Billings to be reimbursed for $13 million in first responder salaries from federal CARES Act

Posted at 11:05 PM, Oct 05, 2020
and last updated 2020-10-06 12:54:24-04

The Billings city government is on track to receive $13.7 million in federal COVID-19 relief money to offset first responder wage and benefits costs incurred since March 12, and city officials are starting to talk about how to spend it.

Andy Zoeller, city finance director, brought an update to the Billings City Council Monday on the grant-eligible expenses the city has incurred since the start of the pandemic. The grant money has stipulations decided by the U.S. Department of the Treasury, Zoeller said.

Billings City Administrator Chris Kukulski teed up the presentation.

"The intent tonight is not to define where we'll spend these dollars, but it is to get us thinking into the future. We're going to need to have those conversations," Kukulski said.

The city benefited from five different allocations from the CARES Act, including the first-responder money, Zoeller said. The other four allocations went to specific departments:

  • Federal Transit Administration (city buses) - $5.4 million
  • Federal Aviation Administration (Billings Logan Intl. Airport) $13.5 million
  • Department of Justice (PPE for first responders and city employees) - $230,000
  • Housing and Economic Development (HUD) - $909,000

The fifth and largest grant allocation to the city, the $13.7 million comes from the State Stabilization Fund, which is aimed at helping local governments, Zoeller said. This money came from $1.25 billion given to the state from the federal government.

It is the state's responsibility to dole out money to communities and businesses. To help with that task, Montana Gov. Steve Bullock put together a 24-member group called the Coronavirus Relief Fund Advisory Council made up of state businesses and organizations.

The Department of Treasury stipulates the grant money can only be spent on COVID-19-related expenses that were not accounted for in the budget most recently approved as of March 27, Zoeller said.

More specifically, eligible expenses include medical expenses, public health expenses, overtime and benefits pay for first responders and public health personnel, and other employees with overtime dedicated to COVID-19, Zoeller said.

The city will be reimbursed for $13.7 million in police, fire and 911 dispatch payroll and benefits costs incurred between March 12 and Aug. 31, Zoeller said, but that amount could grow. The time frame for eligible expenses will likely be moved to the end of the year, as it has been pushed back three times since the pandemic began, Zoeller said.

"They keep extending that deadline or the eligible timeline. As of Friday, it was only through Aug. 31. It's highly, highly likely they will continue to extend that month over month until we hit Dec. 30," Zoeller said.

A list of other expenses the city can be reimbursed for can be found below.

  • Employees substantially dedicated to responding to COVID-19 - $10,000.
  • PPE, cleaning supplies, contracted cleaning - $31,000
  • Remote communication technology - $84,000
  • Modifications to public buildings - $5,500

"We pay the eligible cost up front on any federal grant, then get reimbursed once we've expended the funds. We have incurred all of the eligible costs at this point. We are being reimbursed for those," Zoeller said.

Essentially, the CARES Act turns into a windfall for the city, bringing in additional money for first responders from the grant. Zoeller estimated that the city's reserves could balloon to $20 million from its current $13.7 million once the expenses are reimbursed.

"A significant, significant portion of that (reserves) being public safety salaries," Zoeller said.

When it comes to the CARES Act money, now the question for the City Council is how to spend it. Discussions turned to the possibility of hiring more police officers. Again, the money must be spent in accordance with stipulations put in place by the Department of the Treasury.

Kukulski said the council will likely have those discussions in November as it works to adopt a capital improvement plan for 2021. In the plan, the Council decides how much money to spend on improvement projects looking five years into the future.

Monday's meeting was a work session and no legislative decisions were made.