HomeMy WebLinkAbout08-10-2020-SWSAGENDA ITEMS
Coronavirus Relief Funds Discussion
Gayle Bauman, Finance Director
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B.PDF
ATTACHMENT C.PDF
Lake Johanna Fire Department Station Cities Agreement Update
Dave Perrault, City Administrator
MEMO.PDF
ATTACHMENT A.PDF
ATTACHMENT B.PDF
COUNCIL/STAFF COMMENTS
ADJOURN
Mayor:
David Grant
Councilmembers:
Brenda Holden
Fran Holmes
Dave McClung
Steve Scott
Special City Council
Work Session Agenda
August 10, 2020
4:30 p.m.
City Hall
Address:
1245 W Highway 96
Arden Hills MN 55112
Phone:
651 -792 -7800
Website :
www.cityofardenhills.org
City Vision
Arden Hills is a strong community that values its unique environmental setting, strong residential
neighborhoods, vital business community, well -maintained infrastructure, fiscal soundness, and our
long -standing tradition as a desirable City in which to live, work, and play.
This meeting can be accessed remotely by joining via Zoom
T o join the Zoom Meeting via your computer, click this link (or copy and paste it
into a new browser): https://us02web.zoom.us/j/87695775952
CALL TO ORDER
1.
1.A.
Documents:
1.B.
Documents:
2.
AGENDA ITEM – 1A
MEMORANDUM
DATE: August 10, 2020
TO: Honorable Mayor and City Councilmembers
Dave Perrault, City Administrator
FROM: Gayle Bauman, Finance Director
Mike Mrosla, Community Development Manager/City Planner
SUBJECT: Coronavirus Relief Funds discussion
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
Council Should Consider
Receive information on the background, restrictions and opportunities of the Coronavirus Aid,
Relief, and Economic Security (CARES) Act funding now available to the City of Arden Hills and
provide feedback.
Background
On June 25 Governor Tim Walz announced a plan to distribute $853 million in federal funding to
Minnesota communities impacted by the COVID-19 pandemic. The funding was authorized by
the federal CARES Act. City funding was calculated on a formula of $75.34 per capita and the
amount allocated to the City of Arden Hills totals $745,040. The City submitted its certification
form for Coronavirus Relief Fund (CRF) monies on July 6. The funds are now available and the
City is required to expend all of its funds by November 15, 2020. Any aid amounts remaining
unexpended must be granted to Regions Hospital or another eligible hospital in the county’s
boundaries. Staff is still awaiting a response to the question of what constitutes an eligible hospital.
Discussion
The US Department of Treasury has issued its CRF guidance and FAQs which have, and will
continue to be updated over time. Copies of the most recent guidance and FAQs are attached
(Attachment A).
From the federal and state guidance we can determine:
• Funds cannot be used to cover revenue lost due to the COVID-19 pandemic. CARES funding
utilized by the City can only be used to offset expenses incurred due to the pandemic.
• Funds can be used to pay direct costs related to our COVID-19 public health emergency
response (e.g., PPE, Plexiglas barriers, sanitation supplies and services).
• To enable compliance with COVID-19 public health precautions, funds may be used to improve
telework capabilities for public employees.
• Funds may be used to cover payroll expenses for certain employees whose services are
substantially dedicated to mitigating or responding to the COVID-19 public health emergency.
• To enable compliance with COVID-19 public health precautions, funds may be used to provide
paid sick and paid family and medical leave to public employees.
• Unemployment insurance costs related to the COVID-19 public health emergency if such costs
will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
• Funds can be used to support business assistance programs aimed specifically at COVID-19
related business impacts.
City staff is breaking down this discussion into three different areas – residents, businesses and the
city.
Residents
Roseville is the only adjacent community we currently know about that is offering assistance to
residents via CARES Act funds. The majority of communities are referring residents to the
county’s program mentioned below and are waiting to see if Congress extends existing COVID-19
benefits. Staff would recommend following this approach of directing residents to the Ramsey
County program already in place.
Ramsey County is providing financial assistance to county residents who have lost income due to
COVID-19 and need help paying for housing costs. Residents may be eligible for Emergency
Assistance that can help pay for past due rent/mortgage, a damage deposit, or prevent utilities
including water, electricity and heat from being disconnected. Adults with children and those who
are pregnant can receive up to $5,500 in housing assistance; single adults can received up to $3,000
in housing assistance; and families and single adults can receive up to $3,000 in utility assistance.
Expanded eligibility requirements and increased maximum dollar limits for those seeking help have
been made possible through federal funds received by the county through the Coronavirus Aid,
Relief and Economic Security (CARES) Act.
Businesses
The State of Minnesota and Ramsey County have provided funding opportunities to businesses that
have been impacted by COVID-19. Due to demand, the programs were oversubscribed and many
businesses did not meet eligibility requirements imposed by the various programs. According to
City data, Arden Hills has approximately 150 businesses. Ramsey County has provided funding to
seven (7) Arden Hills businesses and it is unknown at this time if any local businesses received
assistance from the State.
There is an opportunity for the City to utilize CARES Act funds to provide additional financial
assistance to local small businesses that have been directly impacted by the COVID-19 public
health emergency and the Governor’s related Emergency Executive Orders. The intent of the grant
program would be to provide financial assistance to local businesses to help them continue their
operations, preserve employment, and prevent business closures in an effort to encourage long-
term economic vitality in Arden Hills. Staff is proposing the utilization of $150,000 from CARES
Act funding to support such a program. Included for review are draft policy guidelines for the
proposed assistance program and staff is looking for additional guidance from Council on the
programs requirements (Attachment B).
The presumption is that the City’s Economic Development Authority will need to approve and
administer any business assistance program we may undertake. Tonight staff needs council to
provide guidance on the program parameters so a final business assistance program can be
developed.
City
The City is eligible to use funds to cover costs that are necessary expenditures incurred due to the
public health emergency with respect to the Coronavirus Disease 2019 (COVID-19). The City has
already incurred some costs related to personal protective equipment (PPE), disinfectants, cleaning,
technology, work space, personnel and unemployment costs. Attachment C is a listing of known
reimbursable items to date, which will be updated as needed. The City has also been provided a
list of costs that have been or will be incurred by Lake Johanna Fire Department. The city’s portion
of these costs is eligible to be reimbursed with CRF funds.
Proposed CARES Funding Use
CARES Allocation $ 745,040
City Direct Costs to date $ (48,492)
LJFD YTD Direct Costs (city portion) $ (4,100)
Business Subsidy Program $ (150,000)
Human Services payroll cost estimate $ (30,000)
Amount remaining for Public Safety
costs or other eligible items $ 512,449
These costs are not final and will be updated as needed.
A one person per vehicle policy has been instituted in our COVID-19 Preparedness Plan. It is
anticipated that very shortly the public works department will be fully staffed. The CRF funds
could be utilized to purchase a truck in order to help comply with these social distancing guidelines.
When the pandemic does finally come to an end, staff would presume that this vehicle could
prolong the need to replace a building inspector’s vehicle in a few years.
The one other area where cities are eligible for reimbursement is payroll expenses for public safety,
public health, health care, human services, and similar employees whose services are substantially
dedicated to mitigating or responding to the COVID-19 public health emergency.
In the human services area, the guidance allows for a percentage of the City Administrators time to
be covered. He has been the main point person at the City for Coronavirus and has and will continue
to dedicate many hours to the pandemic issue.
In the area of public safety, guidance points to the conclusion that payroll expenses for public safety
employees are eligible for reimbursement so long as Covid-19 Public Health Emergency responses
or mitigation impacts are more than minimal in the completion of their duties. This would most
likely apply to patrol and traffic officers with Ramsey County and medical calls with Lake Johanna
Fire Department. City staff will continue to work with other contract cities to determine the best
course action related to payroll expense coverage. The League encourages cities to document the
reasons the expenses were determined to satisfy the criteria and these findings can be used later to
explain decisions to auditors and show the council’s careful consideration.
City staff would recommend to prioritize the use of CRF funds as follows:
1. City direct out of pocket costs
2. LJFD direct out of pocket costs (this actually falls into City direct costs)
3. Small business grants
4. Payroll costs
Reporting
Since the funding is coming from the federal government, there are strict rules regarding its use.
The City will be required to report expenditures to the state monthly, beginning in September, using
an online portal. The state will compile information from all governmental agencies and make
information available to the public. The City will be subject to a “single audit” at the end of the
year to confirm the proper use of the funds if it receives total federal funds of $750,000 or more
during the year.
Budget Impact
COVID-19 mitigation efforts have led to increased costs and have required the reallocation of
resources to respond to the emerging threat. The federal government has allocated CRF funding to
help address local financial burdens caused by COVID-19.
The City continues to monitor estimates for revenue losses related to COVID-19. The revenue
losses currently appear to be mainly in the areas of parks, recreation, rentals, and utilities.
