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HomeMy WebLinkAboutItem 3City of Lakeville Finance Department Memorandum To: Mayor and City Council From: Jerilyn Erickson, Finance Director Copy: Justin Miller, City Administrator Date: September 28, 2020 Subject: CARES Act Funding Update The Coronavirus Aid, Relief, and Economic Security (CARES) Act established the $150 billion Coronavirus Relief Fund to provide funds to State, Local and Tribal governments navigating the impact of the COVID-19 outbreak. The City of Lakeville was allocated $4,846,940. Staff submitted the required certification form and funds were received on July 3, 2020. Update on November 15, 2020 Deadline for Cities to spend CRF Funds MMB recently informed Metro Cities that it is authorized to use the following language regarding exceptions to the November 15th deadline, that requires cities to return any amount unexpended by November 15, 2020 to their home county, or for cities in Hennepin County to the Hennepin County Medical Center or another hospital in the county’s boundaries and for cities in Ramsey County, to Regions Hospital or another hospital in the county’s boundaries. There are now two exceptions to this rule: • CRF eligible payroll expenses incurred through November 15 (for cities/towns) and December 1 (for counties) are allowed, even if not paid until after November 15/December 1. • Eligible items ordered for delivery prior to November 15 (for cities/towns) and December 1 (for counties) that have not yet been received due to supply chain disruption are allowed, even if not paid until after November 15/December 1. Federal guidance recognizes this possibility by stating that “In recognition of the likelihood of supply chain disruptions and increased demand for certain goods and services during the COVID-19 public health emergency, if a recipient enters into a contract requiring the delivery of goods or performance of services by (the end of the covered period), the failure of a vendor to complete delivery or services by (the end of the covered period), will not affect the ability of the recipient to use payments from the Fund to cover the cost of such goods or services if the delay is due to circumstances beyond the recipient’s control. Federal guidance suggests it is generally expected payments will take place within 90 days of a cost being incurred. Eligible Expenses Current guidance states that expenses must satisfy three distinct elements: 1) Necessary expenditures incurred due to the public health emergency with respect to COVID-19. An expenditure is reasonably necessary for its intended use in the reasonable judgment of the government officials responsible for spending Coronavirus Relief Fund payments. Expenditures must be used for actions taken to respond to the public health emergency, including expenditures incurred to respond directly to the emergency, as well as expenditures incurred to respond to second order effects, such as by providing economic support to those suffering from employment or business interruptions due to COVID-19-related business closures. 2) Costs not accounted for in the city’s budget most recently approved as of March 27, 2020. 3) Performance or delivery must occur during the covered period, but payment of funds need not be made during that time (though it is generally expected that this will take place within 90 days of a cost being incurred). For cities, the covered period is March 1, 2020, to Nov. 15, 2020. Cities must spend funds by November 15, 2020 (see two exceptions). Ineligible Use of Funds Loss of revenues are NOT an eligible use of the funds. Update on Expense Eligibility One area that staff has previously had low confidence of eligibility has been the general assumption that ALL public safety expenses are eligible for CARES Act funding. Previous guidance noted that “in recognition of the particular importance of public health and public safety workers to State, local, and tribal government responses to the public health emergency, Treasury has provided, as an administrative accommodation, that a State, local, or tribal government may presume that public health and public safety employees meet the substantially dedicated test, unless the chief executive (or equivalent) of the relevant government determines that specific circumstances indicate otherwise.” “In response to questions regarding which employees are within the