Southern Indiana

New Albany City Council will cede control of $16.83 million in federal pandemic relief funding to the city’s redevelopment commission after weeks of debate over the issue.

Council members passed the ordinance in a party-line vote Thursday, 5-3, to charge redevelopment with handling American Rescue Plan funding. One member was absent. The redevelopment commission is composed of three members appointed by Mayor Jeff Gahan and two council members from its Democratic majority.

Council member Scott Blair, an Independent, sided with the Republicans over liability concerns. He said the State Board of Accounts will hold the council responsible for any mistakes or mishandling of funds by the redevelopment commission.

“We’re duplicating a lot of staff time and costs because of this, because we’re transferring to redevelopment,” Blair said during the meeting. “It could go the other way. We could leave the funds in the council, and if we see we can’t do it, then we amend it and hand it back to redevelopment.”

Blair also questioned the commission’s statutory authority to disperse the money, since much of it will go towards items that are unrelated to redevelopment.

But council member Jason Applegate, who serves as the council’s appointment to the redevelopment commission alongside Jennie Collier, said the commission has similar responsibilities with Community Development Block Grant (CDBG) funds. Redevelopment administers the grants, which also come directly from the federal government.

“When I break it down just to the common-sense level of it, this is exactly our jobs,” Applegate said. “We are appropriating the funds to the best body that can handle the mechanism to get what is sent to us from the federal government, and we’re doing it the exact same way.”

Applegate said the council still has oversight over the decisions through quarterly meetings, and the ordinance can be changed at any time if redevelopment is not “doing their job.” But Blair argued that such a situation would only arise after a mistake had been made and money was lost.

During each redevelopment meeting, Collier said members receive a claims summary that the commission has to approve.

“I can’t think of any much more financial transparency than getting a list of every check that they’re paying,” she said.

Al Knable and Josh Turner, the council’s two Republican members, argued against the proposal on philosophical grounds. The pair proposed several amendments that would give the council more power, but all failed except one requiring the council to be informed of any changes to spending guidelines.

Knable said elected officials should maintain control over the relief funding.

“What is the biggest loss from transference of this responsibility is the absolute direct accountability to our voters,” Knable said. “We are the most accessible body. We can be directly held accountable if folks don’t like our decisions. That is what I fear is being lost here and regret the most.”

The United States Treasury Department outlined four uses for relief funding: assisting people and businesses negatively impacted by the pandemic, paying premiums to essential city workers, offsetting government revenue losses, and investing in infrastructure.

The public will have the opportunity to provide input on how the money should be spent in New Albany, but how those meetings will be conducted has yet to be decided. Redevelopment meetings are also open to the public, though Blair said the commission’s midday meetings are less accessible to working citizens than the council’s evening meetings.

Kate Hess Pace, a New Albany resident, said during public comment that the city should be creative in how it seeks input from the community.

“Given what our residents have gone through over the last year, I would really like to see this money be an opportunity for engagement, for a belief that local government can really improve people’s lives, and to really be invited to be a part of the process,” she said.

“And that means more than a public notice, but an invitation from the city to become invested in how we spend our public funds together.”

John Boyle covers southern Indiana communities and health for WFPL News. He is a Report for America Corps member.