A few weeks ago, Community Solutions wrote about the county’s proposed plan to spend $100 million in CARES Act funds, as well as that the county still had some undesignated dollars remaining. The Budish administration proposed the county take advantage of some new guidance issued by the Treasury Department, which permitted CARES Act dollars to be spent on payroll and personnel expenses of “public safety” agencies. According to the county, this carried a double advantage, freeing up previously budgeted general fund dollars and send that money back into the county budget. It also allowed the county to get the federal dollars out the door before the December 31 deadline. Otherwise, the county would have to give the money back to the federal government. The Budish administration’s intent was to submit the proposal to Cuyahoga County Council and gain its approval to spend all of the remaining CARES Act dollars (approximately $125 million) at its October 27 meeting. That did not occur. Rather, Council decided that the proposal on how to spend the balance of the CARES Act dollars needed its own committee hearing. which happened at the November 9 Cuyahoga County Council meeting, chaired by Finance Committee Chairman Dale Miller.
By “overspending” the CARES Act allotment, the county can ensure that if any other additional projects come in under budget, there is a high chance the county will not have to give those remaining funds back to the federal government at the end of the year.
In that hearing, Catherine Tkachyk, Cuyahoga County Chief Innovation and Performance Officer, explained the county wants to use CARES Act dollars for Sheriff’s Department personnel costs, Juvenile Court, and the county jail. He also said the county also wanted to give to other nonprofit agencies that incurred expenses as a result of COVID-19 such as the Cleveland Rape Crisis Center, YWCA, Legal Aid and Ohio Guidestone. General fund dollars originally budgeted for public agencies such as the Sheriff’s Department and Juvenile Court would then not be spent from the general fund, but would rather be folded back into the county budget and carried over into the next year. The county is assuming that the expenditures by these agencies are directly related to COVID-19, and therefore eligible to be paid for by the CARES Act. According to the county, this isn’t necessarily revenue replacement, but rather expenditure replacement. This is an important distinction, because the county wanted to ensure that it does not run counter to September 2 Treasury Department guidance language which says:
Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is not a permissible use of Fund payments.
An updated version of the spreadsheet, including a list of nonprofits that received some CARES Act dollars, is included in the link below. The county spreadsheet shows a balance of more than $215 million because there were some projects that were approved by council, such as building modifications, where the county did not use all of the money allocated for the project. By “overspending” the CARES Act allotment, the county can ensure that if any other additional projects come in under budget, there is a high chance the county will not have to give those remaining funds back to the federal government at the end of the year.