More than two months after Florida received the money, Gov. Ron DeSantis announced Wednesday that the state will start to release nearly $1.3 billion in federal funds to cash-strapped counties struggling amid a recession caused by the COVID-19 pandemic.
The U.S. Department of the Treasury in March dispersed $2.47 billion directly to 12 Florida counties with populations greater than 500,000 — Brevard, Broward, Duval, Hillsborough, Lee, Miami-Dade, Palm Beach, Pasco, Pinellas, Polk, Orange and Volusia — as part of a stimulus law known as the Coronavirus Aid, Relief and Economic Security, or CARES, Act.
But the state also received $1.275 million for other local governments, including $6.6 million for Flagler and its cities. County and city officials for weeks have urged DeSantis to release the money. The local officials want to use the funds to jumpstart flagging economies socked by massive shutdowns aimed at preventing the spread of the virus. (See the proposed distribution between counties here.)
Under the “phased approach” announced by the governor Wednesday, the Florida Division of Emergency Management will provide “an initial disbursement” of 25 percent of each county’s allocation. Counties also will be responsible for steering money to cities.
It isn’t clear how the money is to be dispersed to the cities. The federal formula to the states is based on population. If the formula holds, then a substantial portion of Flagler’s money would be channeled to Palm Coast. Local governments have begun developing their 2021 budgets, a fiscal year that begins Sept. 1.
“The county should provide money to the municipalities, and there’s some formula which I’m unclear of at this point,” Palm Coast City Manager Matt Morton said, noting a preliminary estimate that has Palm Coast in line for 25 to 50 percent of the allocation, or $1.5 to $3 million. He said Jerry Cameron, the county administrator, called him immediately after the governor’s office issued its announcement about the funds. “His first thought apparently was to call us and say hey, let’s get together, let’s figure out how this works, we want to be partners,” Morton said. So the distribution to the cities is not expected to be contentious.
But other questions abound, including what sort of strings may be attached to the money. Morton said it is possible that the money may only be spent on Covid-related expenses–spending the local governments incurred as they battled through the emergency. But that’s not certain. “There’s a lot of details we’re trying to gather and I don’t have all the facts,” he said.
What is certain, Morton said, is that he is not reversing course on the austerity measures he has taken within Palm Coast government so far. “I don’t plan any changes on the freezes and the things that we have in place,” said Morton, who last week turned down a $7,000 raise. The decision to close the city’s pool, formerly known as Frieda Zamba, will also not be reversed. That decision saved the city between $400,000 and $500,000 in its general fund.
“Any funds at this point are going to be extraordinarily helpful, relieving pressure, filling the gaps,” Morton said. He expects to have all the numbers in place by the time the council has its first look at the proposed general fund budget for next year, later this month.
County Commission Chairman Dave Sullivan spoke minutes before he was to join a Zoom meeting with the Florida Small Counties Coalition, where many questions were to be answered. “It’s for anything that you can tie back into Covid, not just debt relief,” Sullivan said. “We can’t just dump it in reserves or something like that. It has to be Covid-19 related since March 1.” Sullivan cautioned: “It’s not going to solve all our problems, it will help.”
“I’m proud that today, we are able to provide funding back to these counties, so that they can really begin their recovery from this virus. We thank President Trump and our federal partners for providing this relief to Florida,” DeSantis, a close ally of Trump, said in a statement. In fact, the package is the result of legislation by the Democratic-controlled House and Republican-controlled Senate–the so-called coronavirus Aid, Relief and Economic Security Act, known as CARES–who negotiated the bi-partisan deal with little involvement by Trump.
Counties recently amped up pressure on DeSantis to distribute the money, but administration officials had been concerned about ensuring local officials would use it properly, worrying that the state would be on the hook if counties or cities misspent the stimulus funds.
“The rural areas of Florida have been waiting for over two months to begin addressing the economic needs faced by their local businesses. We are pleased that the funding is being released,” lobbyist Chris Doolin, who represents the Small County Coalition, told The News Service of Florida on Wednesday.
To receive the money, counties will have to sign funding agreements with the emergency-management agency promising to use the funds on “eligible expenditures as defined by the CARES Act” and related guidance by the Treasury Department, according to a news release from the governor’s office.
Counties also will have to agree to repay the state any portion of the money “that is unused, or is not utilized in accordance with the CARES Act stipulations,” the release said.
And counties will have to submit quarterly reports to the Division of Emergency Management detailing how the money was spent, along with projections of eligible expenditures.
Counties can also submit requests to the agency “for additional funds in excess of their 25 percent initial disbursement on a reimbursement basis” for eligible expenditures.
“All counties, including counties that already received direct payment from the U.S. Department of the Treasury, should provide funds to municipalities located within their jurisdiction on a reimbursement basis for expenditures eligible under the CARES Act and related guidance,” the news release said.
In a prepared statement issued following DeSantis’ announcement, the Florida League of Cities said it wanted to draw attention to the governor’s “stated intent that cities receive the funding they need.” The cities said they wanted to get the money directly, instead of through counties, “to eliminate an unnecessary layer of bureaucracy.”
Doolin also expressed concern that the 12 largest counties were able to draw down all of their money in March, while DeSantis initially is doling out a quarter of the federal funds to the remaining counties.
“We hope that this does not hinder the pace at which we are able to respond to our economic needs in our rural communities,” he said.
Meanwhile, Palm Beach County Commissioner Melissa McKinlay, the president of the Florida Association of Counties, praised the release of the funds.
“By putting these dollars directly into our communities, the governor is ensuring our local economies, and thereby Florida’s citizens, can quickly rebound and thrive moving forward,” McKinlay told the News Service in a text message.
Following the passage of the CARES Act, the Treasury Department issued several sets of guidelines to help state and local officials figure out how the funds could be spent and distributed.
The federal law allows state and local governments to make payments for programs that “are necessary expenditures incurred” because of the public health emergency, “were not accounted for in the budget most recently approved as of the date of the enactment” of the act on March 27 and were incurred between March 1 and December 30, 2020.
Guidelines issued by the Treasury Department on April 22 also said the money could be used for “second-order effects” of the pandemic, “such as by providing economic support to those suffering from employment or business interruptions due to COVID-19-related business closures.”
Okeechobee County Commissioner Terry Burroughs said last week his community wants to use the funds to issue $5,000 to $10,000 grants to local businesses that have suffered financial losses after being shuttered for more than two months. Such a program would mirror grants offered by some large counties that received the stimulus money directly from the federal government, Burroughs said.
“Our biggest issue is trying to get our businesses up and running,” Burroughs said in a telephone interview.
–FlaglerLive and News Service of Florida