County gets creative on COVID-19 aid spending
Officials exercise broad discretion on federal relief funds
Marin County is taking a broad approach to how it applies federal pandemic relief, officials said.
Marin has incurred more than $75 million in costs from the COVID-19 pandemic. It is expecting to be reimbursed by the Federal Emergency Management Agency for $25 million. The $1.9 trillion American Rescue Plan Act has also distributed $25 million to the county, which expects to get another $25 million next month from the federal government.
As the Biden administration seeks an additional $22.5 billion to maintain COVID-related health services, some Republicans in Congress and others have questioned whether the money allocated to pandemic response has been spent appropriately. Some economists, such as former treasury secretary Lawrence Summers, blame the prodigious relief package for helping fuel inflation.
Across the country, projects funded using American Rescue Plan Act money have taken some unusual forms, included a high-end hotel and spa in Broward County, Florida; a minor league baseball stadium in Dutchess County, New York; new prisons in Alabama; and irrigation systems at two golf courses in Colorado Springs, according to the Associated Press.
When officials in Broward County ran into trouble justifying the direct use of $140 million in federal coronavirus aid to build an 800room hotel, it transferred the money to its general fund, reported the money as federal compensation for lost tax revenue, and then transferred it from the general fund back to the project, AP reported.
In Marin, the county has committed to spending its first $25 million in American Rescue Plan Act money in six areas: $6.7 million on Project Homekey and homelessness services; $5 million on racial equity; $5 million to address climate change; $4 million on fire facilities; $2.3 million on COVID-19 economic impacts; and $2 million on public health and mental health services.
Bret Uppendahl, the county budget manager, said costs incurring during the pandemic include the value of county staff time lost when employees were redirected to COVID-related assignments, “as well as revenue decreases resulting from the pandemic's economic impacts.”
“The federal government made the legislation to be as flexible as possible at the local level.”
— Bret Uppendahl, Marin County budget manager
“FEMA reimburses us for things like vaccinations, testing and outreach,” Uppendahl said.
Uppendahl said during a budget workshop last month that county staff will recommend that supervisors spend the additional $25 million in American Rescue Plan Act dollars next year in eight areas.
The earmarks include $7 million on homelessness/permanent supportive housing; $5 million on revitalization of public housing in Marin City; $4 million to create a southern Marin services hub; $4 million on climate change and sea level rise; $1 million to address the economic impact on West Marin; $1 million to expand broadband; $1 million to strengthen the infrastructure of local federally qualified health centers; and $2 million on COVID response.
Recipients of the funds must document that the money is spent in one of four categories: to respond to the COVID-19 public health emergency or its negative economic impacts; to provide economic support for essential workers; to compensate for government revenue lost due to the pandemic; or to make necessary investments in water, sewer or broadband infrastructure, according to the U.S. Treasury's “final rule” on spending of American Rescue Plan funds, which took effect April 1.
Although only $2 million of Marin County's $50 million is expressly earmarked for COVID response, much of the spending appears applicable to the pandemic. Some spending areas are less obviously related, such as racial equity and climate change, which combined account for $14 million of the total.
Uppendahl said the county isn't necessarily claiming that any of these 14 one-time expenditures meet the Treasury's guidelines.
The compliance report that the county submitted to the Treasury in January states that it plans to spend its American Rescue Plan funds on three projects: $32.6 million to compensate the county for payroll costs for public health staff, $7.6 million to rehire public sector staff; and $10 million to compensate the county for revenue loss.
The county doesn't even have to demonstrate it lost that much in revenue.
“The federal government made the assumption that anybody of our size lost at least $10 million in revenue because of the pandemic,” Uppendahl said.
He said the county qualifies for compensation for rehiring even though 13% of the county's staff positions are unfilled. Within the Department of Health and Human Services, 15% of positions are vacant.
Since the county is being compensated by the federal government for its pandemic costs, it can afford to spend $50 million on one-time projects over two years, Uppendahl said. He says the county doesn't have to get the federal government's approval for the 14 specific one-time expenditures.
“That's the way we read it,” Uppendahl said. “The federal government made the legislation to be as flexible as possible at the local level. It's up to our board to decide how to spend those monies.”
Katie Rice, president of the Marin County Board of Supervisors, said that in addition to ensuring the continuity of government services while the county was responding to COVID, the American Rescue Plan Act “was also meant to provide opportunities for government to make investments that stimulate the local economy and improve communities for future generations.”
“We've been really intentional about allocating our COVID relief funds for investments that will having lasting positive impacts,” she said.