Attachments
A. US Treasury Guidance and FAQs
B. Small Business Emergency Assistance Grant Program Parameters
C. Listing of Reimbursable Items
1
Coronavirus Relief Fund
Guidance for State, Territorial, Local, and Tribal Governments
Updated June 30, 2020 1
The purpose of this document is to provide guidance to recipients of the funding available under section
601(a) of the Social Security Act, as added by section 5001 of the Coronavirus Aid, Relief, and Economic
Security Act (“CARES Act”). The CARES Act established the Coronavirus Relief Fund (the “Fund”)
and appropriated $150 billion to the Fund. Under the CARES Act, the Fund is to be used to make
payments for specified uses to States and certain local governments; the District of Columbia and U.S.
Territories (consisting of the Commonwealth of Puerto Rico, the United States Virgin Islands, Guam,
American Samoa, and the Commonwealth of the Northern Mariana Islands); and Tribal governments.
The CARES Act provides that payments from the Fund may only be used to cover costs that—
1. are necessary expenditures incurred due to the public health emergency with respect to
the Coronavirus Disease 2019 (COVID–19);
2. were not accounted for in the budget most recently approved as of March 27, 2020 (the
date of enactment of the CARES Act) for the State or government; and
3. were incurred during the period that begins on March 1, 2020, and ends on December 30,
2020.2
The guidance that follows sets forth the Department of the Treasury’s interpretation of these limitations
on the permissible use of Fund payments.
Necessary expenditures incurred due to the public health emergency
The requirement that expenditures be incurred “due to” the public health emergency means that
expenditures must be used for actions taken to respond to the public health emergency. These may
include expenditures incurred to allow the State, territorial, local, or Tribal government to respond
directly to the emergency, such as by addressing medical or public health needs, as well as expenditures
incurred to respond to second-order effects of the emergency, such as by providing economic support to
those suffering from employment or business interruptions due to COVID-19-related business closures.
Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not
otherwise qualify under the statute. Although a broad range of uses is allowed, revenue replacement is
not a permissible use of Fund payments.
The statute also specifies that expenditures using Fund payments must be “necessary.” The Department
of the Treasury understands this term broadly to mean that the expenditure is reasonably necessary for its
intended use in the reasonable judgment of the government officials responsible for spending Fund
payments.
Costs not accounted for in the budget most recently approved as of March 27, 2020
The CARES Act also requires that payments be used only to cover costs that were not accounted for in
the budget most recently approved as of March 27, 2020. A cost meets this requirement if either (a) the
1 This version updates the guidance provided under “Costs incurred during the period that begins on March 1, 2020,
and ends on December 30, 2020”.
2 See Section 601(d) of the Social Security Act, as added by section 5001 of the CARES Act.
2
cost cannot lawfully be funded using a line item, allotment, or allocation within that budget or (b) the cost
is for a substantially different use from any expected use of funds in such a line item, allotment, or
allocation.
The “most recently approved” budget refers to the enacted budget for the relevant fiscal period for the
particular government, without taking into account subsequent supplemental appropriations enacted or
other budgetary adjustments made by that government in response to the COVID-19 public health
emergency. A cost is not considered to have been accounted for in a budget merely because it could be
met using a budgetary stabilization fund, rainy day fund, or similar reserve account.
Costs incurred during the period that begins on March 1, 2020, and ends on December 30, 2020
Finally, the CARES Act provides that payments from the Fund may only be used to cover costs that were
incurred during the period that begins on March 1, 2020, and ends on December 30, 2020 (the “covered
period”). Putting this requirement together with the other provisions discussed above, section 601(d) may
be summarized as providing that a State, local, or tribal government may use payments from the Fund
only to cover previously unbudgeted costs of necessary expenditures incurred due to the COVID–19
public health emergency during the covered period.
Initial guidance released on April 22, 2020, provided that the cost of an expenditure is incurred when the
recipient has expended funds to cover the cost. Upon further consideration and informed by an
understanding of State, local, and tribal government practices, Treasury is clarifying that for a cost to be
considered to have been incurred, performance or delivery must occur during the covered period but
payment of funds need not be made during that time (though it is generally expected that this will take
place within 90 days of a cost being incurred). For instance, in the case of a lease of equipment or other
property, irrespective of when payment occurs, the cost of a lease payment shall be considered to have
been incurred for the period of the lease that is within the covered period, but not otherwise.
Furthermore, in all cases it must be necessary that performance or delivery take place during the covered
period. Thus the cost of a good or service received during the covered period will not be considered
eligible under section 601(d) if there is no need for receipt until after the covered period has expired.
Goods delivered in the covered period need not be used during the covered period in all cases. For
example, the cost of a good that must be delivered in December in order to be available for use in January
could be covered using payments from the Fund. Additionally, the cost of goods purchased in bulk and
delivered during the covered period may be covered using payments from the Fund if a portion of the
goods is ordered for use in the covered period, the bulk purchase is consistent with the recipient’s usual
procurement policies and practices, and it is impractical to track and record when the items were used. A
recipient may use payments from the Fund to purchase a durable good that is to be used during the current
period and in subsequent periods if the acquisition in the covered period was necessary due to the public
health emergency.
Given that it is not always possible to estimate with precision when a good or service will be needed, the
touchstone in assessing the determination of need for a good or service during the covered period will be
reasonableness at the time delivery or performance was sought, e.g., the time of entry into a procurement
contract specifying a time for delivery. Similarly, in recognition of the likelihood of supply chain
disruptions and increased demand for certain goods and services during the COVID-19 public health
emergency, if a recipient enters into a contract requiring the delivery of goods or performance of services
by December 30, 2020, the failure of a vendor to complete delivery or services by December 30, 2020,
will not affect the ability of the recipient to use payments from the Fund to cover the cost of such goods
or services if the delay is due to circumstances beyond the recipient’s control.
3
This guidance applies in a like manner to costs of subrecipients. Thus, a grant or loan, for example,
provided by a recipient using payments from the Fund must be used by the subrecipient only to purchase
(or reimburse a purchase of) goods or services for which receipt both is needed within the covered period
and occurs within the covered period. The direct recipient of payments from the Fund is ultimately
responsible for compliance with this limitation on use of payments from the Fund.
Nonexclusive examples of eligible expenditures
Eligible expenditures include, but are not limited to, payment for:
1. Medical expenses such as:
• COVID-19-related expenses of public hospitals, clinics, and similar facilities.
• Expenses of establishing temporary public medical facilities and other measures to increase
COVID-19 treatment capacity, including related construction costs.
• Costs of providing COVID-19 testing, including serological testing.
• Emergency medical response expenses, including emergency medical transportation, related
to COVID-19.
• Expenses for establishing and operating public telemedicine capabilities for COVID-19-
related treatment.
2. Public health expenses such as:
• Expenses for communication and enforcement by State, territorial, local, and Tribal
governments of public health orders related to COVID-19.
• Expenses for acquisition and distribution of medical and protective supplies, including
sanitizing products and personal protective equipment, for medical personnel, police officers,
social workers, child protection services, and child welfare officers, direct service providers
for older adults and individuals with disabilities in community settings, and other public
health or safety workers in connection with the COVID-19 public health emergency.
• Expenses for disinfection of public areas and other facilities, e.g., nursing homes, in response
to the COVID-19 public health emergency.
• Expenses for technical assistance to local authorities or other entities on mitigation of
COVID-19-related threats to public health and safety.
• Expenses for public safety measures undertaken in response to COVID-19.
• Expenses for quarantining individuals.
3. Payroll expenses for public safety, public health, health care, human services, and similar
employees whose services are substantially dedicated to mitigating or responding to the COVID-
19 public health emergency.
4. Expenses of actions to facilitate compliance with COVID-19-related public health measures, such
as:
• Expenses for food delivery to residents, including, for example, senior citizens and other
vulnerable populations, to enable compliance with COVID-19 public health precautions.
• Expenses to facilitate distance learning, including technological improvements, in connection
with school closings to enable compliance with COVID-19 precautions.
• Expenses to improve telework capabilities for public employees to enable compliance with
COVID-19 public health precautions.
4
• Expenses of providing paid sick and paid family and medical leave to public employees to
enable compliance with COVID-19 public health precautions.
• COVID-19-related expenses of maintaining state prisons and county jails, including as relates
to sanitation and improvement of social distancing measures, to enable compliance with
COVID-19 public health precautions.
• Expenses for care for homeless populations provided to mitigate COVID-19 effects and
enable compliance with COVID-19 public health precautions.
5. Expenses associated with the provision of economic support in connection with the COVID-19
public health emergency, such as:
• Expenditures related to the provision of grants to small businesses to reimburse the costs of
business interruption caused by required closures.
• Expenditures related to a State, territorial, local, or Tribal government payroll support
program.
• Unemployment insurance costs related to the COVID-19 public health emergency if such
costs will not be reimbursed by the federal government pursuant to the CARES Act or
otherwise.
6. Any other COVID-19-related expenses reasonably necessary to the function of government that
satisfy the Fund’s eligibility criteria.
Nonexclusive examples of ineligible expenditures 3
The following is a list of examples of costs that would not be eligible expenditures of payments from the
Fund.
1. Expenses for the State share of Medicaid.4
2. Damages covered by insurance.
3. Payroll or benefits expenses for employees whose work duties are not substantially dedicated to
mitigating or responding to the COVID-19 public health emergency.
