Grant Ashley | July 24, 2023

If Buffalo Mayor Byron W. Brown has his way, $60 million of federal Covid-19 relief funding originally intended for public benefit projects will fill budget shortfalls and go to small businesses across the city.

But the dozens of local nonprofit and community organizations who were supposed to get that funding aren’t having it – and have raised questions about the transparency and legality of the city’s process.

The Partnership for the Public Good, a local think tank, and several nonprofit and community organizations called on the Buffalo Common Council to block the proposed changes and asked the U.S. Treasury Department to investigate the City of Buffalo’s use of funding from the American Rescue Plan.

They’re accusing the city of misusing federal funds, breaking federal rules while allocating funds to organizations and violating the spirit of the ARP by moving tens of millions of dollars into the “black hole” of general revenue replacement “without explanation.”

“If this $60 million is moved to revenue replacement, more than half of the city’s (American) Rescue Plan funds will have gone to revenue replacement and be lost to these deeply important, poverty-fighting, safety-creating causes,” Partnership for the Public Good executive director Andrea Ó Súilleabháin said Monday. “If there’s an explanation for why such a large sum is needed for revenue replacement, it’s incumbent on the mayor’s administration to explain those numbers.”

City spokesman Michael J. DeGeorge offered a brief statement to The Buffalo News:
“The City followed all the federal guidelines regarding the ARP funding process.”
City Finance Commissioner Delano Dowell did not immediately respond to requests for comment.

Mayor Brown’s change of plans
The Buffalo Common Council originally allocated $115 million of ARP funds to a variety of project funds – including ones for public health equity, job training, the arts and public safety – in August 2021, months after the American Rescue Plan Act was passed. The city started soliciting proposals from local nonprofits and community organizations for most of those funds in October 2022.

Local groups have complained that the application process has been slow, but now funding may not come at all.

Under Brown’s plan, which goes before the Common Council on Tuesday, $59.9 million would be cut from those funds. Cuts to each fund range from 35% to 89%.

The lion’s share of those cuts, $50 million, would cover budget shortfalls in 2024 and 2025, adding to $100 million already allocated for that purpose. The rest, $9.9 million, would be divided evenly among the Common Council’s nine districts and used at the discretion of individual Council members.

At the same time, Council members will be asked to approve over $560,000 of relief for downtown Buffalo’s Braymiller Market, which Brown has vigorously campaigned for. A majority of Council members have been obstinate, but the promise of $1.1 million for each of their districts may convince enough of them to change their minds.

The Partnership for the Public Good and other local organizations called the proposed reallocation to revenue shortfalls “incredibly upsetting and hurtful to the communities who need the support the most,” but acknowledged that reallocating ARP funds to cover budget shortfalls was “perfectly legal.”

But they’re not so sure that giving individual Council members unilateral control over millions of federal dollars, labeled as “revenue loss replacement” in proposed legislation, is lawful.

“Moving $10 million of American Rescue Plan funding to Council member discretionary funds is simply not revenue loss placement, and it should not be allocated in this way,” Ó Súilleabháin said. “This is a pretty clear misuse of funds and an attempt to wash the funds of their federal restrictions so you can then go use them for ineligible expenses.”

Several organizations applying for ARP funding also reported that some city employees made “highly inappropriate comments” during interviews in the grant application process, the Partnership for the Public Good said.

Those comments included statements like “Don’t worry, you’re receiving funds; we just can’t tell you how much yet” and “You’ll never receive this award, because the mayor does not like you/your organization.”

One city employee was alleged to have been dismissive of a program proposal that would create a workforce development hub for women on the East Side, saying, “You’re just fixing broken women.”

That employee, who was named in the Partnership for the Public Good’s report, did not immediately respond to requests for comment.

The report also noted that during Common Council meetings, Council members had referred to lists of funding recipients before the application process was finished and even advocated for or against certain organizations.

“You cannot discuss individual recipients of an RFP (request for proposal) process in a political setting like the Common Council,” Ó Súilleabháin said. “That is simply not in line with federal rules for procurement.”

Work left to be done on ‘Buffalo’s most urgent needs’
Ó Súilleabháin fears that funding cuts to public benefit projects will continue if Brown’s proposed reallocations pass.

Under the proposal, the public health equity initiative meant to launch a new health clinic on the East Side would be cut from $9 million to just under $1.7 million. Allocations to a program meant to create a “neighborhood improvement corps” would be cut from $9 million to $1 million.

“How can a couple of these project lines even happen with the amount that has been cut?” Ó Súilleabháin said. “It’s setting some of these budget lines up to fail and will give them an easy argument to just move more (funds to cover budget shortfalls).”

And Buffalo needs the money, she says.

“Federal American Rescue Plan funding was intended to address Buffalo’s most urgent needs,” Ó Súilleabháin said. “Certainly none of these, when we look at our list of project funds, have been alleviated since 2021.”