Half a million dollars that Minnetrista received in federal coronavirus relief money will go toward paying a portion of its public safety payroll.
The 4-1 decision made Oct. 19 followed a heated multi-session back-and-forth about how the city should spend that money, which it received in July through the Coronavirus Aid Relief and Economic Security (CARES) Act.
Minnetrista received $579,517 in CARES money and has to date spent about $20,250 for clear-cut costs like PPE, sanitation and telework solutions. The city expects to spend another $15,000 in this area before the end of the year and has reserved two outlays of up to $20,000 each for grants to non-profits.
That leaves a little over $504,000 that will now be directed to the city’s police department—but not everyone was in agreement when the time came to make the call.
“Over the five months that we’ve been given we could have spent these funds on a number of other legitimate things that could have helped our community—helped our community work remotely, helped our schools, given funds to businesses or individuals impacted—but instead we decided to kick the can down the road until no other choices were feasible except this,” said council member Shannon Bruce, who provided the sole dissent Oct. 19.
The city has until Nov. 15 to submit a final report to Minnesota Management and Budget on its use of the relief money; any remaining funds at that time would rollover to Hennepin County.
Discussion on how to use the money had taken place during at least four council sessions dating back to early August. Apart from payroll, grants to nonprofits and what staff has termed the “low hanging fruit” (including PPE, sanitation and telework costs), the city had also looked into whether the funds could be used for broadband expansion, water rebates or as an allocation to the schools.
Time constraints on the expenditure of funds made broadband too much of a stretch while U.S. Treasury guidelines around use of CARES money ended the discussion on the water rebates. As for the schools, CARES assistance had already come to Westonka school district from both Mound and Orono late last month, and some with Minnetrista expressed a waryness to give more, uncertain that the funds could be fully documented as covering only COVID-related costs.
Bruce has throughout the process been a voice of opposition to putting Minnetrista’s CARES money toward payroll at the city’s public safety department, questioning whether its employees’ roles had changed enough from pre-pandemic times to warrant using the bulk of its CARES allocation in this way, saying at one point during Monday’s session that legality does not necessarily equate with honesty.
“I see nothing wrong with this,” countered council member John Tschumperlin, just before the vote. “It has been beaten to death with a shovel: it is not dishonest.”
“I trust their conclusion that this is legal and within the guidelines that have been stated,” added council member Pam Mortenson.
Minnetrista’s legal advisor, Ron Batty, had been tasked with reviewing a trove of continually updated information from the U.S. Treasury, including another FAQ released late in September that clarified record keeping and audit practices when using the funds toward public safety payroll, including specifically payroll budgeted for prior to the coronavius pandemic. That FAQ further allowed that no burden of proof would fall on local governments that chose to expend CARES dollars in this way.
According to that Treasury update, published Sept. 21, “the government will not have to demonstrate/substantiate that a budgeted public health or public safety employee’s function was a substantially different use” from that accounted for in the recent budget, reasoning that “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.”
“It applies to all public safety employees as a matter of administrative convenience,” noted Joe Sathe.
Sathe, an attorney with Kennedy & Graven, has been working alongside Batty in sorting through the literature around use of CARES funds and had joined Minnetrista offiicals for the Sept. 21 meeting. “They created this presumption so that these employees who are responding to the public health emergency don’t have to then take additional time to do that specific documentation.”
Now will Minnetrista’s use of the funds be subject to an audit at the state level. Only those governments that received more than $750,000 in relief money are subject to such an audit, a stipulation made in June when Gov. Tim Walz released the $841 million of Minnesota’s CARES allocation to the state’s local governments.
Minnetrista has spent in total just under $822,000 on public safety payroll for the pay periods covering March through Sept. 3, according to information compiled ahead of the Sept. 21 council session. The city estimates that by the mid-November deadline about $1.17 million will have gone toward payroll in public safety.
Minnetrista Police Chief Paul Falls determined that up to $758,000 of that total would be eligible for reimbursement through CARES after he identified 10 of 17 employees in his department whose roles he said met the criterion of “substantially dedicated” to combatting COVID-19.
Among the added burden placed on those 10 employees Falls had listed in a memorandum included at the Sept. 21 session daily and weekly meetings with emergency management and health officials; updating response plans in accordance with CDC guidelines; implementing new procedures for disinfecting uniforms, squad cars and the building in accordance with CDC guidelines and engaging in medical training for COVID-19 as well as legal training in the enforcement of state emergency orders.
“I was expecting at least the number of hours to be quantified somehow and documented and substantiated, but this is just a laundry list of activities without any reference at all to show how much time, even approximately, that each activity took,” council member Bruce had commented.
That frustration came back Oct. 19 as she cast her vote against the city’s decision. “I’m extremely disappointed that we couldn’t do better for our community and for those in it that were actually impacted by COVID and resulting restrictions that followed from it.”
But as others saw it, the use of CARES money on police payroll will have a waterfall effect. Said Mayor Lisa Whalen, “If we reimburse our police the $500,000, that does give us the ability to do other things with excess funds in our budget for our community.”