One of the largest questions around cities’ use of federal coronavirus relief funds has been in determining whether public safety payroll can be considered eligible costs for reimbursement through the Coronavirus Aid, Relief and Economic Security (CARES) Act as much seems to hang on the phrase “substantially dedicated.”
Guidance from the U.S. Treasury, updated Sept. 2, specifically lists as eligible payroll expenses for public safety employees “whose services are substantially dedicated to mitigating or responding to the COVID19 public health emergency”—but does not define in duties or overtime hours or any other more specific measure what is meant by “substantially dedicated.”
City attorney for Minnetrista, Ron Beatty, in a written analysis to city officials Sept. 3, determined that “The Treasury Department’s guidance, for administrative ease and due to the emergency nature of the CARES Act, has established that public safety services are presumed to be substantially dedicated to mitigating or responding to COVID-19 and are therefore eligible.”
Beatty had previously, during an Aug. 3 council session, elicited this view, saying that “The regulations do talk about [how] the costs that can be reimbursed are those related to COVID, but the big exception is with regard to public health and safety costs. [...] The reg[ulation]s talk about there being a presumption that those costs are related to COVID and in fact that it’s the full cost.” Beatty further reiterated that point two weeks later, during council’s Aug. 17 session.
That view seemed to gain ground with other staff. Michael Barone, Minnetrista city administrator, commented Aug. 17 that “Council did their jobs to fund our budget last year and the fact that the determining date that they’re using is March I don’t think precludes us from using that money towards our public safety area because no city would be able to use that money toward public safety.”
But the topic has caused a stir at both these council sessions as officials tried to determine whether all of the city’s $579,000 allocation through the CARES Act could be put toward its public safety budget and in so doing, free up city money for other use. Public safety in Minnetrista, as in numerous smaller cities, often accounts for a good portion of the local budget every year.
Council member Shannon Bruce took issue with that analysis, saying Aug. 17 that “The city’s costs were not for substantially different use from the expected use of these [CARES] funds” and that while a presumption may exist, that presumption was not applicable to Minnetrista. “This money was intended for COVID-related purposes, not to just pay off our payroll, our public safety payroll, and I think it’s dishonest just to try and figure out a way just to keep this money.”
In his follow-up analysis Sept. 3, Beatty brought back to council that both the League of Minnesota Cities and Minnesota Management and Budget “provided in a webinar that each city is impacted by COVID-19 differently and a council should take that into consideration when determining how to use CARES Act funds.”
“The determination of whether the costs are necessary is left to the city council as the authority responsible for determining how CARES Act funds are to be spent. If the city council determines that the city should use its CARES Act distribution to cover public safety costs, it should document the reasons for doing so in light of the above-mentioned presumption, and be comfortable that there are not specific circumstances indicating that the expenses being covered are not substantially dedicated to mitigating the impacts of COVID-19,” Beatty wrote.
Minnetrista Police Chief Paul Falls had said Aug. 17 during the council session that he was still determining “to what extent” department personnel have been affected by the pandemic but that “Staff is all being very cautious about this. Nobody wants to spend money that we don’t deserve or that is for the wrong purpose.”
Minnetrista city council had scheduled further discussion of its CARES allocation for its Sept. 8 meeting. That meeting occurred after Laker Pioneer went to press.