City, county eligible for $3.9M from CARES Act

The city of Hot Springs and Garland County are eligible for up to $1.5 million and $2.4 million, respectively, from the $150 million in federal coronavirus relief the state set aside for local governments, according to funding and allocation models advanced earlier this month.

The $150 million comes from the $1.25 billion the state was allotted from the Coronavirus Aid, Relief and Economic Security, or CARES, Act, in the spring. The steering committee the governor appointed to make funding recommendations to the Legislature recommended $75 million each for cities and counties.

Cities’ allocations are based on population,

and counties’ allocations on the formula used to distribute state turnback money. The leaders of the Arkansas Municipal League and Association of Arkansas Counties said the application process will allow unspent funds to be returned to the state and spent elsewhere before the Dec. 30 CARES Act spending deadline.

Cities and counties have until Oct. 30 to apply for the funds. A second application period for those that haven’t exceeded their spending caps will end Nov. 16.

“What we aspire to do is to make this as quick a process as possible, so that any money that is not used by cities and counties can quickly get turned back for distribution elsewhere,” AAC Executive Director Chris Villines told the committee. “… We are very careful not to ask for more money than we think cities and counties should get out of this. There should be no unjust enrichment for local government. This should simply be a recompense for those costs that are allowable under the CARES Act that we can turn in and get some reimbursement for.”

AML Executive Director Mark Hayes said the deadlines for the two application periods give the steering committee six weeks before the Dec. 30 spending deadline to direct unspent funds to other areas.

Lost revenue is not an allowable expense under guidance the federal government issued for the CARES Act, officials said. Reimbursable costs are limited to pandemic-related expenditures realized from March

1 to Dec. 30 that local governments didn’t account for in their

2020 budgets.

“This is not a payment,” Hayes said of the dollar amount established by the allocation model. “That is simply the amount that a city or town could get if they have the appropriate evidence that meets the criteria of the CARES Act and fits the model that (Department of Finance and Administration) and the vendor are putting together.

“This needs to be evidence-based so that it’s clear that they’re reimbursing for actual things that were spent related to COVID.”

The committee endorsed a list of more than two dozen personal protection and cleaning items preapproved for reimbursement. The steering committee would have to approve reimbursement requests exceeding $50,000 for any of the preapproved items. Other requests exceeding $50,000, or those that don’t fall within the 17 expense categories the U.S. Department of Treasury established, will also require committee approval.

Approval of all other requests will be delegated to DFA and CTEH, the consulting firm awarded the more than $3 million contract to develop and staff the application process and help the state prepare for a federal compliance review of the city and county relief funding.

DFA and CTEH could also approve advance funding for city and county projects of up to

$50,000. The state could recoup funds that were misused or not properly documented by withholding turnback money, DFA told the committee.

The application process the committee approved provides funds for local governments to assist residents with coronavirus-related rental and mortgage assistance.

“It’s my understanding they’ll be able to fund food banks, rental assistance and mortgage assistance where it’s COVID related,” DFA Director Larry Walther told the committee. “We’re going to be able to support those cities and counties to a great degree and assist those citizens who are already in deep because of this COVID crisis.”

County Judge Darryl Mahoney said county officials will attend a Sept. 29 training session on the application process.

“We have a lot of paperwork to do,” he said. “We have a training class we’ll all be going to to figure out exactly how we’re supposed to do it. It’s basically for reimbursement of money that was spent. Things that were utilized due to COVID. Things that you couldn’t utilize due to COVID.

“It’s to try to get us back to what we would be if COVID was not here. It is not to directly offset loss of revenue. It’s expenses we have that we wouldn’t normally have, overtime expenses and things like.”

The city of Hot Springs was approved for $254,743 in coronavirus relief from the U.S. Department of Housing and Urban Development’s Community Development Block Grant program. The Hot Springs Board of Directors approved an allocation division in May earmarking $126,850 for testing supplies for clinics and personal protective equipment, $76,824 to quarantine infected homeless people and $50,824 to feed low-to-moderate income people.

City Manager Bill Burrough said last week that the city has been unable to get CDBG reimbursements for drive-thru testing centers it helped set up.

“It can only be for reimbursements, and you have to show it’s for low- or moderate-income people,” he said. “During the pandemic, we were more concerned about getting test sites up and running and being able to manage the crisis. We didn’t have everyone who came to get a test in one of our drive-thru centers fill out a form to say we’re low or moderate-income. We were under the understanding that funding was coming, and we’d be able to use it. Unfortunately, we’ve not been able to get any of that reimbursed.”

Burrough said the shower trailer the city purchased for the homeless population will be submitted for CDBG reimbursement.

“That’s a population that doesn’t have the necessities we enjoy,” he said. “Certainly we need that to help prevent COVID spread. We’ve got $50,000 earmarked for food programs. Whether that’s through Project HOPE, Jackson House or Salvation Army, we want to be able to get that out there.”