4. Expenses that have been or will be reimbursed under any federal program, such as the
reimbursement by the federal government pursuant to the CARES Act of contributions by States
to State unemployment funds.
5. Reimbursement to donors for donated items or services.
6. Workforce bonuses other than hazard pay or overtime.
7. Severance pay.
8. Legal settlements.
3 In addition, pursuant to section 5001(b) of the CARES Act, payments from the Fund may not be expended for an
elective abortion or on research in which a human embryo is destroyed, discarded, or knowingly subjected to risk of
injury or death. The prohibition on payment for abortions does not apply to an abortion if the pregnancy is the result
of an act of rape or incest; or in the case where a woman suffers from a physical disorder, physical injury, or
physical illness, including a life-endangering physical condition caused by or arising from the pregnancy itself, that
would, as certified by a physician, place the woman in danger of death unless an abortion is performed.
Furthermore, no government which receives payments from the Fund may discriminate against a health care entity
on the basis that the entity does not provide, pay for, provide coverage of, or refer for abortions.
4 See 42 C.F.R. § 433.51 and 45 C.F.R. § 75.306.
1
Coronavirus Relief Fund
Frequently Asked Questions
Updated as of July 8, 2020
The following answers to frequently asked questions supplement Treasury’s Coronavirus Relief Fund
(“Fund”) Guidance for State, Territorial, Local, and Tribal Governments, dated April 22, 2020,
(“Guidance”).1 Amounts paid from the Fund are subject to the restrictions outlined in the Guidance and
set forth in section 601(d) of the Social Security Act, as added by section 5001 of the Coronavirus Aid,
Relief, and Economic Security Act (“CARES Act”).
Eligible Expenditures
Are governments required to submit proposed expenditures to Treasury for approval?
No. Governments are responsible for making determinations as to what expenditures are necessary due to
the public health emergency with respect to COVID-19 and do not need to submit any proposed
expenditures to Treasury.
The Guidance says that funding can be used to meet payroll expenses for public safety, public health,
health care, human services, and similar employees whose services are substantially dedicated to
mitigating or responding to the COVID-19 public health emergency. How does a government
determine whether payroll expenses for a given employee satisfy the “substantially dedicated”
condition?
The Fund is designed to provide ready funding to address unforeseen financial needs and risks created by
the COVID-19 public health emergency. For this reason, and as a matter of administrative convenience
in light of the emergency nature of this program, a State, territorial, local, or Tribal government may
presume that payroll costs for public health and public safety employees are payments for services
substantially dedicated to mitigating or responding to the COVID-19 public health emergency, unless the
chief executive (or equivalent) of the relevant government determines that specific circumstances indicate
otherwise.
The Guidance says that a cost was not accounted for in the most recently approved budget if the cost is
for a substantially different use from any expected use of funds in such a line item, allotment, or
allocation. What would qualify as a “substantially different use” for purposes of the Fund eligibility?
Costs incurred for a “substantially different use” include, but are not necessarily limited to, costs of
personnel and services that were budgeted for in the most recently approved budget but which, due
entirely to the COVID-19 public health emergency, have been diverted to substantially different
functions. This would include, for example, the costs of redeploying corrections facility staff to enable
compliance with COVID-19 public health precautions through work such as enhanced sanitation or
enforcing social distancing measures; the costs of redeploying police to support management and
enforcement of stay-at-home orders; or the costs of diverting educational support staff or faculty to
develop online learning capabilities, such as through providing information technology support that is not
part of the staff or faculty’s ordinary responsibilities.
Note that a public function does not become a “substantially different use” merely because it is provided
from a different location or through a different manner. For example, although developing online
instruction capabilities may be a substantially different use of funds, online instruction itself is not a
substantially different use of public funds than classroom instruction.
1 The Guidance is available at https://home.treasury.gov/system/files/136/Coronavirus -Relief-Fund-Guidance-for-
State-Territorial-Local-and-Tribal-Governments.pdf.
2
May a State receiving a payment transfer funds to a local government?
Yes, provided that the transfer qualifies as a necessary expenditure incurred due to the public health
emergency and meets the other criteria of section 601(d) of the Social Security Act. Such funds would be
subject to recoupment by the Treasury Department if they have not been used in a manner consistent with
section 601(d) of the Social Security Act.
May a unit of local government receiving a Fund payment transfer funds to another unit of
government?
Yes. For example, a county may transfer funds to a city, town, or school district within the county and a
county or city may transfer funds to its State, provided that the transfer qualifies as a necessary
expenditure incurred due to the public health emergency and meets the other criteria of section 601(d) of
the Social Security Act outlined in the Guidance. For example, a transfer from a county to a constituent
city would not be permissible if the funds were intended to be used simply to fill shortfalls in government
revenue to cover expenditures that would not otherwise qualify as an eligible expenditure.
Is a Fund payment recipient required to transfer funds to a smaller, constituent unit of government
within its borders?
No. For example, a county recipient is not required to transfer funds to smaller cities within the county’s
borders.
Are recipients required to use other federal funds or seek reimbursement under other federal programs
before using Fund payments to satisfy eligible expenses?
No. Recipients may use Fund payments for any expenses eligible under section 601(d) of the Social
Security Act outlined in the Guidance. Fund payments are not required to be used as the source of
funding of last resort. However, as noted below, recipients may not use payments from the Fund to cover
expenditures for which they will receive reimbursement.
Are there prohibitions on combining a transaction supported with Fund payments with other CARES
Act funding or COVID-19 relief Federal funding?
Recipients will need to consider the applicable restrictions and limitations of such other sources of
funding. In addition, expenses that have been or will be reimbursed under any federal program, such as
the reimbursement by the federal government pursuant to the CARES Act of contributions by States to
State unemployment funds, are not eligible uses of Fund payments.
Are States permitted to use Fund payments to support state unemployment insurance funds generally?
To the extent that the costs incurred by a state unemployment insurance fund are incurred due to the
COVID-19 public health emergency, a State may use Fund payments to make payments to its respective
state unemployment insurance fund, separate and apart from such State’s obligation to the unemployment
insurance fund as an employer. This will permit States to use Fund payments to prevent expenses related
to the public health emergency from causing their state unemployment insurance funds to become
insolvent.
3
Are recipients permitted to use Fund payments to pay for unemployment insurance costs incurred by
the recipient as an employer?
Yes, Fund payments may be used for unemployment insurance costs incurred by the recipient as an
employer (for example, as a reimbursing employer) related to the COVID-19 public health emergency if
such costs will not be reimbursed by the federal government pursuant to the CARES Act or otherwise.
The Guidance states that the Fund may support a “broad range of uses” including payroll expenses for
several classes of employees whose services are “substantially dedicated to mitigating or responding to
the COVID-19 public health emergency.” What are some examples of types of covered employees?
The Guidance provides examples of broad classes of employees whose payroll expenses would be eligible
expenses under the Fund. These classes of employees include public safety, public health, health care,
human services, and similar employees whose services are substantially dedicated to mitigating or
responding to the COVID-19 public health emergency. Payroll and benefit costs associated with public
employees who could have been furloughed or otherwise laid off but who were instead repurposed to
perform previously unbudgeted functions substantially dedicated to mitigating or responding to the
COVID-19 public health emergency are also covered. Other eligible expenditures include payroll and
benefit costs of educational support staff or faculty responsible for developing online learning capabilities
necessary to continue educational instruction in response to COVID-19-related school closures. Please
see the Guidance for a discussion of what is meant by an expense that was not accounted for in the budget
most recently approved as of March 27, 2020.
In some cases, first responders and critical health care workers that contract COVID-19 are eligible
for workers’ compensation coverage. Is the cost of this expanded workers compensation coverage
eligible?
Increased workers compensation cost to the government due to the COVID-19 public health emergency
incurred during the period beginning March 1, 2020, and ending December 30, 2020, is an eligible
expense.
If a recipient would have decommissioned equipment or not renewed a lease on particular office space
or equipment but decides to continue to use the equipment or to renew the lease in order to respond to
the public health emergency, are the costs associated with continuing to operate the equipment or the
ongoing lease payments eligible expenses?
Yes. To the extent the expenses were previously unbudgeted and are otherwise consistent with section
601(d) of the Social Security Act outlined in the Guidance, such expenses would be eligible.
May recipients provide stipends to employees for eligible expenses (for example, a stipend to employees
to improve telework capabilities) rather than require employees to incur the eligible cost and submit for
reimbursement?
Expenditures paid for with payments from the Fund must be limited to those that are necessary due to the
public health emergency. As such, unless the government were to determine that providing assistance in
the form of a stipend is an administrative necessity, the government should provide such assistance on a
reimbursement basis to ensure as much as possible that funds are used to cover only eligible expenses.
4
May Fund payments be used for COVID-19 public health emergency recovery planning?
Yes. Expenses associated with conducting a recovery planning project or operating a recovery
coordination office would be eligible, if the expenses otherwise meet the criteria set forth in section
601(d) of the Social Security Act outlined in the Guidance.
Are expenses associated with contact tracing eligible?
Yes, expenses associated with contract tracing are eligible.
To what extent may a government use Fund payments to support the operations of private hospitals?
