Richmond County is expecting to receive $787,222 in coronavirus relief funds around June 1. The allocations were announced Tuesday, May 12, only days before the board of supervisors meeting, so no decisions had been made about what to do with the money.
But it’s a good problem to have, said Richmond County administrator Morgan Quicke.
The funding is from the Coronavirus Relief Fund, a portion of the CARES Act that’s designed to support state and local governments.
The federal government sent the money to the state and Virginia is passing along each county’s share. Then, the counties have to break bread with the towns, meaning Warsaw is set to get a portion of Richmond County’s allocation. And just as the state must oversee county use, the county will be responsible for overseeing town use.
Deciding the county/town split
The federal government gave the state broad latitude on how to spend the money, and likewise, Virginia is being equally liberal with its management of county use.
The allocation document from Virginia’s secretary of finance, Aubrey Layne, calls for towns to get an equitable share, but there are no rules or guidance that defines what that means, said Quicke.
And calls he’s had with Virginia Association of Counties and Layne’s office, he concluded that it’s a county decision, giving Richmond County full reign to decide how much money to pass to Warsaw.
Quicke told the board that the total sum of CRF funds was based on the county’s population, which works out to about $87 per person. If the county was to use that formula, Warsaw would get about $130,000.
“I don’t think the town should receive all of that money because town residents are also the county residents. They use our emergency medical services, fire departments, dispatch, courts, department of social services and so forth,” Quicke told the board of supervisors.
“I think it’s likely Warsaw will get in the $75,000 - $100,000 range,” he said the day after the meeting.
Proceeding with a plan
“Before, members of the board could get too enchanted by dollar signs,” Quicke explained some of the program rules.
The money can only be used for direct costs associated with the response to the pandemic. Each local government is responsible for keeping records of their spending that could be supplied during an audit. The county could be on the hook for portions of the money that are misused, and the funds will be available until December 30. After that date, any COVID-19 expenses must be paid entirely by the locality from local funds and the unused CRF funds may be reclaimed.
As it stands, CRF funds cannot be used for budget shortfalls, but there are efforts in Washington to change that. If those are successful, the county may be able to put a portion of the money into the bank to help balance the budget over the next several years.
“So given that the county may be able to hold onto a portion of this money, it would be premature to start trying to figure out how to spend it all right now,” Quicke told the board.
He advised proceeding with a detailed plan that concentrates spending on three main areas. For starters, the county could use a portion of the money to replenish the local funds spent for coronavirus expenses ranging from EMS costs to staff time the Department of Social Services puts in for COVID-19 efforts.
According to the guidance, governments can keep the assets they buy if the purchases meet the eligibility guidelines. So, Quicke said another major focus should be buying items that can continue to serve the county, like more EMS radios.
“I think this gives us the opportunity to buy things that benefit us through COVID-19 but also years down the road,” he said.
The other main area, Quicke said, should be releasing a good portion of the funds to the business community.
A game changer for small business aid
Quicke expected to finalize the proposed Disaster Impact Loan program at the board of supervisors meeting. Under that initiative, Richmond County was going to allot $50,000 to provide small businesses with interest-free loans up to $5,000.
Now, instead of loans, “we have the ability to put more money out and put into a grant program that wouldn’t have to be paid back,” said Quicke. “I think we’re going to be able to put out a much better program with much more money in it and make a much bigger impact for the county’s businesses.”
Combined business aid—required or desired?
After hearing the idea of converting the loan program to a grant program, District 3 Supervisor William Herbert, wanted to know if Quicke’s plan would prevent Warsaw from offering businesses additional aid.
“The money that we allot to the town, I’m assuming would not allow them to offer an additional grant to the businesses where businesses can double-dip. Am I thinking correct?” asked Herbert.
“That is correct,” Quicke confirmed, businesses would not be able to double-dip into a county grant and a town grant. He added that he was already considering pulling the town into the county’s grant process so Warsaw would be involved in any application that came from town businesses.
But Herbert’s thinking is only correct if the county and the town choose to create that limitation.
According to Quicke, there’s nothing in the rules that prevents a town and county from offering separate aid programs. As he reiterated numerous times, “localities have complete authority over how to spend their money.”
Although Quicke believes it’s in the best interest for the town and county to work together, he scheduled a meeting with Warsaw town manager Joseph Quesenberry and ahead of that discussion, Quicke acknowledged that Warsaw may have a different view and may want to create its own initiatives.
“There’s nothing definite,” he said.
Any help for the public?
Ultimately, the purpose for this money is not just to fill the county coffers. “It’s not the purpose that we just absorb all this money and hold it for ourselves. I think the purpose is that we are able to do things for the general public,” said Quicke.
But since the pandemic struck, neither the board of supervisors nor the county administration have considered any financial programs for the general public.
Quicke noted that households have been helped through federal and state initiatives including the stimulus checks, enhanced unemployment and expanded assistance through the Department of Social Services.
And many of the eligible expenses in the CRF guidance are for the benefit of the general public, he said, citing items, such as care for the homeless, food delivery to residents, testing, medical facilities and telemedicine. But those categories of spending don’t offer the people direct financial relief comparable to what’s being discussed for the government and the businesses.
The forthcoming CRF funds may offer the opportunity to push funds directly to the people without costing the county anything.
“I’m not saying that’s not part of this. But I have not identified in these rules where that’s a qualifying expenditure. But it very well could be,” Quicke said.
He added if the rules allow it, he’s not against releasing some of the money for economic relief programs for the public. And he’s open to presenting such programs to the board.
For Richmond County citizens, that warrants some cause for optimism because Quicke has also expressed an openness for creative thinking when it comes to applying the rules in manner that allows Richmond County to achieve what it aims to achieve.
And he said, “it really does seem that the state is granting a fairly broad latitude for the county to spend the money as they see fit within those guidelines. So if the county thinks they can justify it, I don’t think the state is going to question us but so much.”
Over the next few weeks, Quicke said he aims to work on a detailed plan that outlines the best outcome for the county and town. It’ll include the terms for the county’s small business grants, and the goal is to have it ready to present by the June ll board of supervisors meeting.