McALLEN, Texas – A candidate for mayor of McAllen says all the money going to his city under the American Rescue Plan should be distributed to small businesses.

Othal Brand, Jr., maintains the City of McAllen does not need any stimulus money. According to U.S. Rep. Vicente Gonzalez, the City of McAllen will receive almost $42.6 million under the $1.9 trillion American Rescue Plan Act.

“You keep hearing candidates say how concerned they are for the small business community and how they want to help the little guy. And yet when the City of McAllen got pandemic money under the CARES Act, less than ten percent of it went into the private sector,” Brand said.

“The city consumed the rest of it, tens of millions of dollars, and spread out two or three million dollars to the private sector. That is not fair.”

Brand said the City of McAllen has not suffered during the coronavirus pandemic like the small business community has.

“What we need to do and what I would do with that pandemic money… that is not government money, that is pandemic money, for those affected by the pandemic. The cities have not been hit like the private sector has. That is where the money needs to go. All of it.”

Asked if McAllen’s city services have been weakened because of the pandemic, Brand said: “I cannot see it. I would like them to tell us how they have suffered. They have still got their property tax money, they have still got their sales tax. Where did they suffer?”

On the other hand, Brand said, some small businesses in McAllen have gone bust while many others have lost half their orders. 

“It has been heartbreaking to see some mom and pop stores close their doors while others have desperately tried to hang on, through no fault of their own. I believe that when your private sector suffers like that, then the city needs to adjust and help compensate for that in any way they can.”

Brand said giving the $42.6 million to the small business community will help create a new mindset at city hall.

“This money is not going to affect the city. It is not their money. It is not coming from the taxpayers’ coffers. It needs to go to those who have suffered the most. It is simple. It is a mindset. We need to have a new mindset at city hall.”

Rep. Gonzalez explained how the American Rescue Plan would work in a recent letter sent to McAllen Mayor Jim Darling and McAllen city council members. Gonzalez said $45.57 billion is set aside for municipalities with populations of generally at least 50,000 using a modified Community Development Block Grant formula and sent directly from Treasury to the cities. Under the bill, he wrote, McAllen is expected to receive $42,598,469.00. 

“Funding for counties, metropolitan cities, and non-entitlement units of local government (generally those under 50,000 inhabitants) will be separated into two tranches,” Gonzalez wrote.

“To the extent practicable, Treasury is required to send out the first tranche (equal to 50% of the recipient’s allocation) within 60 days of enactment, and the second tranche (the remaining 50%) not earlier than one year after the first disbursement.”

Gonzalez said counties, metropolitan cities, and non-entitlement units of local government are not required to submit a signed certification of need to Treasury. 

In the letter, Gonzalez explained how and where cities such as McAllen can spend American Rescue Plan dollars. They include:

  • Responding to the pandemic or its negative economic impacts, including assistance to households, small businesses, and nonprofits, or aid to impacted industries such as tourism, travel, and hospitality;
  • Premium pay to eligible workers performing essential work (as determined by each recipient government) during the pandemic, providing up to $13 per hour above regular wages;
  • For the provision of government services to the extent of the reduction in revenue due to the pandemic (relative to revenues collected in the most recent full fiscal year prior to the emergency);
  • To make necessary investments in water, sewer, or broadband infrastructure;
  • Transferring your allocation to a private nonprofit organization, Tribal organization, public benefit corporation involved in the transportation of passengers or cargo, or special- purpose unit of State or local government, if the recipient government so chooses. The recipient entity would need to use the funds consistent with the purposes listed above. 

Gonzalez said prohibited uses include:

  • Offsetting, either directly or indirectly, a tax cut made since March 3, 2021; or
  • Being deposited into a pension fund.

Editor’s Note: The Rio Grande Guardian will provide information on where the other candidates for mayor of McAllen believe the $42.6 million should be spent as soon as we receive it. The other candidates are: Michael Fallek, Dr. Shahid Rashid, Veronica Vela Whitacre, and Javier Villalobos. 

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