Battle Over Compliance Stalls $168 Million St. Louis COVID Recovery Bill

click to enlarge Board Bill 2 fails at Board of Estimate and Appointment Meeting - Screenshot
Board Bill 2 fails at Board of Estimate and Appointment Meeting

A COVID-19 relief package stalled on Friday as city leaders clashed over federal guidelines, potentially delaying the disbursement of $168 million in funds to St. Louis until as late as September.

In a meeting of the Board of Estimate and Apportionment, Mayor Tishaura Jones and Comptroller Darlene Green refused to move forward with a bill championed by Board of Alderman President Lewis Reed, citing advice from city attorneys that portions of the plan to fund economic development don't fit the federal criteria.

“It’s in the city’s best interest to make sure that all of our language is explicitly in the board bill before it passes,” Jones said. “Because at the end of the day, ... my name is on every report that goes to the federal government every month about how we are extending these funds, and so it is my fiduciary responsibility as an elected official to uphold the U.S. Constitution, to make sure that we are doing this the right way.”

Board Bill 2 outlines how the first of three portions of $517 million allocated to the City of St. Louis in COVID-19 relief funds from the American Rescue Plan Act would be spent. The bill's failure in the Board of Estimate and Apportionment follows the a nearly twelve-hour-long Board of Aldermen meeting on Tuesday where the bill was approved for the first time.

Jones, Reed and Darlene Green are the sole members of the Board of Estimate and Apportionment, the city's chief financial board. Jones and Green declined to second a measure to move the bill forward, despite Reed’s insistence that the bill is legal.

“Even your attorney today said, ‘No it is not, it is not illegal.’ It’s legal,” Reed argued.

But that attorney — Matt Moak, the interim city counselor — says that the bill fails to meet guidelines set by the American Rescue Plan Act.

“It is not apparent that the economic development site in Section Six meets ARPA guidelines,” Moak said. “I think that’s very bad practice.”

Section Six of the bill aims to spur general economic development along four streets in north city with the help of $33 million in federal funds. But Moak wrote in an opinion on July 9 that ARPA guidelines say that "the use of ARPA funds for general economic development is not allowed as a general rule.”

Reed, though, says the allocations under Section Six are allowable as the funds will be spent on economic development that addresses economic impacts of the pandemic. Recipients of funds must be able to demonstrate that funds target negative economic impacts stemming from the pandemic, according to a FAQ page released by the U.S. Department of Treasury.

“That’s what will happen under Section Six,” Reed says.  “That’s the program that will be formulated and put together with the measures in place to assure that if, indeed, grants are given out, those grants are given out to qualified recipients.”

Jones said passage of the bill could result in future financial penalties for St. Louis.

“Comptroller Green and I agreed that as fiscal stewards of our city, we cannot approve legislation that goes against U.S. Treasury rules and could force St. Louis to pay back millions of dollars in funds,” she said in news release after the meeting.

In the release, Jones blamed Reed for Friday's impasse, which she said would delay relief for St. Louis families.

"Yet his refusal to fix provisions to comply with federal regulations, despite multiple attempts by my office to work with him on this issue, will hold up millions of dollars in direct relief and public health infrastructure for St. Louis families," Jones said in the release.

At the meeting, Reed said there’s more at play than issues in the bill.

“The only thing that’s standing between people from the City of St. Louis getting relief from COVID-19, getting the resources they need put in place or not, is the board of E.A. right now,” Reed said.
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