scope of this accommodation, Treasury is supplementing this guidance to clarify public safety employees would include police officers (including state police officers), sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and detention officers, and those who directly support such employees such as dispatchers and supervisory personnel.” On September 21, 2020, the Department of the Treasury Office of Inspector General distributed updated guidance and clarity regarding the use of CARES Funds and requirements for documentation, specifically relating to public safety expenses. With this new guidance, staff has moved all public safety expenses into Category 1. “Will a government have to demonstrate/substantiate that a public health or public safety employee's function/duties were in fact substantially dedicated to mitigating the emergency? No, the government will not have to demonstrate/substantiate that a public health or public safety employee’s function/duties were substantially dedicated to mitigating the emergency but must maintain records and documentation supporting payroll amounts reimbursed using CRF proceeds. As indicated in Treasury’s Guidance, as an administrative accommodation, governments may presume that public health and public safety employees meet the substantially dedicated test, unless the chief executive (or equivalent) of the relevant government determines that specific circumstances indicate otherwise. Treasury’s FAQs add that entire payroll cost of an employee whose time is substantially dedicated to mitigating or responding to the COVID-19 public health emergency is eligible, provided that such payroll costs are incurred by December 30, 2020.” “For payroll that was accounted for in the FY2020 budget but was then "presumed" to be substantially dedicated to mitigating the emergency, will the government have to demonstrate/substantiate that a public health or public safety employee's function was a substantially different use? No, the government will not have to demonstrate/substantiate that a budgeted public health or public safety employee’s function was a substantially different use. As stated in Treasury’s Guidance, within the category of substantially different uses, Treasury has included payroll and benefits expenses for public safety, public health, health care, human services, and similar employees whose services are substantially dedicated to mitigating or responding to the COVID19 public health emergency. The Treasury OIG does require the government to maintain budgetary records to support the fiscal years 2019 and 2020 budgets.” Current Status of Funds The following charts show the current estimated amounts of expenses in three categories of confidence that the expenses would qualify: Category 1: High confidence of eligibility Spent Obligated through after Description 9/30/2020 9/30/2020 Total Public Health Expenses (Personal protective equipment (PPE), plexiglass barriers, etc.) $ 84,587 $ - $ 84,587 Small Business Grants 396,544 488,150 884,694 Administration costs for SBG 7,600 2,400 10,000 Hardware/software to allow “work-from- home” capabilities 10,156 22,000 32,156 Unemployment expenses 248 29,942 30,190 Other – portable restrooms (city parks), election postage, election judges 29,262 10,713 39,975 Staff paid during COVID-19 illness or quarantine 51,847 - 51,847 Payout of Police (union) vacation/PTO *estimate - 28,368 28,368 COVID-19 Testing 1,416 - 1,416 Administrative expenses – to administer COVID policies and reporting 51,391 - 51,391 Budgeted personnel and services diverted to a substantially different use (non- public safety) 143,295 20,000 163,295 ALL public safety expenses from March 01-November 15, 2020 - POLICE 3,873,585 1,300,000 5,173,585 ALL public safety expenses from March 01-November 15, 2020 - FIRE 545,798 155,000 700,798 Totals $ 5,195,729 $ 2,056,573 $ 7,252,302 Category 2: Medium confidence of eligibility - NONE Category 3: Low confidence of eligibility - NONE Category Total Spent/Obligated Grant Remaining CARES Act Grant $4,846,940 Category 1: High confidence $7,252,302 $0 Category 2: Medium confidence $0 $0 Category 3: Low confidence $0 $0 The City approved an agreement on August 17, 2020 with Dakota County regarding use of the 2020 CARES Act Grant for 2020 federal election funding in the amount of $24,826.21. The resolution approving the agreement was amended and restated on September 21, 