Sebastian County sets aside $10 million in more flexible covid funds
US bailout money
The US Treasury Department has distributed more than $245 billion to state, local and tribal governments through the State and Local Fiscal Recovery Funds program since Jan. 6.
Source: US Treasury Department
FORT SMITH — The Sebastian County judge said his office will work with elected officials to determine how to spend the county’s U.S. bailout money in the coming months.
The Court of Quorum unanimously approved the creation of the American Rescue Plan Act Income Replacement Fund within the county’s general fund at its meeting on Tuesday. The fund, which was recommended by County Judge David Hudson, will allow the county to track the use of $10 million provided through the US bailout, according to the order.
Hudson said the county received $24.8 million in bailout funds. The US Treasury Department issued a rule on Jan. 6 giving state and local governments more flexibility and clarity in how they can use the money, according to a department press release. The rule comes into effect on April 1 to allow governments to focus on responding to the covid-19 pandemic and maximizing the impact of the money.
Among the provisions of the rule is the option to choose a standard $10 million allowance to address revenue loss due to the public health emergency or to do a full revenue loss calculation. Those who choose the $10 million can then use that amount for government services, as the rule provides.
Hudson explained Friday that the county estimated the $10 million would be more money than it could squeeze out of the compute option.
Hudson said Tuesday it would be in the county’s interest to use that standard. That would leave the county about $14 million to use under the more restrictive guidelines of the state and local fiscal stimulus fund program.
“So the challenge for this agency, for our office, for public servants, is going to be how do we set priorities for spending $10 million that is for general government services, and how do we set options on how to spend those $14 million,” Hudson said.
The order that the quorum court passed on Tuesday states that money transferred to the new fund can be used for county government services which include, but are not limited to, the construction and maintenance of roads and bridges, other infrastructure projects, public safety, the purchase of government vehicles. and county equipment and administration costs.
“Income replacement funds may not be used to make an extraordinary contribution to a pension fund; for debt service; to replenish the county’s financial reserves; for settlements or judgments or for any project that enters conflict with or contravene the purpose of the American Rescue Plan Act,” the order states. “Appropriate records and documentation should be kept on the use of these funds for federal audit purposes.”
Hudson said the Arkansas County Judges’ and Treasurers’ Associations will have more information about where the bailout money will be used.
“So I think we need more time, I think, to develop an outline of how we would approach working with the court to review and prioritize the use of those dollars,” Hudson said. “And that has to be considered along with the other funds we have.”
Josh Curtis, director of government affairs for the Arkansas Association of Counties, said Friday the organization expects a majority of counties to use the standard $10 million allocation because it would allow more flexibility for spend that money on general government services.
This all comes after Sebastian County had a positive 2021 when it comes to its budget. A budget summary for the year under review on Tuesday lists county spending at more than $25.2 million against revenues of just under $28 million, giving a balance of more than $2.7 million. dollars.
The county spent less than $500,000 of its bailout money last year to provide a bonus to county employees, according to Hudson. This included an additional $1,000 for all full-time employees and $500 for part-time employees. The elected officials did not receive a bonus.