Cleveland City Council voted to amend the city’s annual budget proposal to include an additional $4.6 million from the general fund for neighborhood improvements, despite objections from Mayor Justin Bibb’s administration.
That amount will be added to the mayor's $5.6 million proposal to support the "Neighborhood Investment Fund," which helps pay for improvements like parks, benches and catalytic projects across Cleveland's 17 wards.
That amendment will give each ward $600,000: the same amount as last year. The Bibb administration proposed $329,000 per ward.
"Our job is to make sure that residents feel the impact of the investments in the neighborhood and that they see them, that they touch them, that they feel them — that's what our job is," Griffin told reporters after a Monday meeting between council's committee chairs, at which Ward 3 Councilmember Kerry McCormack held up renderings of a new playground in his ward funded by the Neighborhood Investment Fund.
Representatives from the finance department cautioned council members in a Monday finance committee meeting that the additional funding will create a structurally unbalanced budget.
"A structurally balanced budget was a mandate from City Council that I took seriously upon entering office in 2022. This fiscal prudence has led to upgrades to our bond rating, growth of our emergency cash reserves and increased interest earnings that help support vital city services," Bibb said in a written statement released Monday night ahead of council's evening meeting. "Today, the members of City Council have broken from this trend and have produced a budget that spends more money than we make."
City Council leadership called foul on that argument, pointing to a $61 million carryover from last year’s budget. Council leaders say that does not include or affect the city's "rainy day" fund or the job reserves.
"That is a lie," McCormack said of the administration's structural deficit argument. "Right now, we have expenses versus revenues, which is clearly laid out, okay? We are talking about unspent dollars from the [20]24 budget. So I don't know what school the finance director went to, but structurally balanced means revenues meet expenditures. We haven't touched that."
Bibb argued that the carryover balance should be viewed as "a critical lifeline in times of economic crisis," citing upcoming "economic storms," including 30 union negotiations he expects to total more than $45 million over the next three years in pay raises.
"I will not support any legislation that unnecessarily dips into the city's rainy-day fund, carryover balance or any other reserves, putting our financial health at risk," Bibb wrote. "Our carryover balance is meant to ensure that in cases of emergency, we have cash available to support our community; It is not intended to finance special projects. This is dangerous and irresponsible, and at a time of grave uncertainty in federal funding, we cannot in good conscience support it."
Council members, however, said these projects are necessary to their wards.
"This is not touching the rainy day fund; It’s not touching the payroll reserve," McCormack said. "It is utilizing tax dollars from our residents that they expect us to put in neighborhoods ... It deploys tax dollars from our residents that were unspent last year into neighborhoods for quality of life projects."
Bibb pointed to $6.4 million in unspent monies in the Neighborhood Investment Fund that "council has let sit idle for two years."
Griffin and McCormack said some council members will "bank" those annual dollars to put them toward larger projects.
But they also pointed a finger back at the administration.
"What the administration is doing is blaming council for a failure to administer funds when it's in fact the administration's job to administer the funds," a City Council spokesperson told Ideastream. "There are countless projects and hundreds of thousands — if not millions — of dollars that council has already approved that we're waiting to get out the door because the administration is not doing their due diligence."
Each year, the mayor submits his budget proposal to be vetted and approved by City Council. Council members have the ultimate say over the final budget, though typically, the legislative and executive bodies work together in negotiations to seek a compromise.
Council and the mayor's office were able to reach a compromise on "everything else," according to Griffin.
"This administration, for whatever reason, believes that it's okay that the neighborhoods — the communities outside of the central business district — wait," Griffin said. "And that's why I keep saying, there's an urgency."
A structurally balanced budget is different from a balanced budget. State law requires the latter, which means a government spends less money than it receives. A structurally balanced budget, which the mayor's office is advocating for, is where recurring revenues are sufficient to cover recurring expenditures.
McCormack argues none of council's asks at the negotiation table were recurring, aside from the staffing requests for an LGBTQ+ liaison and additional EMS staff.
The budget must be passed by April 1, per the city's charter.