2020. Additional Considerations for Use of CARES Act Funds Requests have been received by the following entities for financial assistance: • Lakeville Chamber of Commerce o Requested $55,000 o Council verbally committed $92,000 o Dakota County will contribute $10,000 (will reduce City’s grant) • Lakeville Convention & Visitor’s Bureau o Requested $51,000 o Council verbally committed $51,000 o Dakota County will (possibly) contribute $10,000 as well. It is still unknown if both the Chamber and CVB will be eligible. • Fairview Hospital o Requested $105,911 o Additional information requested to support request • 360 Communities o Requested $50,000 • Lakeville Area Schools o See attached memo An additional area of consideration includes: • Lakeville Arenas – incurred $9,735 of direct and $6,712 of indirect expenses Small Business Grants The City Council approved funding for the Small Business Grant program as follows: 07/06/2020 SBG – Round 1 $484,694 08/31/2020 SBG – Round 1 Expansion $100,000 09/08/2020 SBG – Round 2 $300,000 Total $884,694 Forty-one (41) businesses have received up to $10,000 as part of the Small Business Grant program. Total expended $396,544.50. A current list of grant recipients is attached to this memo. Council Direction Staff is seeking general feedback from the Council on the CARES Act funding. Attachments: Small Business Grant Recipients Lakeville Area Schools Memo CITY OF LAKEVILLE SMALL BUSINESS GRANT RECIPIENTS - CARES ACT FUNDING AS OF 09/25/2020 Business Name Grant Amount The LeVon Group $10,000 Raberge's Leadership Martial Arts $10,000 Advanced Family Eyecare $10,000 Program Total 484,694.00 Fancy Paws Pet Salon $10,000 Grant Agreements Total 396,544.50 Minnesota School of Beauty, LLC $9,993.39 Remaining Grant Funds 88,149.50 Exuberance Chiropractic & Wellness Center $10,000 South Metro Dance Academy $10,000 Wear Out The Net, Inc $10,000 Dream Nails $10,000 Heidi Nails $10,000 Snap Fitness - Lakeville $10,000 Anytime Fitness Lakeville $9,703.38 Miller Comfort Dental of Lakeville, LLC $10,000 Threads & Inks, Incorporated $10,000 Wise Swim School $10,000 Parlour 9 Salon & Spa, LLC $10,000 Hand and Aroma Massage $10,000 Platt Dentistry, P.A.$10,000 Waffle Bar $10,000 BeeHive Homes of Lakeville $10,000 Quality Inn Lakeville $10,000 Sandy's Family Childcare $5,740 Erbert & Gerbert's Lakeville $10,000 Holly's Dance & Mentorship $10,000 DanceWorks $10,000 Tammy Marie Downs $5,700 Escape MSP $10,000 Pete Peterson State Farm $8,046 Ballet Royale Minnesota $10,000 Flora Etc $10,000 Enlighten Chiropractic $10,000 JAMES F. LESCH DDS PA $10,000 Plaza Dental PA $10,000 Livvy Nails Spa Inc $10,000 Princess Jewelry $10,000 THE BUCKBOARD $10,000 NETWORK LOGISTICS MANAGEMENT $10,000 Board & Batten LLC $10,000 Lake Marion Chiropractic Center P.A.7,361.73 Puppy Play and Stay, LLC $10,000 Angry Inch Brewing $10,000 Payments processing 9/25 or 9/28 Sent grant agreements on 9/25 Lakeville Area Schools 17630 Juniper Path, Suite A Lakeville, MN 55044 Ph: 952-232-2000 To: Lakeville City Council Members From: Bill Holmgren, Executive Director of Business Services Subject: CARES Act – ISP support Date: September 16, 2020 Due to the current ongoing pandemic, Lakeville Area School students and staff need to participate in online learning, also known as “distance learning.” Approximately 1.3% our students and staff do not have access to an ISP service here in Lakeville. Currently students and staff in this situation have requested ISP support to accomplish their learning. It is our mission, in partnership with our community, to help every student be successful and we do not want our families to struggle to get their basic educational needs met—in the times of COVID-19 pandemic, internet service is considered a basic educational need. Lakeville Area Schools District 194 is requesting support from the city of Lakeville to help defray these costs for our students and staff. The liability the district has in regards to this ISP support is budgeted at $50,880. These dollars are being specifically spent on monthly ISP service for these students and staff without service between the time period of March 1st and November 15th, 2020. Any support the city can offer will be greatly appreciated. The District appreciates the partnership we have had with the city in the past and look forward to serving our community together. Thank you for considering this funding request.