Councilwoman Karen Stratton left the informal three-member workgroup leading the council’s American Rescue Plan efforts.

“Neighborhoods, businesses, community centers, they need this money, and they needed it a month ago,” Stratton told The Spokesman-Review. “I just felt like we weren’t moving fast enough, and I feel that egos and politics get in the way sometimes and I get frustrated.”

As the delta variant rips through Spokane and again throws a wrench into daily life, some organizations are saying they’re back in the same spot they were in the early months of the pandemic and need support.

“It’s very difficult to see that other cities and counties in Washington state have already completed this process – their (chief financial officers) and their lawyers have already signed off on their American Rescue Plan spending,” said Melissa Huggins, executive director of Spokane Arts. “I meet regularly with statewide colleagues in arts and culture and they’re kind of scratching their heads as to why we’re taking so long.”

The city was awarded $81 million through the federal American Rescue Plan, with the first half available this year and the second half arriving in 2022. The city has until the end of 2024 to spend the money.

The council adopted a broad framework for spending the money in a nonbinding resolution earlier this year, but has yet to agree on spending specifics or solicit applications for funding.

This week, council members and administration officials met twice to try to iron out their remaining differences. There is definite agreement that the stakes are high, as the $81 million in federal assistance is unprecedented.

“I wish we were already out spending the money, but we want to make sure that we have a process that’s transparent and effective,” Council President Breean Beggs said.

Not CARES

The administration and council members have been careful to distinguish between the rapid distribution of CARES Act money last year and the American Rescue Plan funds the city is sitting on now. Most importantly, the rules for spending it aren’t the same.

The American Rescue Plan funding comes with numerous restrictions, which has given the administration pause.

“There are only a small group of eligible uses of these dollars and those uses will require all of the same – or most of the same – federal reporting and compliance requirements as any type of federal funding, which was not the case with our CARES dollars,” city CFO Tonya Wallace explained to The Spokesman-Review in July.

But federal rules aside, Stratton assumed that the city would use the same process to distribute American Rescue Plan funds as it did $9.9 million in CARES Act money last year. A group of three council members met with administration officials behind closed doors to review applications for funding, then the list of winners was presented to the full City Council for final approval.

Stratton, Beggs and Councilwoman Betsy Wilkerson were on that committee last year.

“We had very little disagreement on it,” Stratton said.

But that process miffed Council Member Michael Cathcart, who felt like he was asked to vote on a finalized list without knowing why some were chosen and some weren’t.

He described it as a “take it or leave it approach.”

“I’ve brought up my concern multiple times that there continues to be the quasi-process in place where we have three council members again in a subcommittee making a lot of decisions,” Cathcart said.

Despite assurances that the full council would be more involved this time around, Cathcart said he hasn’t seen change.

“There has not been any real engagement with myself in terms of the process, (and) making sure the process makes sense, making sure we’ve considered a variety of ideas,” Cathcart said.

The process

Beggs’ vision is to have a single point of contact for potential spending ideas, with an email address listed on a city webpage along with basic guidelines.

“We specifically made it low-barrier; it’s not an application form,” Beggs said.

The council’s three-member workgroup would review proposals and advance ideas it thinks the full council would endorse. Woodward’s administration would be asked for input before the concept is reviewed by the full council in a study session. If the council likes the concept, it would be fleshed out by city staff and council members before returning to the full council for final approval.

To be inclusive of members like Cathcart, Beggs said all council members would have access to all proposals. To assuage the concerns of the mayor, Beggs said it will be made clear that the administration is allowed to weigh in early in the process.

“On the council’s part, they’re more open to having us be more part of the process, which is encouraging because I felt before like we were getting boxed out a little bit, so that’s nice,” Woodward said.

Stratton stepped down from the three-member workgroup and will be replaced by Councilwoman Candace Mumm, whose final term expires at the end of the year.

“There is a plan, I think, in place, and process that I think is complicated, at best, and I think there are too many steps in it,” Stratton said.

Spokane County and city officials held a press conference in July to announce that they would begin a listening tour to garner community feedback on how the American Rescue Plan money should be allocated.

To date, no such events have been held, but Woodward said she plans to join council members in forums this fall – even if the process hasn’t been finalized.

“I think it’s still OK to get some community engagement before we know for sure what that process is,” Woodward said.

While elected leaders wrestle over process, Huggins said performing arts venues and artists are hurting and facing a “tremendous amount of uncertainty.” Do they reopen? If they reopen, what rules and safety guidelines do they implement? And will patrons feel comfortable attending in-person events at all?

The Spokane Arts Grant Awards program offers grants of up to $10,000 to artists and arts organizations. It’s funded by a portion of the 5% admissions tax charged on tickets for events in Spokane.

Because of the pandemic, admissions tax revenue dropped by 60% in 2020 compared to 2019. The trend is similar in 2021, which means the program’s budget will be impacted through at least 2023.

“Things are just as bad now for the arts and culture sector as they were last year, and next year we get another hit,” Huggins said.