Stanislaus County to get $96 million in coronavirus relief. Now, how to spend it?
Stanislaus County leaders are not sure yet how $96 million in federal coronavirus assistance can be spent. But they are certain to find a way as the county incurs expenses from its response to the health crisis.
Chief Executive Officer Jody Hayes said he believes the CARES Act money is the largest amount of emergency assistance for the county that anyone can recall.
California is getting $15.3 billion from the federal relief package and its counties can spend their funding on unexpected costs and expenses.
The county’s budget for the year starting July 1 will take a big hit from a severe drop in sales tax receipts and other economic damage wrought by the outbreak this spring.
The CARES Act money can’t be used to make up those revenue losses, Hayes said. County departments like the Area Agency on Aging, Health Services Agency and Office of Emergency Services have taken on additional responsibilities during the crisis and are facing more challenges.
“I trust we will do all we can to put it back into the community to help businesses and industry hurt by the (coronavirus-related) shutdown,” Supervisor Terry Withrow said at Tuesday’s board meeting.
Even though the county socked away reserves during recovery from the Great Recession, it will have less tax revenue for paying for daily operations in the coming year. A financial report for the third quarter of the 2019-20 fiscal year is expected to show an $11 million impact on discretionary revenue that pays for public safety services.
April, May and June will produce likely dismal revenue numbers.
Supervisor Jim DeMartini said that, with stores closed at Vintage Faire Mall and limited auto sales, local government will suffer from lagging sales tax revenue. “I understood the (CARES Act) money was to reimburse us for our costs,” the supervisor said.
To assist businesses shut down by stay-at-home orders, the county committed $1 million to a small business relief program providing $10,000 grants to cover rent, utilities, payroll expenses or other needs.
County staff said 551 requests were received from business owners before the close of an application period Tuesday. An initial screening showed 110 applicants were not eligible; the majority of them didn’t have a business license and some were not based in the county.
With an additional $150,000 in donations from business leaders, the county can award 115 grants to struggling businesses.
The county took on millions of dollars in other expenses Tuesday.
Hotel in Modesto will house homeless
Supervisors approved an agreement for safe isolation of homeless people at the Modesto Hotel, at 1720 Sisk Road, in cooperation with the state’s Project Roomkey program.
The three-month agreement is for 121 rooms for homeless individuals in shelters who are at high risk of severe COVID-19 illness. The county is trying to make other arrangements for homeless who test positive.
The county has budgeted $2.65 million, including staffing and security, for the agreement with Dalijeet Singh Mann, Harinder Singh, DJ Management LLC and American Traders LLC. The budget includes $900,000 for repairs to any rooms that are damaged.
The county will pay a daily rate of $75 per room.
Records show the property was in foreclosure last year and had been set for auction in August. As of March 31, the owners owe $378,520 in transient occupancy taxes and district assessments including penalties to city of Modesto.
Thomas Reeves, a city spokesman, said the balance will be paid as part of the agreement between the hotel and the county, through the hotel’s proceeds.
When asked about the foreclosure, Dahlijeet Singh said Thursday a bank pushed hard last year for loan payments on construction. He said a construction project will build a new lobby and expand the hotel with 30 new rooms. The partners have owned the property since 2013 and continue to own it, Singh said.
Todd Aaronson, chief executive officer of the Modesto Convention & Visitors Bureau, said he applauds the effort to protect homeless individuals from COVID-19 illness, but the county could work with other hotel owners.
“It should be with facilities that are in good standing with their local taxes,” Aaronson said, noting he heard from other hotels in Modesto that were interested in the county program. “When the county makes a decision on which facilities to work with, the properties in good standing should receive first consideration.”
Hayes said Thursday the state initially provided the county with a list of hotel properties for the Roomkey program. County representatives contacted the owners and some were more eager than others, he said, and some had terms that were unacceptable.
“The Modesto Hotel was one that followed up,” Hayes said. “Along the way, we learned we had an issue with TOT taxes and we coordinated with the city.”
Supervisors authorized staff to look for 40 more rooms under the Roomkey project. “If there are other hotel operators that want to participate in the project Roomkey, feel free to call us,” Hayes said.
DeMartini, the county supervisor, questioned the possible expense of $900,000 for repairing room damages. He said Gov. Gavin Newsom promoted the Roomkey program and then expected counties to pay for it.
DeMartini said Thursday that he knew about the taxes owed to the city but not the foreclosure proceedings. His main issue is the millions being spent on local facilities for the homeless.
“I don’t know if (a foreclosure) would make a difference,” DeMartini said. “I question the assumption that this is needed. There has to be some limits on how much we spend on homeless programs.”
Stanislaus giving employees ‘battle pay’
The county also is giving a 5 percent raise, or “battle pay”, for employees working regular hours during the pandemic. The extra pay for eight weeks will cost the county about $3.2 million, which is covered by savings on health insurance benefits.
The Families First Coronavirus Response Act has been implemented to support county employees who are away from work for health reasons or are watching children at home following school closures. The federal act provides leave time and other coverage for employees meeting the requirements, a county staff report said.
This story was originally published April 23, 2020 at 3:59 PM.