Governments may use Fund payments to support public or private hospitals to the extent that the costs are
necessary expenditures incurred due to the COVID-19 public health emergency, but the form such
assistance would take may differ. In particular, financial assistance to private hospitals could take the
form of a grant or a short-term loan.
May payments from the Fund be used to assist individuals with enrolling in a government benefit
program for those who have been laid off due to COVID-19 and thereby lost health insurance?
Yes. To the extent that the relevant government official determines that these expenses are necessary and
they meet the other requirements set forth in section 601(d) of the Social Security Act outlined in the
Guidance, these expenses are eligible.
May recipients use Fund payments to facilitate livestock depopulation incurred by producers due to
supply chain disruptions?
Yes, to the extent these efforts are deemed necessary for public health reasons or as a form of economic
support as a result of the COVID-19 health emergency.
Would providing a consumer grant program to prevent eviction and assist in preventing homelessness
be considered an eligible expense?
Yes, assuming that the recipient considers the grants to be a necessary expense incurred due to the
COVID-19 public health emergency and the grants meet the other requirements for the use of Fund
payments under section 601(d) of the Social Security Act outlined in the Guidance. As a general matter,
providing assistance to recipients to enable them to meet property tax requirements would not be an
eligible use of funds, but exceptions may be made in the case of assistance designed to prevent
foreclosures.
May recipients create a “payroll support program” for public employees?
Use of payments from the Fund to cover payroll or benefits expenses of public employees are limited to
those employees whose work duties are substantially dedicated to mitigating or responding to the
COVID-19 public health emergency.
May recipients use Fund payments to cover employment and training programs for employees that
have been furloughed due to the public health emergency?
Yes, this would be an eligible expense if the government determined that the costs of such employment
and training programs would be necessary due to the public health emergency.
5
May recipients use Fund payments to provide emergency financial assistance to individuals and
families directly impacted by a loss of income due to the COVID-19 public health emergency?
Yes, if a government determines such assistance to be a necessary expenditure. Such assistance could
include, for example, a program to assist individuals with payment of overdue rent or mortgage payments
to avoid eviction or foreclosure or unforeseen financial costs for funerals and other emergency individual
needs. Such assistance should be structured in a manner to ensure as much as possible, within the realm
of what is administratively feasible, that such assistance is necessary.
The Guidance provides that eligible expenditures may include expenditures related to the provision of
grants to small businesses to reimburse the costs of business interruption caused by required closures.
What is meant by a “small business,” and is the Guidance intended to refer only to expenditures to
cover administrative expenses of such a grant program?
Governments have discretion to determine what payments are necessary. A program that is aimed at
assisting small businesses with the costs of business interruption caused by required closures should be
tailored to assist those businesses in need of such assistance. The amount of a grant to a small business to
reimburse the costs of business interruption caused by required closures would also be an eligible
expenditure under section 601(d) of the Social Security Act, as outlined in the Guidance.
The Guidance provides that expenses associated with the provision of economic support in connection
with the public health emergency, such as expenditures related to the provision of grants to small
businesses to reimburse the costs of business interruption caused by required closures, would
constitute eligible expenditures of Fund payments. Would such expenditures be eligible in the absence
of a stay-at-home order?
Fund payments may be used for economic support in the absence of a stay-at-home order if such
expenditures are determined by the government to be necessary. This may include, for example, a grant
program to benefit small businesses that close voluntarily to promote social distancing measures or that
are affected by decreased customer demand as a result of the COVID-19 public health emergency.
May Fund payments be used to assist impacted property owners with the payment of their property
taxes?
Fund payments may not be used for government revenue replacement, including the provision of
assistance to meet tax obligations.
May Fund payments be used to replace foregone utility fees? If not, can Fund payments be used as a
direct subsidy payment to all utility account holders?
Fund payments may not be used for government revenue replacement, including the replacement of
unpaid utility fees. Fund payments may be used for subsidy payments to electricity account holders to the
extent that the subsidy payments are deemed by the recipient to be necessary expenditures incurred due to
the COVID-19 public health emergency and meet the other criteria of section 601(d) of the Social
Security Act outlined in the Guidance. For example, if determined to be a necessary expenditure, a
government could provide grants to individuals facing economic hardship to allow them to pay their
utility fees and thereby continue to receive essential services.
6
Could Fund payments be used for capital improvement projects that broadly provide potential
economic development in a community?
In general, no. If capital improvement projects are not necessary expenditures incurred due to the
COVID-19 public health emergency, then Fund payments may not be used for such projects.
However, Fund payments may be used for the expenses of, for example, establishing temporary public
medical facilities and other measures to increase COVID-19 treatment capacity or improve mitigation
measures, including related construction costs.
The Guidance includes workforce bonuses as an example of ineligible expenses but provides that
hazard pay would be eligible if otherwise determined to be a necessary expense. Is there a specific
definition of “hazard pay”?
Hazard pay means additional pay for performing hazardous duty or work involving physical hardship, in
each case that is related to COVID-19.
The Guidance provides that ineligible expenditures include “[p]ayroll or benefits expenses for
employees whose work duties are not substantially dedicated to mitigating or responding to the
COVID-19 public health emergency.” Is this intended to relate only to public employees?
Yes. This particular nonexclusive example of an ineligible expenditure relates to public employees. A
recipient would not be permitted to pay for payroll or benefit expenses of private employees and any
financial assistance (such as grants or short-term loans) to private employers are not subject to the
restriction that the private employers’ employees must be substantially dedicated to mitigating or
responding to the COVID-19 public health emergency.
May counties pre-pay with CARES Act funds for expenses such as a one or two-year facility lease,
such as to house staff hired in response to COVID-19?
A government should not make prepayments on contracts using payments from the Fund to the extent that
doing so would not be consistent with its ordinary course policies and procedures.
Must a stay-at-home order or other public health mandate be in effect in order for a government to
provide assistance to small businesses using payments from the Fund?
No. The Guidance provides, as an example of an eligible use of payments from the Fund, expenditures
related to the provision of grants to small businesses to reimburse the costs of business interruption
caused by required closures. Such assistance may be provided using amounts received from the Fund in
the absence of a requirement to close businesses if the relevant government determines that such
expenditures are necessary in response to the public health emergency.
7
Should States receiving a payment transfer funds to local governments that did not receive payments
directly from Treasury?
Yes, provided that the transferred funds are used by the local government for eligible expenditures under
the statute. To facilitate prompt distribution of Title V funds, the CARES Act authorized Treasury to
make direct payments to local governments with populations in excess of 500,000, in amounts equal to
45% of the local government’s per capita share of the statewide allocation. This statutory structure was
based on a recognition that it is more administratively feasible to rely on States, rather than the federal
government, to manage the transfer of funds to smaller local governments. Consistent with the needs of
all local governments for funding to address the public health emergency, States should transfer funds to
local governments with populations of 500,000 or less, using as a benchmark the per capita allocation
formula that governs payments to larger local governments. This approach will ensure equitable
treatment among local governments of all sizes.
For example, a State received the minimum $1.25 billion allocation and had one county with a population
over 500,000 that received $250 million directly. The State should distribute 45 percent of the $1 billion
it received, or $450 million, to local governments within the State with a population of 500,000 or less.
May a State impose restrictions on transfers of funds to local governments?
Yes, to the extent that the restrictions facilitate the State’s compliance with the requirements set forth in
section 601(d) of the Social Security Act outlined in the Guidance and other applicable requirements such
as the Single Audit Act, discussed below. Other restrictions are not permissible.
If a recipient must issue tax anticipation notes (TANs) to make up for tax due date deferrals or revenue
shortfalls, are the expenses associated with the issuance eligible uses of Fund payments?
If a government determines that the issuance of TANs is necessary due to the COVID-19 public health
emergency, the government may expend payments from the Fund on the interest expense payable on
TANs by the borrower and unbudgeted administrative and transactional costs, such as necessary
payments to advisors and underwriters, associated with the issuance of the TANs.
May recipients use Fund payments to expand rural broadband capacity to assist with distance learning
and telework?
Such expenditures would only be permissible if they are necessary for the public health emergency. The
cost of projects that would not be expected to increase capacity to a significant extent until the need for
distance learning and telework have passed due to this public health emergency would not be necessary
due to the public health emergency and thus would not be eligible uses of Fund payments.
Are costs associated with increased solid waste capacity an eligible use of payments from the Fund?
Yes, costs to address increase in solid waste as a result of the public health emergency, such as relates to
the disposal of used personal protective equipment, would be an eligible expenditure.
May payments from the Fund be used to cover across-the-board hazard pay for employees working
during a state of emergency?
No. The Guidance says that funding may be used to meet payroll expenses for public safety, public
health, health care, human services, and similar employees whose services are substantially dedicated to
mitigating or responding to the COVID-19 public health emergency. Hazard pay is a form of payroll
expense and is subject to this limitation, so Fund payments may only be used to cover hazard pay for such
individuals.
8
May Fund payments be used for expenditures related to the administration of Fund payments by a
State, territorial, local, or Tribal government?
Yes, if the administrative expenses represent an increase over previously budgeted amounts and are
limited to what is necessary. For example, a State may expend Fund payments on necessary
administrative expenses incurred with respect to a new grant program established to disburse amounts
received from the Fund.
