County faces potential lack of reimbursement for COVID-19 expenses

January 20, 2021 chris
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By Katie Bohannon, News Editor

Counties statewide reside in limbo following the news that COVID-19 expenditures may not be reimbursed. While Etowah County commissioners and local officials await further response from the state, they continue to strive and advocate for a solution.

The news resulted from the decision of Alabama Department of Finance Director Kelly Butler and a panel of six legislators who transferred $72 million of the remaining CARES Act funds designated for local governments to the Unemployment Insurance Trust Fund, which pays state unemployment benefits.

The transfer comes as a result of Alabama ACT 2020-199 (SB161), which coincides with federal guidelines and requires the state to only spend federal Coronavirus Relief Fund monies in one of several categories.

The $72 million made up a portion of the $1.8 billion of federal funds Alabama received under the Coronavirus Aid, Relief and Economic Security (CARES) Act, which was intended to offset the cost of necessary provisions resulting from COVID-19. While the state implemented stringent regulations, interpretation and guidance for counties to spend the allotted funds, all expenses required state approval prior to any purchases made. Failure to meet these guidelines would result in no reimbursement.

Since Etowah County’s initial award of $2.8 million in CARES funds, County Administrative Officer Shane Ellison attested to the commission’s diligence in following all state guidance to expend the money. While a memo sent by Butler on July 12 states, “all reimbursement requests received by the Coronavirus Relief Fund office as of January 11, 2021, will be audited and processed in keeping with CARES Act Coronavirus Relief Fund policies and guidance,” Ellison noted that Etowah County never received any news of a July 11 deadline to file for reimbursement.

In a statement to Al.com, Butler emphasized that counties and cities received more time than all other entities to apply for reimbursement. A previous Mike Cason article quotes Butler saying, “Any local government that has submitted their application, it will be processed. Even if that means it’s a little bit past the end of December. Treasury has said that if we have received a reimbursement request prior to the deadline, we will have a two to three month period to work out those prior bills as long as they were expenses incurred before December.”

Butler noted in early December that he anticipated one more reallocation, following the $300 million of CARES Act funds transferred into the unemployment trust fund in September of 2020.

According to Ellison and the commission, as well as a state Counties and Municipalities CRF FAQ sheet, the only deadline the state administered was the requirement that all awarded funds were spent by December 30, 2020.

A deadline for filing reimbursement requests was never given, nor was a deadline posted on the request form. Ellison stated that in all his experience with grants, he has never witnessed a grantor impose an arbitrary deadline with zero notice.

“They just changed the rules of the game,” said Ellison. “I can only play by the rules if you tell me what they are.”

While Etowah County met the Dec. 30 deadline, due to the lack of notice, the county (like others statewide) had not completed its reimbursement request by the imposed Jan. 11 date. Should Etowah County not receive reimbursement, the county would lose $1.37 million – pandemic related expenses the county channeled into personnel payments, sanitation equipment, temperature scanners for the jail and computer equipment for working remotely.

Expenses even went towards providing volunteer fire departments with Lucas chest compression devices, a valuable resource that will save lives throughout Etowah County.

“I care about Etowah County first,” said District 6 Commissioner Craig Inzer, Jr. “The first thing I want everyone to know is that was a very well-thought out discussion about how we spent the money. To our constituents and Montgomery, we put our time and effort into spending this money wisely and how we were supposed to. We kept records, which we have, and now you’re going to pull the rug out?”

Since the news, county commission members have worked to resolve the issue. All commissioners voiced the need to cooperate with the local legislative delegation on this matter and have reached out for assistance. Ellison noted that Sheriff Jonathon Horton, Revenue Commissioner Linda Barrett-Vaughan, Probate Judge Scott Hassell and District Attorney Jody Willoughby have been involved in pleading Etowah County’s case.

“Etowah County is not going down quietly,” said Commission President Jamie Grant. “I talked to both sides directly. I have told them point blank that Etowah County is not going to be left with this bill. You guys have dropped the ball, and it’s going to be left up to you to fix this somehow. We’re counting on the four of you to come together and figure this out. It’s no fault of the county and no fault of the four of them, because this was done in Montgomery. All four of them have said that this is not the way we should be doing business.”

State Representative Craig Lipscomb expressed his initial shock to the unforeseen Jan. 11 deadline and shared his actions to challenge the decision.

