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Cities, counties can apply for $250M in federal COVID-19 relief money

By MARY SELL and CAROLINE BECK, Alabama Daily News

MONTGOMERY, Ala. – Alabama cities and counties can now apply for reimbursement of expenses related to the COVID-19 health crisis. For the state’s larger municipalities and counties, millions of dollars are available.

The federal CARES Act approved in March sent about $1.8 billion in relief money to the state to be spent on response to the virus. Last month, Gov. Kay Ivey and lawmakers settled on a formula for dividing that money amongst various entities and interests, including $250 million to local governments.

The state Finance Department worked with the Alabama League of Municipalities and the Association of County Commissions of Alabama to come up with a formula for distributing that $250 million so that $125 million is available for cities and $125 million for counties. For municipalities, the formula includes a minimum of $25,000 to every city and town and then additional dollars based on population.

Nineteen of the largest cities are eligible for $1 million or more. Montgomery, Huntsville and Mobile can apply for more than $8 million.

“As a result of COVID-19, Alabama’s municipalities are experiencing revenue losses on several fronts,” Alabama League of Municipalities interim Executive Director Greg Cochran told ADN. 

“…Municipalities are the foundation of our state’s economy and these funds, while just a start, will ensure that they can provide the essential resources and services to foster safe, vibrant spaces for businesses to thrive and citizens to live, work and play.”



For counties, the formula includes a base of $300,000 and then additional money based on population. Mobile County has the largest possible allocation at about $10.5 million. 

Jefferson County and its municipalities are excluded from this funding because as the state’s only county with a population of more than 500,000, it received directly about $115 million in federal COVID-19 relief money.

Sonny Brasfield, executive director of the Association of County Commissions of Alabama, said that compared to man other states, Alabama’s formula for distributing funds to local governments “puts us in the head of the class as far as allocating money to cities and counties.”

Brasfield also said it is important to note that this is not grant money simply given to local governments.

“These are not checks,” Brasfield said. “The dollar amount is representative of eligible reimbursements.” 

Eligible uses of the money must meet three conditions:

  • The expenditures were incurred because of the COVID-19 pandemic;
  • They were not budgeted prior to March 27;
  • They were incurred between March 1 and Dec. 30.

The money can’t be used to fill tax revenue shortfalls caused by COVID-19.

Letters outlining the reimbursement process were sent last week to local governments from the Alabama Department of Finance.

Finance Director Kelly Butler on Thursday told Alabama Daily News there are strict federal limitations on reimbursements but also opportunities for entities to recoup some of their costs.

“For example, if they’ve bought equipment for their personnel or their government operations, (personal protection equipment), that would definitely be reimbursable,” Butler said. “The guidance also lets us reimburse for salaries paid for direct frontline workers, law enforcement, health care workers, if they are employed by a town or city. They can reimburse themselves for the amount spent on cleaning and sanitation, those are just a few examples.”

A May report from the Association of County Commissions of Alabama said “a significant portion of current county budgets have been expended in maintaining service levels while adhering to state and federal COVID-19 health orders and guidelines to protect local communities.”

Figures weren’t included in the report, but some of the COVID-19 costs for counties have included:

Increased payroll for public safety, public health and similar essential county employees mitigating and responding to COVID-19;

Significantly increased overtime and hazardous pay to certain employees;

Paid sick leave, paid family leave and medical leave;

Enhanced law enforcement presence at the courthouse to assist with the flow of public interactions;

Mitigation of the threat of COVID-19 in county jails.

Butler said that if local governments don’t qualify for all the possible money available to them, the funds ultimately go back to the federal government.

“Whether it’s county, city money or any of those (other allocations of the $1.8 billion), the CARES Act and the guidance clearly indicates that whatever we are unable to use has to be returned to the federal government,” Butler said. “Of course, we don’t want to do that. We’re wanting to be able to use the money but we have to use it in accordance with the guidance, that’s the trick.”

Butler said his office this week sent state agencies guidance similar to what was given local governments so they too can begin applying for the federal funds.

“COVID-19 took a toll on entities across our state and nation, and still continues to do so,” Gina Maiola, a spokeswoman for Gov. Kay Ivey, said. “The governor pledged to aid those hurting, which is why she is working to efficiently get the CARES Act funds in the hands of those who need it most, including our local governments.”

Tracking losses

The  Alabama League of Municipalities in April launched a COVID-19 Revenue Loss Portal. Municipal and county officials can enter into it their various 2019 tax revenues, their previously projected 2020 revenues and actual receipts after the coronavirus shut down some businesses and kept many Alabamians home.

So far, about 34 cities have responded with data from March and April, league officials told Alabama Daily News this week. Some of the larger cities to respond include Montgomery, Huntsville, Tuscaloosa, Dothan, and Gulf Shores.

For those two months, the areas we are seeing the most loss are in the areas of gas tax and lodgings tax, Cochran said. There has been an 11% loss in gas tax and 34% loss in lodgings tax.

Cochran said the league is continuing to lobby the state’s congressional delegation to include lost revenues in a future COVID-19 relief packages.

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