City of Lawrence and Douglas County projected to receive $42.6 million total from latest federal stimulus package
photo by: Nick Krug/Journal-World Photo
The latest federal COVID-19 stimulus package is projected to send tens of millions into the coffers of Lawrence and Douglas County governments, while also allowing local leaders more flexibility to spend the money and more time to weigh those decisions than did past pandemic-related relief.
The recently approved $1.9 trillion federal aid package, the American Rescue Plan, provides more than $350 billion for state, local and tribal governments. Options for spending the money include offsets of lost revenue, infrastructure improvements and various forms of economic support for the individuals and industries that have struggled the most during the pandemic. The city and county are currently projected to receive around $42.6 million total, and local leaders are optimistic as they await their official allocations and more detailed guidance for how it can be spent.
“I think that this is one of those things where people are really excited, and we know that it will do a lot of good,” County Commission Chair Shannon Portillo said. “We’re just waiting on those details.”
Based on population and other factors, it’s estimated that Douglas County will receive $23.7 million from the American Rescue Plan and that the City of Lawrence will receive $18.9 million, according to current projections from the National Association of Counties and the National League of Cities, respectively. Local governments are expected to receive their allocations in two installments, with the U.S. treasury allocating the first half within 60 days of enactment of the plan, which was signed into law by President Joe Biden on March 11, and the rest no earlier than a year later, according to a NACo analysis of the legislation. The U.S. Department of the Treasury will oversee and administer the payments, and official allocations and guidance for local governments are forthcoming.
Kimberly Qualls, education and communications director for the Kansas Association of Counties, said that although the organization was waiting on more guidance from the treasury department, what does seem clear is that restrictions on how money is allocated and deadlines for when it must be spent are not as tight as past pandemic aid packages.
“There are far less upfront restrictions and short-term deadlines for counties to try to meet,” said Qualls, adding that having more time is definitely a positive for local governments.
For example, under the plan, governments can use the funding to pay for government services with some restrictions, and the deadline to spend funds is Dec. 31, 2024. That’s in contrast to the rules for prior funding allocations provided to local governments under the Coronavirus Aid, Relief, and Economic Security Act, also known as CARES.
Under the CARES Act, spending had to be directly tied to the pandemic, governments had limited time to decide how to allocate funds, and all the money initially needed to be spent by Dec. 31, 2020, though that deadline was later extended. Those requirements created challenges for counties and cities as they sought to meet deadlines while still responding to immediate needs of the pandemic. Douglas County received $24.9 million in CARES funding, and as the Dec. 31 deadline drew nearer, the County Commission had to reallocate hundreds of thousands of unspent dollars to make sure all of the funding was spent by the end of the year, as the Journal-World has reported.
Another difference between the American Rescue Plan and the CARES Act is the substantial funding flowing directly to cities, which will be in addition to stimulus funds dedicated for specific purposes such as addressing homelessness or supporting public transportation that cities can also qualify for. With allocations distributed under the CARES Act, the City of Lawrence received $1.47 million of the county’s $24.9 million allocation; a $446,000 grant through the Community Development Block Grant program; and more than $8 million in other funding, consisting largely of a $7.1 million grant to support the city’s transit operations. The city also facilitated in the distribution of additional funding to social services and other organizations through existing funding channels such as Emergency Solutions Grants.
As a city of more than 50,000 people, Lawrence is projected to receive the $18.9 million as part of the most recent stimulus plan directly from the U.S. Treasury. For cities below 50,000, the money is distributed from the treasury to states and then to the smaller cities. While preparations for those distributions are underway, League of Kansas Municipalities Executive Director Erik Sartorius said the projections of how much governments receive could change. Sartorius said a current challenge was building an accurate list of all cities and counties, as several states have found some of their local governments missing from the list. He said that until that was settled, figures for local governments were just estimates.
The American Rescue Plan allocates $362 billion to help states, territories, counties, cities and tribal governments cover increased expenditures, replenish lost revenue and mitigate economic harm from the COVID-19 pandemic, according to the National Association of Counties analysis of the legislation. Of that amount, $130.2 billion will go to counties and cities.
When it comes to responding to economic impacts of the pandemic, allowable uses for the recovery funds include but are not limited to assistance to households, small businesses and nonprofits, or aid to affected industries such as tourism, travel and hospitality. In contrast to the CARES Act, state and local governments can also use the federal money to fund their government services, though the amount of money spent on services cannot exceed revenue loss related to the pandemic. In another change, governments can use the money to make necessary investments in water, sewer or broadband infrastructure. Governments can also use funding to provide additional, or “premium” pay, for eligible essential workers.
Mayor Brad Finkeldei said the funds would certainly have a positive impact on the services both the city and county could provide, and he thought the first step for the city would be determining what revenue losses qualified for the offsets. He said apart from revenue such as sales tax, the city will need to determine if revenue losses in other areas, such as the city’s transient guest tax fund or its utility fund, would qualify.
“We have a lot of different funds, and I think we need to figure what that means,” Finkeldei said. “Once we know what that number is, we can help fill those buckets up.”
The city stopped charging late fees and shutting off water service for nonpayment of utilities after the pandemic began, and Lawrence residents owe more than $1.4 million in back utility payments, according to city reports. Finkeldei said he’s interested in whether the city can use the stimulus funds to offset some of those unpaid bills and whether that can be done directly, as opposed to through an application process. The city created a utility assistance fund using funding from the CARES Act, but it required residents to apply for the assistance and the fund ended up being underutilized.
Finkeldei said he’d also like to see the city focus on mitigating other impacts of the pandemic, including providing funds to hard-hit industries, toward addressing homelessness, and toward rent, food and other assistance for residents. As far as potential support for infrastructure projects, Finkeldei said the city has a long list of water and sewer projects in its Capital Improvement Plan, and funding could potentially be used to pay for some of those projects in cash instead of using bonds, which would save the city and taxpayers money in the long run.
Apart from the direct allocations to city and county governments, the American Rescue Plan provides hundreds of billions of dollars for vaccine distribution and to support community health centers. Regarding the overall impact of the plan, Portillo said she was particularly excited about the funding provided to help support the vaccine rollout and public health in general, including mental and behavioral health. She said she was eager to see how the county might use those funds to increase access to behavioral health services in Douglas County. When it comes to the county’s direct allocation, Portillo said she thought there were some infrastructure projects the county could consider, including broadband infrastructure, as access in rural areas of Douglas County is an issue.
Whatever the priorities identified by the city and county commissions end up being, both Finkeldei and Portillo said it would take coordination between the city, county and local service organizations. And compared with the tighter timelines of the CARES funding, both expressed relief and appreciation about having more flexibility for when the money can be spent and more time to discuss those allocations.
“I think the county did a fantastic job with allocating the CARES funding and working through the CARES funding,” Portillo said. “But I think we can do better when we have a little bit more time to gather all of the stakeholders together, really talk about how we can use these funds strategically.”