The Coronavirus Aid, Relief, and Economic Security Act, also known as the CARES Act, is a $2.2 trillion economic stimulus bill passed by the 116th U.S. Congress and signed into law by President Donald Trump in March 2020 in response to the economic fallout of the COVID-19 pandemic in the United States.
Through the CARES Act, $150 billion has been provided for payments to State, Local, and Tribal governments navigating the impact of the COVID-19 outbreak.
The CARES Act requires that the payments from the Coronavirus Relief Fund only be used to cover expenses that—
1. are necessary expenditures incurred due to the public health emergency with respect to the Coronavirus Disease 2019 (COVID–19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020.
Amounts paid to States, the District of Columbia, U.S. Territories, and eligible units of local government are based on population as provided in the CARES Act. The CARES Act directs Treasury to use U.S. Census Bureau data for the most recent year for which data is available. The amount of payments made to each State was reduced by the aggregate amount of payments that was disbursed to eligible local governments within such State that provided the required certifications to Treasury.
A unit of local government eligible for receipt of direct payment includes a county, municipality, town, township, village, parish, borough, or other unit of general government below the State level with a population that exceeds 500,000.
Under this formula, Jackson County received approximately $122.7 million in CARES Act funding.
On June 29th, 2020, the Jackson County Legislature allocated $36,924,000 in CARES Act funding for the following cities in Jackson County: Kansas City, Independence, Lees Summit, Blue Springs, Raytown, Grandview, Grain Valley, Oak Grove, and Greenwood. This allocation was based on a total of $40 million to be distributed to cities over 5,000 in population within Jackson County. Independence, with a 17.4% of the total Jackson County population, will receive a total allocation of $6,953,474.
The legislation authorized the County Executive to enter into an agreement with each municipality.
The agreement will have two options for you to consider;
Option 1 will be a distribution agreement whereby the County will distribute the allocated funds based on a spending plan that is submitted to the County. The County will then administratively approve the proposed spending plan and incorporate into the final agreement between the City and the County. All components of the plan must meet eligibility requirements under the CARES Act. Under option 1, the individual city will receive the money upfront and then be responsible for subsequent allocation of those funds through your specific contracting processes. Included in this agreement will be an indemnification agreement that should there be an issue with a subsequent expenditure or an expenditure that was not in conformance with the approved spending plan, those disallowed funds will then need to be repaid to the County.
Option 2 will be a reimbursement agreement authorizing the County to reimburse for all costs incurred with the City’s pre-approved spending plan. The City can choose either to have the County pay invoices or seek reimbursement of costs incurred for COVID relief. Under this proposal, The County will retain all responsibility should costs be later deemed ineligible.
It is the intention of the County that this allocation of funds will cover all COVID-19 costs incurred by the city, any financial assistance to business or individuals within your community, and in the case of Kansas City, all public health costs will be covered by this allocation as well.
The City of Independence is pursuing the Option 1 plan. In order to do so, the City Council, must pre-approve a spending plan that will be submitted to Jackson County for review prior to funds being allocated to the City.
While the City has identified nearly $24 million in eligible costs, only $6.9 million is being made available. The attached exihibit shows the total need for each use, how the $6.9 million is recommended for allocation, and the remaining need for each use, should additional funds be made available.