On August 6, 2020, the Town received correspondence from the Loudoun County Department of Finance and Budget indicating the second round of Coronavirus Relief Act Funding (CRF) would be disbursed.   The funding is to be distributed using the same population based methodology applied for the first round allocation.  Therefore, the second round distribution will be the same as the first, $891,932. 

Consistent with the first round, to receive this funding distribution from Loudoun County, the Town must again complete two critical steps, (1) formally authorize and accept the funding by submitting a second executed Certification for Receipt of Coronavirus Relief Fund Payments to the County[   ATTACHMENT 5 ] , and (2) present a new high level Spending Plan.  Once submitted to the County, staff will review the spending plan and if it is in compliance with the US Treasury guidelines, the second allocation of funds will be distributed.      

In order for the Town to receive the second tranche of funding from Loudoun County, a Certification for Receipt of CRF Payments and a 2nd Round CRF Spending Plan must be submitted, reviewed and approved by County staff.  Additionally, budget amendments are necessary to formally accept and allocate a remaining portion of the first round CRF as well as the second round CRF.  Action this evening to approve the budget amendments, certification for receipt of the 2nd Round CRF, and an associated Spending Plan, is recommended.  This will formally allocate the both rounds of CRF and ensure the timely receipt of the 2nd Round CRF funding from Loudoun County. 

A draft Spending Plan, with proposed allocations for the second round CRF, is provided ( Attachment 2) for Town Council’s review and discussion this evening.  This draft includes amendments to the 1^st Round Spending Plan.  The amended 1^st Round Spending Plan provides a more realistic representation of actual and expected expenses. 

On September 8, Town staff became aware of supplemental guidance from the US Treasury, regarding the use of CRF to cover payroll and benefits for police officers.  According to the September 2, 2020 Treasury CRF guidance (Attachment 1):  

In recognition of the particular importance of public health and public safety workers to State, local, and tribal government responses to the public health emergency, Treasury has provided, as an administrative accommodation, that a State, local, or tribal government may presume that public health and public safety employees meet the substantially dedicated test, unless the chief executive (or equivalent) of the relevant government determines that specific circumstances indicate otherwise. This means that, if this presumption applies, work performed by such employees is considered to be a substantially different use than accounted for in the most recently approved budget as of March 27, 2020. All costs of such employees may be covered using payments from the Fund for services provided during the period that begins on March 1, 2020, and ends on December 30, 2020.

In response to questions regarding which employees are within the scope of this accommodation, Treasury is supplementing this guidance to clarify that public safety employees would include police officers (including state police officers), sheriffs and deputy sheriffs, firefighters, emergency medical responders, correctional and detention officers, and those who directly support such employees such as dispatchers and supervisory personnel.

Additionally:

Within this 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 COVID-19 public health emergency. The full amount of payroll and benefits expenses of substantially dedicated employees may be covered using payments from the Fund. Treasury has not developed a precise definition of what “substantially dedicated” means given that there is not a precise way to define this term across different employment types. The relevant unit of government should maintain documentation of the “substantially dedicated” conclusion with respect to its employees.

Although it appears the Treasury has broadened the use of CRF, to include the salary and benefits of police officers, if the Town utilized CRF for this purpose, we must be able to clearly substantiate and document compliance.  The burden is placed on the Town to maintain, and have available for audit, HR and payroll records demonstrating compliance.  Unfortunately, at this time, the Treasury has not provided a clear definition of “compliance” or “substantially dedicated.”  Our initial understanding, and with clarification from the County Finance Office, the Treasury is providing an administrative accommodation, allowing local governments to presume public safety employees meet the test as “substantially dedicated” to mitigating or responding to the COVID-19 public health emergency.  It is reasonable to conclude, as the very nature of the police officer’s duties include close contact with the public to enforce public health and safety, their duties in the field could be considered to be a substantially different use.   Regrettably, as the guidelines and opinions do not provide clear details on the use, management, and reporting, staff is reluctant to recommend the allocation of CRF for the entire pay and benefits of the patrol officers.  Clearly defined COVID-19, public health related activities will be tracked and expensed through payroll on an hourly basis. 

The Spending Plan includes a proposed increase in Network Infrastructure, licensing, equipment, and supplies is for upgrades and enhancements to the Town’s audio and visual system in the Town Council Chambers.  This upgrade will allow the Town to ensure transparency and maintain consistent accessibility to the meetings.  Although the enhancements focus primarily on remote participants and viewers, the experience for those attending in person will also be improved.  The proposed changes or additions would improve audio quality and merge video and audio into a single feed allowing the live-stream and GoToMeeting audio and video to be identical.   We only expect a portion of the upgrade will be eligible under the CRF guidelines. 

With many school systems beginning the school year with distance learning, working parents are now faced with finding childcare, along with other unexpected responsibilities.  To assist Town staff with expenses related to childcare needed to allow them to go to work, we are proposing a program to enable the Town, using CRF, to provide financial support on a reimbursement basis, for all or a portion of necessary childcare.  Staff would be eligible for reimbursement up to $800.00 per month. 

The increase in Facility and Workspace Modifications is attributable to proposed HVAC system improvements.  The funds would be used to install HVAC air purification units, in Town facilities, to protect employees and the public from transmission of COVID-19.  

In order for the Town to receive the second tranche of funding from Loudoun County, the Certification for Receipt of CRF Payments and the Spending Plan must be submitted, reviewed and approved by County staff.  Action this evening is recommended to ensure the timely receipt of the funding. 

There will be less time to utilize the second allocation of CRF as the Town is required to return any unspent funds to Loudoun County by December 15, 2020.  Returning unspent funds prior to the CRF program end date of December 30, 2020, will be problematic as it is plausible there will be expenses incurred in November and December, in need of payment, after the December 15 deadline.  Additionally, the Voucher program is active until the end of the calendar year and we will need to adjust spending compliance deadlines for the Town’s grant recipients.  

The CARES Act funding is considered supplemental, and is intended to offset expenses specifically associated with and in response to COVID-19.  All funds are subject to conditions set forth by the US Treasury an may only be utilized for qualified expenditures incurred between March 1, 2020 and December 30, 2020.   As such, there is no negative fiscal impact.   Budget Amendments, BA 21-003 and BA 21-004 are attached [ATTACHMENT 3 ]to appropriate the remainder of the first distribution of CARES Act funds in the amount of $571,932 and the second distribution of CARES Act funds in the amount of $891,932.  

I move the Town Council approve Budget Amendments BA 21-003 and BA 21-004 to appropriate the remainder of the first distribution of CARES Act funds in the amount of $571,932 for Fiscal Year 2020 and the second distribution of CARES Act funds in the amount of $891,932 for Fiscal Year 2021.

I further move, Town Council authorize Mayor Fraser, David Mekarski, and Elizabeth Krens to execute the Certification for Receipt of Coronavirus Relief Fund Payments for the second distribution of funding by Loudoun County.

I further move, Town Council authorize the Town Manager to submit the high level spending plan, as identified with this staff report as Attachment 2, to Loudoun County with the executed Certification for Receipt of Coronavirus Relief Fund Payments.

OR

I further move, Town Council authorize the Town Manager to submit the high level spending plan, as identified with this staff report as Attachment 2, with the following amendments:  _______________________________________________________________________________, to Loudoun County with the executed Certification for Receipt of Coronavirus Relief Fund Payments.