Small Cities Will Get County CARES Money Tied to Population

Cities across San Diego County left out of the first round of federal CARES Act stimulus dollars may now get a check from county supervisors tied to the size of their population.

U.S. Treasury rules allow San Diego County to share its $334 million award with smaller cities, but it was not required, leaving small cities in the lurch. Every city in the county except San Diego was left out of the direct CARES Act aid sent to local governments because they fell under the 500,000 population cutoff included in the legislation.

Initially, federal legislators wanted to send CARES money to states alone for speed and efficiency, but “as cities urged more direct resources the 500,000 cut off was selected with the intent that states and counties would have a better sense of what the smaller cities needed than the federal government trying to make those decisions,” said Mary Anne Pintar, chief of staff for Rep. Scott Peters, in an email.

The choice by San Diego County supervisors to share their CARES Act funds is welcome news to the region’s small cities, who said they are also grappling with the coronavirus pandemic. Before, they had access to smaller, more restricted piles of stimulus funds, including dollars set aside specifically for low-income residents or airports. In some cases, small city response costs have piled up with little to no federal aid to date. Some small cities also want to provide extra support to struggling businesses like larger cities and counties have done with CARES Act funds.

Jeffrey Epp, city manager for Escondido, said he is “grateful” for the county cash.

“Our share is a little more than $2 million and we will be using it wisely!” Epp wrote in an email. “We are looking at two general areas: first, reimbursement for incurred COVID-19 expenses, and then a second related category of expenses which would be in connection with our economic development/small business assistance efforts.”

Oceanside hopes to spend the bulk of the new $3 million county allocation on payroll expenses for pandemic response and modifications to public facilities to continue operations and comply with social distancing. Those two things could cost $1 million each, said Michael Gossman, Oceanside’s assistant city manager. Staff hopes to spend the balance on personal protective equipment, paid sick and family leave to comply with public health orders, as well as support for small businesses.

Oceanside staff’s proposal will go to the City Council June 17, Gossman said.

“We plan to use the funding to provide assistance to small businesses, provide housing assistance to those that don’t qualify for other programs, help vulnerable populations get testing, and cover some city expenses related to the pandemic,” wrote Andy Hall, Imperial Beach city manager about the nearly $500,000 the city is eligible for from the county.

Chula Vista is still figuring out exactly how it wants to spend the nearly $5 million it may receive from the county, though city spokeswoman Anne Steinberger said it will help cover a wide array of needs.

“We anticipate utilizing the funds to support our COVID related responses in the city including: police, fire, and public works support for food drives, vaccination events, and public safety awareness; economic development efforts to help small businesses navigate the various federal funding programs; personal protective equipment for city staff; and supplies and equipment required for remote functionality of city operations,” Steinberger wrote in an email.

El Cajon staff is working on a proposal for spending $1.84 million in new CARES Act money that will go to the City Council June 9, said city manager Graham Mitchell.

To get the money, cities have to sign a contract with the county pledging to use the funds on only permissible coronavirus response costs, and detail the city’s spending plan. Costs like emergency aid and business loans or grants are allowed, as is paying for first responders or law enforcement of public health orders. But the money can’t be spent to simply backfill lost sales and tourism tax revenues – one of the larger problems governments face, including the county of San Diego.

Here is a breakdown of the county’s CARES Act money now available for smaller cities:

Source: San Diego County

Cities that take the county funds must communicate with county officials about spending them and must spend it on a fast track.

“On July 31, cities will detail to the county how they have used CARES Act funds to date,” county spokeswoman Sarah Sweeney in an email. “By September 30, cities should exhaust all CARES Act funds and deliver a final report to the county. If a city does not utilize all of its CARES Act funds or if it spends the funds on an unallowable expense, the city is required to pay that portion of CARES Act funds back to the county.”

The county has until Dec. 30 to spend all the $334 million it received, or risk returning money to the U.S. Treasury.

Aside from the $25 million given to smaller cities in the region, county officials plan to spend the balance of their $334 million on testing and tracing efforts, COVID-19 housing, child care vouchers for employees, local economic stimulus efforts and other costs.

And still more financial help may be on the way later this year from the state or federal government.

The latest version of Gov. Gavin Newsom’s proposed state budget for next year, which begins July 1, would send another $54.2 million in CARES Act money to San Diego County cities, with a separate $248,000 sent to the city of San Diego alone.

That money is not certain though. State legislators have announced a deal on their own proposed budget – lawmakers and Newsom must reconcile their versions by June 15.

Meanwhile, a new package of federal stimulus dollars for governments and individuals known as the HEROES Act passed a vote in the House, but has not been heard in the Senate and has stalled.

Correction: An earlier version of this title misstated Mary Anne Pintar’s title. She is chief of staff to Rep. Scott Peters.