Local governments still deciding how to spend COVID-19 relief money

Millions of federal dollars will be coming Johnson County’s way as soon as next month from the latest pandemic relief package, and local officials are still ironing out the details on how to spend that money.

Part of the massive $1.9 trillion relief package Congress passed last month allocated $350 billion to states and local governments to assist with pandemic-related revenue shortfalls.

Local governments will receive much larger amounts of relief money than they did when the $2 trillion CARES Act passed last year.

Johnson County alone is expected to get $30.7 million, more than three times the $8.6 million it got from the CARES Act.

Cities and towns are also expected to receive significantly more federal dollars than from past pandemic relief packages. Greenwood will get the most at nearly $9 million, as it is considered a “metro city,” based on its population. Franklin will get $5.3 million, while smaller towns such as Edinburgh and Whiteland are expected to get nearly $1 million each.

A large sum of money with few clear instructions on how to spend it means local governments need to be careful in the planning process, said Adam Stone, a local government financial consultant who works with several cities and towns in the county.

“We’re trying to seek clarification on what’s eligible,” Stone said. “The questions are about how the money can be used … and that’s going to take a bit of time.”

Per the bill, local governments can use the money for a number of expenses, including revenue shortfalls; responding to negative impacts on housing, nonprofits and small businesses due to the pandemic; paying salaries of essential workers; or paying for necessary investments in water, sewer or broadband infrastructure.

Though the bill outlines some parameters for how local governments can spend relief money, there is still a gray area, particularly with regard to using the funds for infrastructure improvements, Stone said.

“Communities are probably getting solicited from every vendor imaginable. What I caution people is to kind of go slow with this, because you want to make sure your uses are thoughtful and informed,” Stone said.

Franklin has somewhat of a plan for its $5.3 million in relief money. Mayor Steve Barnett has been meeting with the clerk treasurer and several accountants, attorneys and financial advisers to assess the money coming from the package and how it could fit into the city’s needs, he said.

One definite use will be to reimburse the city’s parks and recreation department, which suffered a revenue loss of about a quarter million dollars last year due to the pandemic, Barnett said.

Pending further clarification, he would also like to allocate some funding to remodel Fire Station No. 21, which is in need of an upgrade.

“Our fire department and first responders led our COVID-19 attack,” Barnett said. “Fire Station No. 21, I can’t say this enough, is in dire need of being remodeled. Give them more space, give them more of a sanitized place to live in.”

Barnett also wants to remodel the city’s Active Adult Center, a community center for senior citizens. He is not sure if the federal relief money can be used for either that or the fire station remodel, so the city is waiting for clarification.

“We know we have those two big needs for our seniors and our fire department. I feel like it’s a good use because those are the two that were impacted the most in our city,” Barnett said.

In Greenwood, the city is still waiting to figure out what exactly it is allowed to spend the money on before creating a set plan, Mayor Mark Myers said. Ideally, he would like to use it for payroll and some infrastructure projects.

The county is also still wading through the details of the relief package, said Brian Baird, commissioner. The Johnson County Board of Commissioners is supposed to draft an ordinance to present to the Johnson County Council for the use of the $30 million in funds at some point, he said.

“We are not sure, at this point, what the specific directives are,” Baird said in a written statement. “In my view, as one of three (commissioners), the biggest issues to deal with are roads throughout the county, and sewers and water on the (Interstate) 69 Corridor.”

Local governments are expected to receive the relief package funds 60 days after President Joe Biden signed it on March 11, which would be next month, so there is still some time to plan.

Stone said based on his conversations with local officials, a use will be found for all the money that is coming in.

“Everybody wants to make sure their community is using it in the best way possible because it is a lot of money,” Stone said. “I mean, it’s a windfall for communities. That’s great, but the problem with that is you don’t want to get reliant on these funds.”

It is a one-time payment that will run out at some point, he said. So, local governments need to be thoughtful, and not put money toward long-term projects or programs.

“This becomes a massive financial planning conversation,” Stone said. “The difference in how different communities utilize that or don’t is really important for their entire local economic recovery. I can’t stress enough that they really need to be thinking about this.”