“Immediately upon the receipt of the letter sent on the 12th, I contact Butler’s office and various others in an attempt to try to resolve the matter,” said Lipscomb. “Butler stated that while he felt confident that there would be adequate reserve to reimburse these expenses, he wasn’t making any promises.  So, I promptly notified all of my counties and municipalities and instructed them to complete paperwork and file it, in the event that this is a first come first serve situation.  If Butler’s office had been smart about this, they would have stipulated that all monies should be spent by December 15 and all paperwork due by December 30.  Had that happened, then we would not be dealing with this situation.”

District 2 Commissioner Johnny Grant and District 4 Commissioner Tim Ramsey discussed the Association of County Commissions of Alabama’s (ACCA) role in the situation, as well as ACCA Executive Director Sonny Brasfield’s involvement with advocating for the counties.

Brasfield learned of the transfer prior to the legislators’ final decision and contacted the Alabama Department of Finance immediately. He noted that both the ACCA and finance department were open with one another about their perspectives on the plan and the lack of notice for the counties regarding the reimbursement deadline. On Friday, Jan. 8, the finance department indicated its willingness to give counties and cities two weeks to submit all reimbursement information, but denied the extension the following Monday.

“I was very surprised that a decision was made without any notice to us,” said Brasfield. “On the other hand, we had no reason to believe that we would have an indefinite time to send in the [reimbursement] applications. We knew that there would be a deadline. We just had reason to believe, based on the working relationship, that we would be given a deadline that we could pass on to our members. Of course, that’s not how that happened.”

Brasfield shared that while the finance department stated it would process all claims received by Jan. 11, he remains uncertain as to how the state will account for the counties statewide possessing countless emails from the finance department approving expenditures for reimbursement. Etowah County is one of those entities.

“Counties acted on those emails and made purchases,” said Brasfield. “They expended money in many cases that counties didn’t have, based on those emails. Does that total $1 million or several million? I don’t know. I don’t know if that’s figured in the finance department’s estimate or not. I hope it’s included, because I believe the state has a moral obligation to reimburse those expenditures.

“The [reimbursement] applications in hand [at the finance department] by Jan. 11 will almost certainly utilize the money that was left after the transfer, if not exceed the money that was left. Then, the question becomes how does the state deal with these other expenditures, like the ones in Etowah County, where the commission is holding an email, the commission had been told it had money available and it spent the money? How does the state react to Etowah County’s reimbursement application?”

Commission President Jamie Grant emphasized that Etowah County mirrors the same position of its 67 fellow counties and the countless cities statewide battling the same predicament. While his primary focus is Etowah County, he remains conscious of the transfer’s impending effects on the state collectively and joins the commission in working towards a solution. Grant encouraged other commissions to contact their state representatives.

“Every county is going to be impacted by this,” said Grant. “It’s not just Etowah County. Every county is going to feel the brunt. [If the money is not reimbursed] the entire state suffers.”

Brasfield shared that he is actively communicating with the finance department on the issue. While he cannot disclose the specifics of his conversations, he noted he has personally spoken to members of the panel that approved the transfer.

“We are in the process of trying to find a solution,” said Brasfield. “We’re certainly happy to be available to be part of the search party for the solution, if other folks are willing to look.”

Brasfield gave an account of his advocacy for the counties so far.

“We’ve done what we do, which is stand up for counties, communicate with the people who made the decision and encourage and request that they reconsider their position,” said Brasfield. “We are working to try to represent counties and the folks that depend on what county government does. One of our messages has been clear and straight forward: since the governor lifted her stay-at-home order, the thousands of county employees in this state have been at work every day. The sheriffs’ offices never closed down. The county jails never closed down. We have been and are today on the front lines. Anybody who doesn’t believe that needs to get in their car and go to the courthouse tomorrow. To think that counties should not be a priority is the wrong perception of what’s gone on at the local level.

“We’ve got what I hope is an outstanding relationship with members of the Alabama legislature. We work really hard on that every day. We have what I hope is an outstanding relationship with the administration of Governor Ivey. We’ve worked together on a lot of difficult challenges. What we have to do now is work with the situation we find ourselves in and try to make the best solution we can, given where we are. That’s what we’re trying to do…that’s what we’re trying to achieve.”

As Etowah County awaits the state’s response, its commissioners and officials continue to uphold their mission, committing themselves to fighting for the most beneficial outcome for the county and its residents.

“We want to give the state the opportunity to do the right thing,” said Ellison. “We’ve pled our case. We’ve done what we were supposed to do. All that we’re asking is that they do what they promised to do.”