4.a COVID Expenditure Staff Report
Staff Report
Date of Meeting: November 4, 2020
To: City Council
From: Colleen Firkus
Re: CARES Act Expenditures for Approval
Background: On June 25, 2020, Gov. Tim Walz used executive powers to distribute $841.5 million of
CARES Act funds to counties, cities, and townships over 200. Cities and townships under 200 population
are allowed to seek reimbursement for any eligible costs—up to a maximum per capita amount—from
their home county. Necessary expenditures incurred due to the public health emergency. The
requirement that expenditures be incurred “due to” the public health emergency means that
expenditures must be used for actions taken to respond to the public health emergency. These may
include expenditures incurred to allow the State, territorial, local, or Tribal government to respond
directly to the emergency, such as by addressing medical or public health needs, as well as expenditures
incurred to respond to second-order effects of the emergency, such as by providing economic support
to those suffering from employment or business interruptions due to COVID-19-related business
closures. 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. The statute also specifies that expenditures
using Fund payments must be “necessary.” The Department of the Treasury understands this term
broadly to mean that the expenditure is reasonably necessary for its intended use in the reasonable
judgment of the government officials responsible for spending Fund payments.
The Guidance says that funding can be used to meet payroll expenses for public safety, public health,
health care, human services, and similar employees whose services are substantially dedicated to
mitigating or responding to the COVID-19 public health emergency. How does a government determine
whether payroll expenses for a given employee satisfy the “substantially dedicated” condition? The
Fund is designed to provide ready funding to address unforeseen financial needs and risks created by
the COVID-19 public health emergency. For this reason, and as a matter of administrative convenience
in light of the emergency nature of this program, a State, territorial, local, or Tribal government may
presume that payroll costs for public health and public safety employees are payments for services
substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the
chief executive (or equivalent) of the relevant government determines that specific circumstances
indicate otherwise.
Proposal Details: Attached is a spreadsheet with documented, unbudgeted expenditures that
meet the guidelines for CARES Act reimbursement. The requirements have been interpreted to
presume that payroll costs for public safety employees are substantially dedicated to
responding to the COVID-19 public health emergency and the only documentation required are
the number of hours worked by such employees. This means that all the contract deputy’s
hours, not including other expenses in the contract, as well as the Fire Chief and Firefighters
hours worked from March 1, 2020 to November 15, 2020, may be submitted for
reimbursement. Those calculations are not complete but an estimated has been provided.
Fiscal Impact: Total expenses incurred to be reimbursed to date are $229,644.12. Estimated
wages for the Deputy, Fire Chief and Firefighters would be an additional $162,035. Unused
CARES Act funds must be returned to Washington County by November 20, 2020.
Recommendation: Approve expenditures to date, and expenditures anticipated by November
15, 2020.