Washington (DC)
March 20, 2009

This week mayors sent to Washington their “Recovery Czars,” the persons assigned to coordinate stimulus funds, to meet with me and the Conference of Mayors staff before we all went, along with NLC and NACo representatives, to the White House grounds and spent the day at the Old Executive Office Building hearing from Vice President Biden and representatives from 12 main-line agencies: Commerce, HUD, HHS, Energy, Transportation, Labor, Education, Homeland Security, Interior, Justice, EPA, Agriculture.

Before the 12 Agency reps presented, we heard from Chairman Earl Devaney, the Chief “enforcer” who heads up the Recovery Act Transparency and Accountability Board. He affectionately refers to his Board as the “Rat” Board. He was most honest about the challenges he faces with no offices, no computers, and no staff as he moves to establish for the first time ever the transparent website recovery.gov. He acknowledges there will be fraud. He acknowledges there will be computer hackers. You know from his walk and his talk, that he has seen it all. And his attitude and humility about the enormity of his task makes you want to help him do his job. And from the questions and answers to Chairman Devaney, it was clear that all city and county reps present are ready and willing to provide the data collection and anything he wants for transparency and accountability.

The OMB presentation came at the end of a long day with a 45-minute lunch break, and there were several questions throughout the day ending with OMB about what types of projects, the job creation quotient, Davis – Bacon issues, guidances not yet issued and the even formulas of our Energy Block Grants not yet issued.

Vice President Biden continues to warn us on stimulus spending and he is most direct about this. He says if he detects wasteful spending he will use the power of his office to publicize it. He said Wednesday, “I’ll show up in your city and say, ‘This is a stupid idea.’ You think I’m kidding. This is the only part the President was right about; don’t mess with Joe.”

Vice President Biden continues to be most direct to local officials about stimulus money that has not reached city halls. The Justice Department money and $9 billion of highway money is moving out. But we do not have the $1 billion CDBG Stimulus money yet or the $2.8 billion Energy Block Grants yet. In fact we don’t even have any official spending guidelines yet from HUD or Energy. The Vice President cites the funding limitations in the Recovery Act Statute, Section 1604, which precludes – “None of the funds appropriated or otherwise made available in the Act may be used by any State or local government, or any private entity, for any casino or other gambling establishment, aquarium, zoo, golf course or swimming pool.” He states we should go beyond the law and not request funding for those projects within the law, but not appropriate.

We also thank the White House Intergovernmental Team for providing our people the opportunity to ask direct questions. Much was learned, and much must be learned as we work to do our best to bring together all for a successful implementation of the Recovery Act. It was a much-appreciated meeting. The staff you sent to Washington were given my word to follow up and provide them a user-friendly communication two-way system as we go forward.

Following our meeting on Wednesday, Vice President Biden has sent letters to the Big 7 group, governors, counties, National League of Cities, city managers, state legislators, and council of state governments suggesting “that some types of projects, thought not explicitly prohibited, are inconsistent with the purpose of the Act, and should not be funded.”

No doubt, local officials will need further delineation on what projects are lawful but “inconsistent with the purpose” of the Recovery Act.

Vice President Biden mentions “The Presidential Memorandum that the President is issuing.” We of course, will forward you the guide points contained in the Presidential memorandum once we receive or see it.

Mayors and local governments through the transition period pointed out the transparency local officials live with, promote and participate in through city councils, public hearings and neighborhood meeting. And we, of course support transparency.

The other issue is how we define what is appropriate, or projects that are within the law. We have within the Conference of Mayors what I call, “The Plusquellic Doctrine.” Mayor Don Plusquellic was our USCM President during the period the Bush Administration was attempting to eliminate the CDBG program due to their alleged assertion of “wasteful spending.” Mayor Plusquellic went to Capitol Hill and begged them and called out to the Bush Administration to point-blank tell us what we should or shouldn’t spend CDBG money on, and he promised we would adhere.

Today the Plusquellic doctrine is relevant to where we are with the Recovery Act stimulus monies.

We await further guidance on spending from the President, the Vice President, OMB, and the Rat Board on the funding that will come directly to city halls. Of the 787 billions of dollars that will be distributed throughout the nation, only three agencies will provide us money that is direct to cities. They are $1 billion in CDBG, $2.8 billion in Energy Block Grants from Energy, $1 billion in the COPS program and $2 billion in Byrne JAG grants. Hence in addition to directions from the President, Vice President, OMB, and the Recovery Board, we will be paying special attention to the three Departments: HUD, Energy, and Justice, for their guidelines since they are charged by the Congress to administer the funding that comes directly to our cities. That amount totals $6.8 billion, which is only 0.86 percent of the total amount. Mega billions of the balance including highway monies and state stabilization funds go directly to the State Houses.

Again, thanks for your participation and we must stay in close communication as we continue to support the Obama White House and the federal agencies to implement the Recovery Act and to create and save millions of jobs during the current national economic crisis.