May recipients use Fund payments to provide loans?
Yes, if the loans otherwise qualify as eligible expenditures under section 601(d) of the Social Security Act
as implemented by the Guidance. Any amounts repaid by the borrower before December 30, 2020, must
be either returned to Treasury upon receipt by the unit of government providing the loan or used for
another expense that qualifies as an eligible expenditure under section 601(d) of the Social Security Act.
Any amounts not repaid by the borrower until after December 30, 2020, must be returned to Treasury
upon receipt by the unit of government lending the funds.
May Fund payments be used for expenditures necessary to prepare for a future COVID-19 outbreak?
Fund payments may be used only for expenditures necessary to address the current COVID-19 public
health emergency. For example, a State may spend Fund payments to create a reserve of personal
protective equipment or develop increased intensive care unit capacity to support regions in its
jurisdiction not yet affected, but likely to be impacted by the current COVID-19 pandemic.
May funds be used to satisfy non-federal matching requirements under the Stafford Act?
Yes, payments from the Fund may be used to meet the non-federal matching requirements for Stafford
Act assistance to the extent such matching requirements entail COVID-19-related costs that otherwise
satisfy the Fund’s eligibility criteria and the Stafford Act. Regardless of the use of Fund payments for
such purposes, FEMA funding is still dependent on FEMA’s determination of eligibility under the
Stafford Act.
Must a State, local, or tribal government require applications to be submitted by businesses or
individuals before providing assistance using payments from the Fund?
Governments have discretion to determine how to tailor assistance programs they establish in response to
the COVID-19 public health emergency. However, such a program should be structured in such a manner
as will ensure that such assistance is determined to be necessary in response to the COVID-19 public
health emergency and otherwise satisfies the requirements of the CARES Act and other applicable law.
For example, a per capita payment to residents of a particular jurisdiction without an assessment of
individual need would not be an appropriate use of payments from the Fund.
May Fund payments be provided to non-profits for distribution to individuals in need of financial
assistance, such as rent relief?
Yes, non-profits may be used to distribute assistance. Regardless of how the assistance is structured, the
financial assistance provided would have to be related to COVID-19.
May recipients use Fund payments to remarket the recipient’s convention facilities and tourism
industry?
Yes, if the costs of such remarketing satisfy the requirements of the CARES Act. Expenses incurred to
publicize the resumption of activities and steps taken to ensure a safe experience may be needed due to
9
the public health emergency. Expenses related to developing a long-term plan to reposition a recipient’s
convention and tourism industry and infrastructure would not be incurred due to the public health
emergency and therefore may not be covered using payments from the Fund.
May a State provide assistance to farmers and meat processors to expand capacity, such to cover
overtime for USDA meat inspectors?
If a State determines that expanding meat processing capacity, including by paying overtime to USDA
meat inspectors, is a necessary expense incurred due to the public health emergency, such as if increased
capacity is necessary to allow farmers and processors to donate meat to food banks, then such expenses
are eligible expenses, provided that the expenses satisfy the other requirements set forth in section 601(d)
of the Social Security Act outlined in the Guidance.
The guidance provides that funding may be used to meet payroll expenses for public safety, public
health, health care, human services, and similar employees whose services are substantially dedicated
to mitigating or responding to the COVID-19 public health emergency. May Fund payments be used to
cover such an employee’s entire payroll cost or just the portion of time spent on mitigating or
responding to the COVID-19 public health emergency?
As a matter of administrative convenience, the entire payroll cost of an employee whose time is
substantially dedicated to mitigating or responding to the COVID-19 public health emergency is eligible,
provided that such payroll costs are incurred by December 30, 2020. An employer may also track time
spent by employees related to COVID-19 and apply Fund payments on that basis but would need to do so
consistently within the relevant agency or department.
May Fund payments be used to cover increased administrative leave costs of public employees
who could not telework in the event of a stay at home order or a case of COVID-19 in the
workplace?
The statute requires that payments be used only to cover costs that were not accounted for in the
budget most recently approved as of March 27, 2020. As stated in the Guidance, a cost meets
this requirement if either (a) the cost cannot lawfully be funded using a line item, allotment, or
allocation within that budget or (b) the cost is for a substantially different use from any expected
use of funds in such a line item, allotment, or allocation. If the cost of an employee was
allocated to administrative leave to a greater extent than was expected, the cost of such
administrative leave may be covered using payments from the Fund.
Questions Related to Administration of Fund Payments
Do governments have to return unspent funds to Treasury?
Yes. Section 601(f)(2) of the Social Security Act, as added by section 5001(a) of the CARES Act,
provides for recoupment by the Department of the Treasury of amounts received from the Fund that have
not been used in a manner consistent with section 601(d) of the Social Security Act. If a government has
not used funds it has received to cover costs that were incurred by December 30, 2020, as required by the
statute, those funds must be returned to the Department of the Treasury.
What records must be kept by governments receiving payment?
10
A government should keep records sufficient to demonstrate that the amount of Fund payments to the
government has been used in accordance with section 601(d) of the Social Security Act.
May recipients deposit Fund payments into interest bearing accounts?
Yes, provided that if recipients separately invest amounts received from the Fund, they must use the
interest earned or other proceeds of these investments only to cover expenditures incurred in accordance
with section 601(d) of the Social Security Act and the Guidance on eligible expenses. If a government
deposits Fund payments in a government’s general account, it may use those funds to meet immediate
cash management needs provided that the full amount of the payment is used to cover necessary
expenditures. Fund payments are not subject to the Cash Management Improvement Act of 1990, as
amended.
May governments retain assets purchased with payments from the Fund?
Yes, if the purchase of the asset was consistent with the limitations on the eligible use of funds provided
by section 601(d) of the Social Security Act.
What rules apply to the proceeds of disposition or sale of assets acquired using payments from the
Fund?
If such assets are disposed of prior to December 30, 2020, the proceeds would be subject to the
restrictions on the eligible use of payments from the Fund provided by section 601(d) of the Social
Security Act.
Are Fund payments to State, territorial, local, and tribal governments considered grants?
No. Fund payments made by Treasury to State, territorial, local, and Tribal governments are not
considered to be grants but are “other financial assistance” under 2 C.F.R. § 200.40.
Are Fund payments considered federal financial assistance for purposes of the Single Audit Act?
Yes, Fund payments are considered to be federal financial assistance subject to the Single Audit Act (31
U.S.C. §§ 7501-7507) and the related provisions of the Uniform Guidance, 2 C.F.R. § 200.303 regarding
internal controls, §§ 200.330 through 200.332 regarding subrecipient monitoring and management, and
subpart F regarding audit requirements.
Are Fund payments subject to other requirements of the Uniform Guidance?
Fund payments are subject to the following requirements in the Uniform Guidance (2 C.F.R. Part 200): 2
C.F.R. § 200.303 regarding internal controls, 2 C.F.R. §§ 200.330 through 200.332 regarding subrecipient
monitoring and management, and subpart F regarding audit requirements.
Is there a Catalog of Federal Domestic Assistance (CFDA) number assigned to the Fund?
Yes. The CFDA number assigned to the Fund is 21.019.
If a State transfers Fund payments to its political subdivisions, would the transferred funds count
toward the subrecipients’ total funding received from the federal government for purposes of the
Single Audit Act?
Yes. The Fund payments to subrecipients would count toward the threshold of the Single Audit Act and 2
C.F.R. part 200, subpart F re: audit requirements. Subrecipients are subject to a single audit or program-
11
specific audit pursuant to 2 C.F.R. § 200.501(a) when the subrecipients spend $750,000 or more in federal
awards during their fiscal year.
Are recipients permitted to use payments from the Fund to cover the expenses of an audit conducted
under the Single Audit Act?
Yes, such expenses would be eligible expenditures, subject to the limitations set forth in 2 C.F.R. §
200.425.
If a government has transferred funds to another entity, from which entity would the Treasury
Department seek to recoup the funds if they have not been used in a manner consistent with section
601(d) of the Social Security Act?
The Treasury Department would seek to recoup the funds from the government that received the payment
directly from the Treasury Department. State, territorial, local, and Tribal governments receiving funds
from Treasury should ensure that funds transferred to other entities, whether pursuant to a grant program
or otherwise, are used in accordance with section 601(d) of the Social Security Act as implemented in the
Guidance.
1
Small Business Emergency Assistance Grant Program Parameters
Staff offers the following program parameters and is looking for additional guidance on all items,
specifically the highlighted items.
Grant amount:
1. How much of the CRF funding will be made available for this program? $________
2. What should the maximum amount grant ceiling per business be set at?
a. $10,000.00
b. $7,500.00
c. $5,000.00
d. Other
Eligibility Requirements: (these will be adjusted based on the option selected under #4 below)
1. The business must have been deemed non-essential by the State of Minnesota and/or have
faced mandated closure per State of Minnesota orders.
2. The business shall have a physical address (proof of address required) within the City.
3. Business shall be in operation long enough to demonstrate financial viability; and have
been subject to the State of Minnesota Emergency Executive Order 20-04 (March 16,
2020).
