COVID Relief Spending On Employees, New Buildings Not Advised

The idea of spending COVID relief funding on pay raises and new hires have been discussed as ways to fill positions.

However, County Government Consultant Ben Rodgers said American Rescue Plan and ESSER funding should address long-term goals, without reoccurring costs. Rodgers said the funding will not be there in a few years, bringing repercussions for trying to solve short-term problems.

“We’re trying to lead them to the path where they see what best serves the people of their county,” Rodgers said. “That’s not going to put a burden on the people of the county by increasing taxes because of a reoccurring cost.”

Rodgers said it is not advised for counties to assume growth in revenue to cover the increased expenses when federal funding ends. He said schools that are adding ESSER employees are different, because those positions are advertised as temporary while the funding is available.

Rodgers said another question he has gotten involves building new facilities with these funds. He said that spending option is currently unclear because the final ruling will not come out until September.

“A new county building, maybe a new school or a new jail, that’s a big time cost but they would like to use some of that money to do that and we’re saying no,” Rodgers said. “Adding onto a school could be okay we think, through ESSER money or adding onto a county administrative building could be okay through ARPA money because you’re trying to provide more space for people to spread out. If you can tie it to COVID and make it relatable to COVID, more than likely it’s going to be approved but we just don’t have that final guidance.”

Rodgers said there is still time to decide how to spend the federal funding before the Treasury Department gives its final ruling. Rodgers said there can be major consequences to acting too fast and misspending.

“I know we’ve got a county in southeast Tennessee, I do not serve that county but I know they’ve spent every dime they’ve drawn down from ARPA money,” Rodgers said. “They spent it all on essential workers and water lines and they don’t have anything left and that was the intention of the county mayor. He’s like, ‘we are getting rid of this money, we’re not sure on the guidance, we’re not waiting around because our employees deserve this pay, our people deserve water,’ and they spent it. We have not advised that because we don’t want one of our counties to get in trouble and have to pay that money back to the treasury with interest.”

He said another type of spending counties need to be cautious of involves revenue loss, he said the full revenue picture has to be taken into consideration, not just a revenue loss in one department. Rodgers said he is advising counties to focus on things like water lines, broadband and improvements for essential workers.