The Brown County Council received some good news last week: The county is eligible for almost $500,000 in reimbursement related to the COVID-19 response, with other money coming our way.
The county can receive up to $494,000 in reimbursement through the federal CARES Act for anything spent on responding to the pandemic locally, county commissioner Diana Biddle reported during the May 18 county council meeting.
The Town of Nashville can receive up to $39,000 in reimbursement through the CARES Act, Biddle added.
“Thank you for bringing so much good news our way. We were anticipating quite a cash flow crunch, which is why we were looking at Indiana Bond Bank and other alternatives to keep our checking account greater than zero,” council President Dave Redding said.
In April, the council had a discussion about doing a possible tax anticipation warrant in case there are budget shortfalls because of the pandemic, and in case the county does not collect as much in income or property taxes this year.
Income taxes come to local governments a year after you pay them, while property taxes paid are collected the same year. Both types of taxes support the work of the county and town governments, as well as township trustees, the library, the solid waste district and local schools.
“I think the tax anticipation warrant discussion is off the table,” Biddle said while talking about the CARES Act funding.
“I think it’s still on the table if we need to do it. I don’t think we’ll need to pull the trigger if we get these reimbursables in.”
Earlier in the meeting, Redding had asked Brown County Auditor Julia Reeves if her department had received any guidance from the state on reduction targets for the 2021 budget. Reeves said she not yet received any guidance, but “as they go forward, I’m sure we will.”
The council set the budget hearings for Aug. 17, 18 and 19. At those hearings, each department will come in to present their budget proposals and answer questions from the council members, who are working to make cuts. Those budgets are due to the auditor on July 10.
A guidance letter on what targets to aim for will go out to department heads from the council next month.
Biddle said that the county’s financial adviser, Baker Tilly, and Jacque Clements, with the Association of Indiana Counties, are also looking at the county’s budgets ahead of those hearings and will most likely have updates on targets.
Redding had said that he heard a rumor that potential impact to taxes, like property taxes and other levies, could be a 15- or 20-percent decrease.
Biddle said that during a conference call with the Office of Management and Budget for the state, it was stated that local income tax would not be affected until 2022, since the numbers used for LIT disbursement are based on two years prior. For example, this year’s 2020 LIT budget is based on numbers from 2018, Biddle said.
“We will probably be seeing legislative fixes to those shortfalls before it comes to us. I don’t think either one of those will be as big of a hit as we think they will be,” she said.
To start applying for reimbursement money, a small group of county employees and officials must first go through claims submitted to the auditor from the first of March until now to separate them out per department. Then, those department heads will be tasked with figuring out which expenses are directly related to the COVID-19 response, like buying hand sanitizer, Plexiglass and other cleaning supplies.
Brown County Emergency Management Director Susan Armstrong also received a grant from the Federal Emergency Management Agency, but that grant would only cover 75 percent of the expenses, whereas the CARES Act money would cover them completely. Money from the CARES Act cannot be used to match the FEMA grant, so the county will focus on getting CARES Act reimbursements first, Biddle said.
Unexpected expenses related to COVID-19 from the health department, emergency management, law enforcement, 911 dispatch, information technology and the coroner are all reimbursable.
Additional COVID-19 expenses for the election also can be covered by the CARES Act.
“The only thing it can’t be used to offset is lost revenue. Basically, anything that we can justify as being an expense that we did not budget for and it’s an eligible expense,” Biddle said, adding that payroll expenses could also be reimbursed.
In April, the Brown County Commissioners approved extending the period of time county employees have to take their vacation and comp time.
“Comp time is something we can go back and pay. We may have to pay the employee first and then get the reimbursement, but certainly, the comp time that is accumulated within some departments can be paid for through the CARES Act,” Biddle said.
Once the claims have been reviewed, Biddle said the goal would be look at future claims as they come in for the commissioners meeting every two weeks to see if any other eligible expenses are there. The county has until Dec. 31 to get anything reimbursed.
Money that the state received from the CARES Act was allocated to counties and towns based on their population and the size of the county.
“That’s not money that goes into our pot. That is a sum of money that is reserved in a bucket that we have to apply for and prove that we have expenses that meet those requirements for reimbursements, so if we don’t use it, we don’t use it,” Biddle said.
She does not believe the county will have enough eligible expenses to use all of the $494,000 it is allowed.
As another part of the good news shared in the May 18 meeting, Biddle said that cumulative tax collections as of May 15 were sitting at $6,383,000 for the spring collection. “The treasurer wanted me to let you know that a lot of people are paying both of their installments, spring and fall. The collections are not that far behind what our traditional collections are,” Biddle said.
The county will still receive its first property tax settlement in June, even though homeowners now have until July 10 to pay their property taxes without being penalized. Biddle said the state has not decided if it will do an additional settlement of payments received after the end of the May.
The council also learned that the county would be receiving $1.3 million from its portion of LIT that is held back at the state level every year. The state holds back 15 percent of that money to create a supplemental fund at the state level, Biddle said.
“All great news,” Redding said.
Biddle said that after learning about the additional funding available to the county, and that property tax collections were still on track, she felt better heading into preparing the county’s budget for 2021.
“There will be some places where we will have some shortfalls, but I would expect the governor to bring the legislators back to the table somehow later this fall,” she said, noting that next year is a budget year for legislators at the Statehouse.
“I kind of see the state taking care of a lot of this stuff before it hits us — not so much that we’re cutting anything (from our budget), but maybe lots of belt tightening would be a good way to put that.”
Commissioners President Jerry Pittman was also listening to the Zoom meeting of the council on May 18.
“I think this may not turn out as bad as we first thought. With the reimbursements we’re going to get, and the state working with us the way they appear they’re going to, we may come out of this not nearly in bad of shape as we first thought,” he said.
“There’s a lot of good news tonight.”