4. Language options for businesses that could be funded are (pick one):
a. All Arden Hills business who can demonstrate loss due to COVID-19.
b. All Arden Hills business who can demonstrate loss due to COVID-19 excluding
home-based businesses, self-employed, and individual contractors.
c. All Arden Hills businesses deemed nonessential under executive orders -
Restaurants, cafes, coffeehouses and other places of public accommodation
offering food or beverage for on-premises consumption. Gymnasiums, fitness
centers, indoor sports facilities, indoor exercise facilities, exercise studios,
businesses offering massage therapy or similar body work, spas, salons, nail salons,
cosmetology salons and barber shops. This includes, but is not limited to, all salons
and shops licensed by the Minnesota Board of Cosmetologist Examiners and the
Minnesota Board of Barber Examiners. Art, dance and music studios.
5. Language options for number of employees:
2
a. The business shall employ between __ and __ prior to the issuance of the State of
Minnesota Emergency Executive Order 20-04 (March 16, 2020).
i. Maximum number of employees ____ (40 to 50 employees is the average
used by other communities)
ii. Minimum number of employees ____ (Some cities do not have a minimum
and some have a minimum of 3 employees. The intent of a minimum
number of employees is to restrict home occupations from applying.)
6. All businesses shall be in good standing with the city.
a. All businesses shall be a conforming or a legally nonconforming use under the
current zoning regulations of the city.
b. Businesses shall not be in violation of the city’s zoning code.
c. Businesses shall not have delinquent taxes, bills or charges due to the City from
February 2020 or prior.
7. Applicants are strongly encouraged to claim all applicable private insurance and utilize all
other sources of applicable assistance available from other private and public sources,
including requests for rent/mortgage, utility and loan deferrals or forgiveness. Applicants
are also strongly encouraged to apply for emergency loans through the Small Business
Administration (SBA) and Minnesota Department of Employment and Economic
Development (DEED) prior to applying for this grant.
8. Applications must include proof of application submittal, acceptance, approval and/or
denial of state and federal emergency financing programs.
Non-eligibility Requirements:
1. Businesses that do not have a physical address within the City.
2. Businesses that derive income from passive investments without operational ties to
operating businesses within the City.
3. Businesses that primarily generate income from gambling activities.
4. Businesses that engage in activities prohibited by law.
5. Businesses that have no current or historical financial statements.
6. Businesses that earn revenue from pyramid schemes, lending services and/or day
trading/short term investments.
7. Businesses that previously received emergency funds from the city.
Program Guidelines
The Small Business Emergency Assistance Grant has the following terms and conditions:
1. Amount: Businesses may apply for a one-time emergency grant of up to $________.
Applicants should apply only for the amount that they can safely guarantee will be used
for the eligible uses found in paragraph 3, below.
2. Term: All grant awards must be utilized within two months of a grant contract being fully
executed.
3
3. General Grant Uses: Awarded funds may be used exclusively for working capital
purposes, defined as current payroll obligations (i.e. may not include employees who have
been laid off), lease or mortgage payments, utilities, accounts payable, property taxes and
other critical business expenses that can’t be paid as a direct result of the current health
emergency. Awarded funds may not be used for business owner’s/manager’s personal uses
or expenses.
4. Proof of Need: All applicants must demonstrate financial need for grant funds prior to
approval. This includes but is not limited to the previous year’s annual gross revenue,
average monthly gross revenue prior to COVID-19, and projected monthly gross revenue
for the next three months. Additionally, applicants are encouraged, but not required to
provide evidence of application submittal, acceptance, approval and/or denial of State and
federal emergency financing programs. This could simply include an email response from
these agencies.
5. Proof of Expenses: Applicant shall provide proof of eligible expense requested to be paid
with grant funds.
6. Reporting: As a condition for receiving grant funding, all grant recipients are required to
submit a brief report to the City within two months after receiving grant funds, specifying
how the entirety of the grant funds were utilized and providing evidence in the form of paid
invoices, statements, or similar documentation.
7. Grant Agreement for General Grants: Upon a successful general grant application being
awarded funds, the grant recipient shall enter into a Grant Agreement with the City of
Arden Hills, acknowledging the limitations on use of the funds. Funds will not be
distributed for any general grant award until a grant agreement has been executed by all
required parties.
8. Disbursement of Funds: Funds shall be distributed as soon as possible after a fully executed
grant agreement has been received.
9. Termination: The City of Arden Hills retains the right to terminate any agreement under
the Emergency Assistance Program if a grant recipient is found to be in violation of any
conditions set forth in the grant guidelines or grant agreement.
10. Right to Deny: The City of Arden Hills retains the right to deny any application for grant
funding for any reason.
11. Funding Availability: The Small Business Emergency Assistance Program has a limited
amount of general grant funds available. For general grants, awards will be provided on a
first-come, first-considered basis until the earlier of the date the fund is exhausted, or the
City-declared state of emergency is lifted.
12. Indemnification: All grant recipients shall be required to indemnify the City of Arden Hills,
and any officers acting on their behalf.
13. Minnesota Data Practices Disclaimer: While the City does not intend to proactively
display, share or advertise business financial information provided as part of the application
and review process, confidentiality of such data cannot be guaranteed and is subject to
Minnesota Data Practices Act with regard to public access to data.
Application Process
Application requirements will involve providing:
4
1. Basic details about the business: business name/type/sector, State Tax ID number.
2. Amount of general grant funding being requested.
3. Number of employees employed by the business as of March 16, 2020 and the number
as of the time of this application.
4. Information regarding operations during the COVID-19 pandemic/Stay-at-Home
executive order(s), including dates the business was required to be closed due to State of
Minnesota orders (actual or est. dates), whether the business is/was subsequently
operating under reduced services/capacity restrictions per State of Minnesota.
5. Proof of financial need: Examples include revenue/financial statements demonstrating
business impacts due to the COVID-19 pandemic and associated executive orders.
6. Proof of eligible expenses: Examples include proof of payroll expenses, paid/unpaid
business invoices, mortgage/rent/utility/statements, property taxes and/or other business-
related expenses.
7. Narrative descriptions and estimated calculations of the negative impacts on the business
due to COVID-19, including the operational effect of closure and subsequent
reopening/partial reopening of operations following the COVID-19 executive orders.
8. Information on the intended use of the grant funds and which eligible expenses will be
addressed with the funds.
9. Supporting documentation and application attachments.
10. If the business is not already registered as part of the City’s Business Registration
program, a completed registration must be submitted prior to funding disbursement.
11. Signature of owner and/or managing partner(s).
12. Fully completed and signed applications along with required documents.
13. Upon submission of application, applicants will receive an email confirming receipt of
application.
14. The application will be reviewed for eligibility upon receipt. If additional information or
documentation is necessary, staff will contact the applicant.
15. Funds for grants will be distributed on a first-come, first-considered/awarded basis.
Applications will be accepted until October 9, 2020 or when all general grant funds are
fully committed. Each general grant application will be considered independently in the
order received until funding is expended. Once all available funding has been expended,
any remaining eligible applications not receiving funding will be held and considered if
future funding rounds become available.
COVID‐19 Pandemic
City costs as of 8/5/2020
Liquor license reductions (5 weeks) 3,723.75
Unemployment costs (max amount based on current claims) 27,286.49
COVID leave 5,418.29
Cleaning/disinfecting supplies 1,642.28
Face masks/gloves/shoe covers 401.97
Office retrofit 804.59
Technology 7,565.99
Janitorial services 1,578.50
Miscellaneous supplies 69.99
Subtotoal 48,491.85
City's portion of LJFD costs incurred to date 4,099.54
52,591.39
Page 1 of 2
AGENDA ITEM – 1B
MEMORANDUM
DATE: August 10, 2020
TO: Honorable Mayor and City Councilmembers
FROM: Dave Perrault, City Administrator
SUBJECT: Lake Johanna Fire Department Station Cities Agreement Update
Budgeted Amount: Actual Amount: Funding Source:
N/A N/A N/A
For Council Consideration
The Council may consider providing further feedback on the draft three city agreement regarding
the Lake Johanna Fire Department (LJFD) station search.
Background
On July 13, 2020 The City Council discussed and provided direction regarding the LJFD cities
agreement that will be needed prior to moving forward with the acquisition of land off Pine Tree
Drive for a future fire station. The major changes that were made following that special work
session are noted below:
• (Section 2.3) The City Council agreed that one of the three cities, if needed, will bond for
the construction of the new station. Furthermore, future debt service payments on the
bonding will be made in accordance with the cost share formula, which is updated
annually.
• (Section 2.5) The no later than construction date will be June 30, 2026.
• (Section 2.7) The Council agreed to language regarding a successor organization utilizing
the station should LJFD cease to serve the cities.
These changes were preliminarily discussed with the LJFD Board, and there appeared to be
general agreement between the three cities. At the board meeting, additional language (section
Page 2 of 2
2.8) was requested regarding the sale of the land should the new station not move forward. This
language is included in the draft for tonight’s review.
