2020.09.08 CC Packet - Laserfiche WebLink

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14669 Fitzgerald Avenue North, Hugo, MN 55038 • (651) 762‐6300 • www.ci.hugo.mn.us TO: Honorable Mayor Tom Weidt and Members of the City Council FROM: Ron Otkin, Finance Director SUBJECT: Approve Updated Coronavirus Relief Fund Supplemental Budget DATE: For the City Council Meeting of September 8, 2020 DESIRED COUNCIL ACTION Approve Resolution Adopting the CARES Funding Budget. BACKGROUND The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was created because of the sudden decline in economic output following the Coronavirus Disease 2019 (COVID‐19) outbreak that significantly altered the fiscal outlook for state and local governments. The CARES Act was signed into law on March 27, 2020 and created the Coronavirus Relief Fund (Fund), which provided $150 billion in direct assistance for domestic governments and stipulated that $139 billion be allocated to state governments based on their populations. The CARES Act details eligible purposes for which Coronavirus Relief Fund payments may be used. It allows local governments to make payments for programs that (1) are necessary expenditures incurred due to the public health emergency with respect to COVID‐19; (2) were not accounted for in the budget most recently approved as of the date of enactment; and (3) were incurred during the period that begins on March 1, 2020 and ends November 15, 2020. The Department of the Treasury has released guidance and extensive fact sheets which sets forth their interpretation of these limitations on the permissible use of the Funds. It is important to note that Treasury guidance allows budgeted public safety expenses to be funded with Coronavirus Relief Funds because their work is substantially dedicated to mitigating or responding to the COVID‐19 public health emergency. The Minnesota Legislature failed to pass bill SF 47 that would distribute the Coronavirus Relief Funds to local units of governments before adjourning their special session. However, on June 25, 2020 Governor Walz announced that he would distribute $841 million in federal funds to cities, counties, and townships for coronavirus related expenses through the Legislative Advisory Commission (LAC) process defined in state law. Under the plan, cities with populations of 200 or more would be eligible to receive a distribution from the Minnesota Department of Revenue of $75.34 per capita. On June 29, 2020 the City of Hugo submitted the Coronavirus Relief Fund Certification Form to the Minnesota Department of Revenue certifying our intent to comply with the eligible use parameters outlined in the CARES Act and requesting distribution of the City’s portion of the Coronavirus Relief Funds. On July 7, 2020 the City of Hugo received $1,148,713.00 in Coronavirus Relief Funds from the Department of Revenue. The City of Hugo has until November 15, 2020 to spend the funds. Any unspent funds must be sent to Washington County for reuse on eligible pandemic costs. The Finance Department spent time researching the issued guidance and fact sheets and using that information assembled a proposed supplemental budget that met the criteria set forth and established disbursements of the Coronavirus Relief Funds. The original CARES Funding Budget was presented to the Council at their August 3, 2020 City Council Meeting. Hard costs budgeted for included the reimbursement of expenditures made to manage the pandemic and modifications made at City buildings to allow business to continue safely for Council Members, Commissioners,