The money can only be spent on expenses accumulated in dealing with the pandemic this year, and any unspent money must be returned to the state where it will be funneled back to the federal government.
Another wrinkle is the jurisdictions outside the county itself must turn back excess funds to the county on Oct. 15, and the county commissioners will redistribute the funds “based on need,” according to County Auditor Roger Reynolds.
The distributions were based on the local government fund formula. State Sen. Bill Coley, R-Liberty Twp., said the state legislature wanted to get the money into the local government officials’ hands quickly, but it makes more sense for the county, rather than the state, to determine which jurisdiction has the most need now.
“The idea was you try to get it to the local level as quickly as possible and that’s what we did,” Coley said. “But then leave it at the more local level than Columbus. So if West Chester Twp. doesn’t need their full allotment but we need more in Hamilton, well great, then we’ve got more money right here in Butler County to just move between one community to another to cover those costs.”
Last month the state legislature passed the $350 million coronavirus relief bill and the funds have been distributed to local jurisdictions.
When the federal government approved the $2 trillion CARES Act in late March, local governments were largely left out of the relief funding. In Ohio, only governments with populations higher than 500,000 — Cuyahoga, Franklin, Hamilton, Montgomery and Summit counties and the city of Columbus — were eligible. Butler County has about 400,000 residents.
The caveat that the funding can only be used for direct expenses, not to replenish sagging revenues that have been impacted by the economic shutdown, might be erased soon. U.S. Rep. Warren Davidson, R-Troy, introduced a bill that would relax restrictions and allow governments to use the federal funds to replace lost revenues. The legislation is too small as a standalone bill so it will likely be included in future stimulus packages that might develop in August.
The biggest CARES-eligible expenses in some of the jurisdictions are for gift cards the cities purchased to help out businesses during the stay-at-home mandate early on in the crisis. Hamilton spent $300,000 and Oxford $200,000.
Hamilton Finance Director Dave Jones said so far the city has spent around $409,676 dealing with the pandemic and he expects the city will use the full allotment of cash.
“The city of Hamilton does not foresee having to give any of the money back,” Jones said. “The funds are available for qualifying expenditures between March 1 and Dec. 30, so it is difficult to project all of the allowable expenditures that may occur during the remainder of the year.”
The county is anticipating a $20 million revenue loss due to the coronavirus and Hamilton came in second when the Journal-News polled the various jurisdictions. Jones said he anticipates “spending down” $3 million of the general fund cash balance to cover lost revenues.
Oxford had the second highest expense because of the gift card program. Finance Director Joe Newlin said he was pleasantly surprised when he learned the CARES money might cover the gift card expense. He is still tabulating expenses. The city was awarded $428,864 in coronavirus relief. He is projecting a $1.2 million revenue loss.
“The $200,000 appears to be an eligible expense for the CARES funds and the city will verify this fact before reimbursement. Also all the costs the city incurred to provide support of employees working from home are eligible expenses,” Newlin said. “This is still a very fluid situation and various groups are providing guidance as to the proper use of the CARES funds.”
West Chester Twp. received the second highest amount of CARES funding with $1.16 million. The township has incurred $47,034 on supplies and other COVID-19 related expenses. Assistant Administrator Lisa Brown said it is hard to tell at this juncture whether the entire allocation will be needed.
“We’re unsure at this time,” she said. “We’re still in the process of calculating the personnel costs and other expenditures that may qualify for those funds.”
Townships cannot collect income tax so they rely heavily on property taxes. Barb Wilson, the director of Public Information & Engagement, said the township is not anticipating a drop in property values since the mandated property reassessment raised values. While all of the township’s revenue streams will likely be affected by the pandemic, hotel taxes have dropped drastically. The average monthly collection last year in May was $101,642, this year it fell to $17,570. The total revenue drop estimate from various funds is $820,000 to $1.6 million in hotel, Local Government Fund, interest and gas tax.
The city of Middletown culled $922,988 in funding and has expended about $97,000 according to Finance Director Jake Burton.
“As we take a look at our operations and safety needs related to COVID-19 over the next several months, we will have a better idea of what our total costs will be between now and the end of the year and therefore how much, if any, of the funding we will need to return,” Burton said.
He is estimating a 14% revenue loss in income taxes.
The allotment for Fairfield is $853,072 and the city has spent $74,887 on various items related to the virus, according to Assistant City Manager Dan Wendt.
“Examples of these expenditures include personal protective equipment, hand sanitizer, screens for protecting employees and the public, supplies for disinfecting equipment and work spaces, and technology that was implemented to allow some groups of employees to work remotely,” he said.
The expenses could go higher and be reimbursed if the staff catch the disease and overtime is required to cover duties or employees need to take leave to care for family.
Liberty Twp. has only incurred about $15,000 in COVID-19 expenses and received $719,769. The township does receive a small amount of income tax from its Joint Economic Development District but spokeswoman Caroline McKinney said the township is still working on hard estimates.
“We are still monitoring revenue and anticipate seeing a reduction in state funds and a small dip in JEDD revenue,” she said. “We are starting the budget process and will look at the first 6 months of 2020 to give us insight into what we may expect for the second half 2020.”
Trenton Finance Director Mike Engel said the city is estimating a $188,450 revenue shortfall for the year but expenses keep mounting and are hard to quantify as to whether a refund of the money will be required.
“Current accumulated costs would not add up to the $238K allocated to the City of Trenton. That is evolving daily, however, so it would be too early to make predictions right now,” he said.
“We are hopeful that Congressman Davidson is successful in his efforts to have revenue shortfalls included as allowable items. Loss of revenue is where we foresee the largest shortfalls.”
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