Flint, MI– Last week, the Flint City Council learned that Flint Mayor Sheldon Neeley’s administration spent just under $75,000 of American Rescue Plan Act (ARPA) funding without their approval.
During a May 12, 2022, budget hearing, the council learned that 50 speed humps were purchased using the funding. Up until then, the council believed spending of the multi-million-dollar grant needed to be authorized by them.
“That would be news to me,” said Flint City Councilman Quincy Murphy, upon learning of the expenditure during the budget hearing.
In March 2021, the city learned that it would be receiving $94.7 million dollars in COVID-19 relief as part of a $1.9 trillion economic stimulus package intended to aid the country in recovering from the pandemic.
Since then, the council has held multiple community input sessions to hear from residents about their priorities for the funds, established an ad-hoc ARPA committee, and had several discussions about the process for approving the allocation of the federal dollars.
Many members of the council have advocated for creating a full budget and plan using community input before spending money– a plan that the city’s compliance firm has also encouraged.
“We are gathering the input that was taken from those sessions as part of working with the administration and putting together an overall plan to be presented and discussed with Council at a future time,” said Brian Jarzynski, the executive director of the city’s compliance firm Ernst & Young, during a council meeting on April 26, 2022.
At that meeting, Jarzysnki said that the council and administration would work together to form a draft plan, then a budget strategy, and then initiate an application process for organizations to apply for the funds.
That draft plan hasn’t come before the council yet, although they have approved a few expenditures already, including $16 million for a demolition program, and premium pay for essential workers. Those expenditures, and others, were all brought to the council in the form of a resolution to be approved or denied.
But during the budget hearing on May 12, 2022, city officials stated that the administration had purchased 50 speed humps for around $74,000 using ARPA funds.
This came as a surprise to the council.
“I was under the impression that with it being grant dollars, the city has to accept those dollars and we also have to be the ones to authorize the spending out of that,” Flint City Council Vice President Allie Herkenroder said.
Herkenroder said she thought the administration’s spending of the ARPA funds was “very problematic.”
“I’m really, really upset that these were purchased out of ARPA dollars without any consideration or notification to this council,” she said. “We have a limited amount of funding and it’s really, really concerning to me.”
According to the city’s Chief Financial Officer Robert Widigan, the administration didn’t have to notify the council of this purchase, per a resolution the council approved last year accepting the grant funds and the city’s Code of Ordinances.
The resolution that the council approved on June 14, 2021, accepting the ARPA grant states: “It is resolved that the appropriate City officials are hereby authorized to do all things necessary to appropriate grant funding and abide by terms and conditions of the grant from the United States Department of Treasury.”
Citing the city’s purchasing ordinance in an email to Flint Beat on May 20, Widigan said that “council notification was not required.”
In his email, Widigan stated that the city’s purchasing ordinance only requires council approval, if it is more than $75,000. He said that the speed humps, which include signage and hardware kits, cost $74,570.
Widigan said that while the council did not need to be notified, the administration checked with their compliance firm, Ernst & Young, “to ensure it was an allowable expense under ARPA guidelines.”
During the budget hearing on May 12, Flint City Councilwoman Tonya Burns also expressed her concern with purchase.
“We’re purchasing right at that level which doesn’t seem transparent,” she said. “And people, we want transparency.”
Flint City Councilman Eric Mays said he felt like this purchase was “a political game being played.”
“The $74,000 for speed bumps. That’s the kind of abuse. It’s a trickery,” Mays said during a city council committee meeting on May 18. He said he’d like to see the purchasing threshold for council approval lowered to $3,000.
In the email to Flint Beat, Widigan said that no other ARPA fund spending under the $75,000 threshold has been done besides the purchase of the speed humps.
“Any ARPA spending requests in excess of $75K have been sent via resolution to the council according to purchasing threshold requirements outlined by the purchasing ordinance,” he said.
But the council is looking to make sure the administration does not spend any more ARPA funding, even under the $75,000 threshold, without council’s approval in the future.
“The council is bringing forward a resolution to require all ARPA fund expenditures to come before council,” said Flint City Councilwoman Judy Priestley. “We can’t do anything in the past, but we can do it for the future.”