If Council is comfortable with this updated agreement, the three cities will bring this document
forward for formal approvals. Following approval of the agreement, the fire department can
move forward with the land acquisition. The fire department is still in its due diligence phase
through August 21, 2020 and would need to close by September 21, 2020. Following the land
acquisition, the fire department would have a construction start date of no later than June 30,
2026; other than this date, there is not a timeline for construction of the new station.
The question was also raised regarding the accuracy of using Met Council population estimates
for the funding formula, a quick side by side comparison of Met Council estimates and the
Census Bureau estimates is below. If the Council wants to investigate other population estimates
it can be raised with the fire board for further discussion (note: the State Demographer’s Office
uses Met Council estimates for the metro area).
Met Council Census Bureau Difference Met Council Census Bureau Difference
2010 Census 2010 Census
2015 9,847 10,314 5%2015 26,092 26,418 1%
2016 9,966 10,344 4%2016 26,366 26,577 1%
2017 9,969 10,313 3%2017 26,447 26,640 1%
2018 9,889 10,275 4%2018 26,480 27,145 3%
2019 10,008 10,281 3%2019 26,695 27,130 2%
Shoreview
25,0439,552
Arden Hills
Budget Impact
If this agreement were to be approved, the City would be responsible for 24.8% of the cost of the
land acquisition and a portion of a future access road. The sale price of the land is $1,350,000
and the road cost for the LJFD is capped at $325,000, the LJFD is also proposing a $300,000
payment from their General Fund towards the land acquisition. The total cost to the cities would
be $1,375,000 ($1,350,000 + $325,000 - $300,000), with each City’s approximate share being:
Arden Hills (24.8%) $341,000, North Oaks (14.1%) $193,875, and Shoreview (61.1%)
$840,125.
Attachment
Attachment A: Redline Cities Agreement
Attachment B: Clean Cities Agreement
AGREEMENT BETWEEN
CITY OF SHOREVIEW, MINNESOTA,
CITY OF ARDEN HILLS, MINNESOTA,
AND
CITY OF NORTH OAKS, MINNESOTA
FOR
THE LAKE JOHANNA FIRE DEPARTMENT FIRE STATION PROJECT
THIS AGREEMENT is made and entered into the ___ day of __________, 2020 by and
between THE CITY OF SHOREVIEW, a municipal corporation and political subdivision of the
State of Minnesota, THE CITY OF ARDEN HILLS, a municipal corporation and political
subdivision of the State of Minnesota, and THE CITY OF NORTH OAKS, a municipal
corporation and political subdivision of the State of Minnesota (the three cities maybe referred to
as the “parties”)(hereinafter jointly referred to as the “Parties” and individually as each “City”)
(the “Agreement”).
RECITALS
WHEREAS, each City is responsible for providing fire protection and prevention
services for the people and institutions within its boundaries; and
WHEREAS, each City contracts with Lake Johanna Fire Department to provide each
City’s fire protection and preventions services; and
WHEREAS, the costs of said fire protection and prevention services are allocated
pursuant to contracted service agreements between the Cities Parties and Lake Johanna Fire
Department; and
WHEREAS, Lake Johanna Fire Department conducted a needs analysis that reviewed
the adequacy of Fire Station number 4 and identified future department facility needs; and
WHEREAS, the needs analysis concluded that the existing Fire Station number 4 located
at 3615 Victoria Street in the City of Shoreview, MN, was undersized and had many
deficiencies; and
WHEREAS, the needs analysis concluded that it would not be feasible to expand the
station, due to the limited lot size and subpar access to Victoria Street on the north of the railroad
tracks, andwhich may impact this location may impact response times; and
WHEREAS, Lake Johanna Fire Department reviewed potential property locations in
southern Shoreview and Arden Hills; and
WHEREAS, Lake Johanna Fire Department identified vacant property owned by Bethel
University on Pine Tree Drive in the City of Arden Hills, MN (“the Property”) as a potential site
for a new fire station; and
WHEREAS, the Property is large enough to accommodate headquarters for Lake
Johanna Fire Department and has improved access ideally situated to cover southern Arden Hills
and Shoreview as well as the entire service area for Lake Johanna Fire Department; and
2
WHEREAS, Lake Johanna Fire Department’s Board of Directors authorized the Fire
Chief to negotiate and execute a letter of intent to purchase the property from Bethel University;
and
WHEREAS, in early April 2020, Lake Johanna Fire Department and Bethel University
executed a letter of intent to purchase the Property for a purchase price of $1.35 million; and
WHEREAS, the letter of intent also requires Lake Johanna Fire Department to
contribute one third of the cost, up to a maximum of $325,000, to relocate an access road on the
propertyProperty;
WHEREAS, the purpose of this agreement is to define each City’s responsibilities for
the Lake Johanna Fire Department’s purchase of the Property and the construction of
improvements on the Property (“the Project”); and
WHEREAS, the new fire station would be owned and operated by the Lake Johanna Fire
Department to serve the three contract cities of Arden Hills, North Oaks, and Shoreview, the
Parties.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual undertakings herein expressed, the
City of Shoreview, the City of Arden Hills, and the City of North Oaks agree as follows:
1 Term of Agreement
1.1 Effective date: This Agreement and any amendments thereto shall be in full force and
effect upon the filing of a certified copy of the resolution approving this Agreement by
each City. Said resolutions shall be filed with the Shoreview City Attorney who shall
notify each City in writing of its effective date.
1.2 Expiration date: This Agreement expires upon the Bond, issued pursuant to
paragraph 2.3, being repaid in full.
2 Agreement between the Parties
2.1 Cost. The cost of the land purchase, access road relocation, and property
improvements of the Property will be funded by a $300,000 contribution from the lake
Lake Johanna Fire Department and by contributions from each City allocated
proportionally through the current cost share agreement for fire department operations
and capital costs.
2.2 Cost share formula. The cost share formula will be used to allocate each City’s
contribution for the land acquisition, but which and is currently defined as 25%
population, 25% households,
2.2 40% fire calls, and 10% assessed value.
3
2.3 Bond issuance. At the time financing is needed for the construction of a new station,
the financing will be provided by one of the two following methods:
Should all three cities mutually agree, the City of Arden HillsUnless otherwise
unanimously agreed upon, one of the Parties cities will provide financing for the cost
to construct a station (the “Financer City”), including any costs associated with the
financing, and each city of the other Parties will annually reimburse the City of Arden
Hillsthat the Financer City for their its portion of the debt service payment based on
the cost formula. Should a station be constructed in the allotted timeline for
reimbursement of the land acquisition costs, Arden Hillsthe Financer City will
include the land acquisition costs in the financing and each PartyCity will be repaid
via the financing proceeds for their portion of the land acquisition. If the Station is
not constructed in the time frame that is necessary to include the property acquisition
costs as part of the financing, each Partycity will be responsible for their
proportionate share of the property acquisition costs in accordance with the cost share
formula in effect at the time.
or
Each City will be responsible for providing their financial contribution, bond
proceeds or otherwise, when needed for the construction of a new station.
2.4 Bond repayment. The bond issue will be repaid through annual appropriations by
each City Party consistent with the cost share formula calculated and adjusted annually to
account for growth and development in each respective City.
2.5 Station Construction. Station construction will begin no later than June 30,
20252026, unless an alternative date is mutually unanimously agreed upon by all the
Partiesthree cities.
2.6 Development Approvals. The City of Arden Hills will review the proposed project
as part of its normal development process.
2.7 Municipal Fees. The City of Arden Hills will charge its customary development fees
unless the City of Arden Hills chooses to waive any of the said fees; these fees
include, but are not limited to, Metropolitan Council WAC/SAC, local WAC/SAC,
building permit and plan review, and park dedication fees. At the discretion of the
Parties, those fees may also be included in the Station financing or allocated per the
cost share formula.
4
2.7 Option to Acquire. Should the Lake Johanna Fire Department no longer serve the
City of Arden Hills or no longer use, occupy, or otherwise cease to operate in the fire
station, the fire station, at the discretion of the JPA, may be used by a successor
organization that provides fire protection to the cities.Parties. Should no acceptable
successor organization be identified the City of Arden Hills will have the option to
reimburse the other two citiesParties, the Cities of Shoreview and North Oaks, for
their respective contributions to the purchase of the landProperty, construction of the
fire station, and any applicable capital improvements to the station plus inflation as
measured by the Consumer Price Index (CPI) and take ownership of the land and
associated buildings.
2.8 Project Abandonment, Option. If the project does not move forward and the station
is not constructed, the City of Arden Hills will have the option to reimburse the other
Pparties for their direct cost to acquire the land and take ownership of the land.
Should the City of Arden Hills not exercise this option, the land may be sold and the
proceeds will be divided amongst the citiesParties and fire department based on their
initial direct cost for the land purchase of the Property.
3 Assignment, Amendments, Waiver, and Contract Complete
3.1 Assignment. The Parties may not No party may assign nor or transfer any rights or
obligations under this Agreement.
3.2 Amendments. Any amendment to this Agreement must be in writing and will not be
effective until it has been signed and approved by the same parties signatories of each
City who signed and approved the original Aagreement, their successors in office, or
other individual duly authorized.
3.3 Waiver. If any party fails to enforce any provision of this Agreement, that failure does
not waive the provision or the right to enforce it in the future.
