Relief funds must be spent soon

Local governments hustle to allocate hundreds of millions of dollars before Dec.30 deadline.

Four major metro counties and the city of Atlanta are in a race

against time to spend hundreds of millions of dollars in federal coronavirus aid before a Dec. 30 deadline, after which they have to give the money back.

Atlanta, along with Fulton, Cobb, Dekalb and Gwinnett counties, received direct subsidies from the $2 trillion Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, passed at the end of March.

The money didn’t arrive in government coffers until the end of April. Since that time, the Treasury Department has issued a series of guidelines and clarifications on how the money can be used as local officials struggledto maximize the aid.

Clint Mueller, legislative director of the Association County Commissioners of Georgia, said a Treasury decision over the summer allowing CARES funds to be spent on public safety salaries, without having to prove a direct pandemic impact, effectively gives local governments an outlet to spend any remaining funds before the end of the year.

“They’re all doing different things,” Mueller said of the local governments that received CARES money. “I think there’s enough flexibility that if they run into a roadblock ... they can back up and spend it differently.”

But much of the unspent funds is earmarked for food, housing and small business aid, programs that take time to administer and which could suffer if money has to be reallocated in the remaining two months of the year.

Some officials say a shortage of protective gear and building materials has stymied spending as well. In Fulton, a fight broke out between cities and the county over how to divide the money, causing further delay.

Eryn Hurley, associate legislative director for the National Association of Counties, said the problems in Georgia are playing out across the country. That’s why the organization is calling on Congress to extend the Dec. 30 deadline. It’s unclear whether lawmakers intend to address the issue in the coming weeks or when they vote on funding the government in early December ahead of a potential shutdown.

Spending money so as not to lose it means aid for vulnerable residents and businesses could be redirected to salaries for police and fire, Hurley said.

“If [the deadline] were to be extended, it would actually allow for counties to spend those dollars in ways that support their communities and residents, instead of just spending to spend,” Hurley said. An extension would also apply to cities that received funds.

Gwinnett County, for example, has spent $58 million out of a pot of $163 million as of the end of October.

Of that, $16 million has been set aside for housing and utility assistance. But only $834,000 of the housing aid has been distributed. In addition to facilitating awards to nonprofits that work in housing support, the county recently announced an ambitious program to run from November through the end of the year that would make rent payments directly to landlords on behalf of residents who are in danger of immediate eviction.

In response to emailed questions, a spokesperson for the county said Gwinnett is “well aware” of the December 30 deadline.

“We have identified other expenditures that are CARES Act eligible that will be utilized, if need be, to ensure our Coronavirus Relief Funds are fully expended,” wrote Heather Sawyer. As for the housing programs, she said, “The program administrators are evaluating expenditure plans to ensure timely expenditure of funds and may recommend reallocation of funds if appropriate.”

The county did not say where those funds would be reallocated, and did not respond to a direct question about whether they would go toward public safety salaries as many other jurisdictions are doing.

Atlanta may find itself in a similar squeeze.

Earlier this year, the city budgeted $44 million from CARES for housing and small business assistance. But according to a budget presentation in late October, only $5.7 million of that money has been spent so far. The housing program is off to a slow start after encountering problems, and the small business grants are still in process.

“At this point we are confident that the city will deploy all of [CARES] funds within the required timeframe,” Jon Keen, the city’s chief operating officer, told council members during the presentation. “We will plan to do a final set of reallocations if needed in early December.”

That leaves less than a month to distribute $38 million for rent and small businesses before it’s reallocated, most likely to eligible city payroll expenses, according to the presentation. As of the October presentation, Atlanta had spent about 25% of the $88 million it received from the CARES Act. City officials did not respond to numerous requests for comment over several weeks.

Cobb County has spent about 55%, or $72 million, of its $132 million allocation. But it has also struggled to get housing aid out the door, and has allocated less than the city of Atlanta for that purpose.

Commissioners recently gave an additional $4 million to rental assistance, bringing the total for rental and mortgage housing aid to about $14 million. Of that, about $2.5 million has been spent, according to county finance documents.

“We think this is going to really pick up,” Cobb Finance Director Bill Volckmann said of the housing assistance program. “The big focus from our chairman and our board, they wanted to figure out how to get this out into the community to do the most good.”

Volckmann expressed confidence that Cobb would expend all its CARES money by the deadline. He noted that departments that couldn’t spend the money in time have already returned it for reallocation elsewhere.

Dekalb has spent about 66% of its $125 million received from CARES as of early November. The county has set aside $29 million for future COVID spending, despite the deadline.

“While the stated rules of the CARES Act requires that all funds be spent by December 31st, there is also intense lobbying in Washington for an extension to that deadline,” spokesman Quinn Hudson wrote in an email. “We have a budget strategy in place to exhaust all CARES funds by December 31st, however we believe it is very likely that guidance will be forthcoming announcing an extension to the original timeline.”

Fulton County, which did not respond to a request for comment, has spent $68 million of its $104 million, according to a budget presentation last week.

Fulton CFO Sharon Whitmore said during the presentation that the county will start “de-obligating” money this month from projects or purchases that cannot be completed in time, and put those funds toward public safety salaries.

Marjy Stagmeier is the chair of the board of Star-c, one of the nonprofits administering rental assistance on behalf of Cobb County. She said more housing aid is needed generally, but said such assistance has “gotten very political.”

“There’s a lot of misunderstanding about people that need help,” she said. “The vast majority of people who call truly have a need. They’re embarrassed, or they’ve never reached out for help before. They tell us this is the first time they’ve never not been able to pay rent.”