3.4 Contract Complete. This Agreement contains all negotiations and agreements
between the CitiesParties. No other understanding regarding this Agreement, whether
written or oral, may be used to bind either partythe Parties.
4 Liability
Each City will be responsible for its own acts and behavior and the results thereof and
shall not be responsible or liable for the other Pparty’s actions and consequences of those
actions. The Minnesota Municipal Tort Claims Act, Minn. Stat. Ch. 466, governs the
Cities’ municipality’s liability.
5 Venue
5
Venue for all legal proceedings involving this Agreement, or its breach, must be in the
appropriate state or federal court with competent jurisdiction in Ramsey County,
Minnesota.
6 Signatures
This Agreement may be executed in several counterparts, and all so executed shall
constitute one Agreement, binding on each Citythe Parties notwithstanding that each City
may not be a signatory to the original of the same counterpart.
IN WITNESS WHEREOF, the Cities Parties have hereunto set their hands the day and
year first above written.
CITY OF SHOREVIEW
By:
Mayor
SEAL
DATED: ___________________, 2020
ATTEST:
City Clerk
6
CITY OF ARDEN HILLS
By:
Mayor
SEAL
DATED: _________________, 2020
ATTEST:
City Clerk
7
CITY OF NORTH OAKS
By:
Mayor
SEAL
DATED: _________________, 2020
ATTEST:
City Clerk
AGREEMENT BETWEEN
CITY OF SHOREVIEW, MINNESOTA,
CITY OF ARDEN HILLS, MINNESOTA,
AND
CITY OF NORTH OAKS, MINNESOTA
FOR
THE LAKE JOHANNA FIRE DEPARTMENT FIRE STATION PROJECT
THIS AGREEMENT is made and entered into the ___ day of __________, 2020 by and
between THE CITY OF SHOREVIEW, a municipal corporation and political subdivision of the
State of Minnesota, THE CITY OF ARDEN HILLS, a municipal corporation and political
subdivision of the State of Minnesota, and THE CITY OF NORTH OAKS, a municipal
corporation and political subdivision of the State of Minnesota (hereinafter jointly referred to as
the “Parties” and individually as each “City”) (the “Agreement”).
RECITALS
WHEREAS, each City is responsible for providing fire protection and prevention
services for the people and institutions within its boundaries; and
WHEREAS, each City contracts with Lake Johanna Fire Department to provide each
City’s fire protection and preventions services; and
WHEREAS, the costs of said fire protection and prevention services are allocated
pursuant to contracted service agreements between the Parties and Lake Johanna Fire
Department; and
WHEREAS, Lake Johanna Fire Department conducted a needs analysis that reviewed
the adequacy of Fire Station number 4 and identified future department facility needs; and
WHEREAS, the needs analysis concluded that the existing Fire Station number 4 located
at 3615 Victoria Street in the City of Shoreview, MN, was undersized and had many
deficiencies; and
WHEREAS, the needs analysis concluded that it would not be feasible to expand the
station, due to the limited lot size and subpar access to Victoria Street on the north of the railroad
tracks, and this location may impact response times; and
WHEREAS, Lake Johanna Fire Department reviewed potential property locations in
southern Shoreview and Arden Hills; and
WHEREAS, Lake Johanna Fire Department identified vacant property owned by Bethel
University on Pine Tree Drive in the City of Arden Hills, MN (“the Property”) as a potential site
for a new fire station; and
WHEREAS, the Property is large enough to accommodate headquarters for Lake
Johanna Fire Department and has improved access ideally situated to cover southern Arden Hills
and Shoreview as well as the entire service area for Lake Johanna Fire Department; and
2
WHEREAS, Lake Johanna Fire Department’s Board of Directors authorized the Fire
Chief to negotiate and execute a letter of intent to purchase the property from Bethel University;
and
WHEREAS, in early April 2020, Lake Johanna Fire Department and Bethel University
executed a letter of intent to purchase the Property for a purchase price of $1.35 million; and
WHEREAS, the letter of intent also requires Lake Johanna Fire Department to
contribute one third of the cost, up to a maximum of $325,000, to relocate an access road on the
Property;
WHEREAS, the purpose of this agreement is to define each City’s responsibilities for
the Lake Johanna Fire Department’s purchase of the Property and the construction of
improvements on the Property (“the Project”); and
WHEREAS, the new fire station would be owned and operated by the Lake Johanna Fire
Department to serve the three contract cities of Arden Hills, North Oaks, and Shoreview, the
Parties.
AGREEMENT
NOW, THEREFORE, in consideration of the mutual undertakings herein expressed, the
City of Shoreview, the City of Arden Hills, and the City of North Oaks agree as follows:
1 Term of Agreement
1.1 Effective date: This Agreement and any amendments thereto shall be in full force and
effect upon the filing of a certified copy of the resolution approving this Agreement by
each City. Said resolutions shall be filed with the Shoreview City Attorney who shall
notify each City in writing of its effective date.
1.2 Expiration date: This Agreement expires upon the Bond, issued pursuant to
paragraph 2.3, being repaid in full.
2 Agreement between the Parties
2.1 Cost. The cost of the land purchase, access road relocation, and property
improvements of the Property will be funded by a $300,000 contribution from the Lake
Johanna Fire Department and by contributions from each City allocated proportionally
through the current cost share agreement for fire department operations and capital costs.
2.2 Cost share formula. The cost share formula will be used to allocate each City’s
contribution for the land acquisition, and is currently defined as 25% population, 25%
households,40% fire calls, and 10% assessed value.
2.3 Bond issuance. At the time financing is needed for the construction of a new station,
the financing will be provided by one of the two following methods:
3
Unless otherwise unanimously agreed upon, one of the Parties will provide financing
for the cost to construct a station (the “Financer City”), including any costs associated
with the financing, and each of the other Parties will annually reimburse t the
Financer City for its portion of the debt service payment based on the cost formula.
Should a station be constructed in the allotted timeline for reimbursement of the land
acquisition costs, the Financer City will include the land acquisition costs in the
financing and each Party will be repaid via the financing proceeds for their portion of
the land acquisition. If the Station is not constructed in the time frame that is
necessary to include the property acquisition costs as part of the financing, each Party
will be responsible for their proportionate share of the property acquisition costs in
accordance with the cost share formula in effect at the time.
2.4 Bond repayment. The bond issue will be repaid through annual appropriations by
each Party consistent with the cost share formula calculated and adjusted annually to
account for growth and development in each respective City.
2.5 Station Construction. Station construction will begin no later than June 30, 2026,
unless an alternative date is unanimously agreed upon by the Parties.
2.6 Development Approvals. The City of Arden Hills will review the proposed project
as part of its normal development process.
2.7 Option to Acquire. Should the Lake Johanna Fire Department no longer serve the
City of Arden Hills or no longer use, occupy, or otherwise cease to operate in the fire
station, the fire station, at the discretion of the JPA, may be used by a successor
organization that provides fire protection to the Parties. Should no acceptable
successor organization be identified the City of Arden Hills will have the option to
reimburse the other two Parties, the Cities of Shoreview and North Oaks, for their
respective contributions to the purchase of the Property, construction of the fire
station, and any applicable capital improvements to the station plus inflation as
measured by the Consumer Price Index (CPI) and take ownership of the land and
associated buildings.
2.8 Project Abandonment, Option. If the project does not move forward and the station
is not constructed, the City of Arden Hills will have the option to reimburse the other
Parties for their direct cost to acquire the land and take ownership of the land. Should
the City of Arden Hills not exercise this option, the land may be sold and the
proceeds will be divided amongst the Parties and fire department based on their initial
direct cost for the land purchase of the Property.
4
3 Assignment, Amendments, Waiver, and Contract Complete
3.1 Assignment. The Parties may not assign or transfer any rights or obligations under
this Agreement.
3.2 Amendments. Any amendment to this Agreement must be in writing and will not be
effective until it has been signed and approved by the signatories of each City who
signed and approved the original Agreement, their successors in office, or other
individual duly authorized.
3.3 Waiver. If any party fails to enforce any provision of this Agreement, that failure does
not waive the provision or the right to enforce it in the future.
3.4 Contract Complete. This Agreement contains all negotiations and agreements
between the Parties. No other understanding regarding this Agreement, whether written
or oral, may be used to bind the Parties.
4 Liability
Each City will be responsible for its own acts and behavior and the results thereof and
shall not be responsible or liable for the other Party’s actions and consequences of those
actions. The Minnesota Municipal Tort Claims Act, Minn. Stat. Ch. 466, governs the
municipality’s liability.
5 Venue
Venue for all legal proceedings involving this Agreement, or its breach, must be in the
appropriate state or federal court with competent jurisdiction in Ramsey County,
Minnesota.
6 Signatures
This Agreement may be executed in several counterparts, and all so executed shall
constitute one Agreement, binding the Parties notwithstanding that each City may not be
a signatory to the original of the same counterpart.
IN WITNESS WHEREOF, the Parties have hereunto set their hands the day and year
first above written.
CITY OF SHOREVIEW
5
By:
Mayor
SEAL
DATED: ___________________, 2020
ATTEST:
City Clerk
6
CITY OF ARDEN HILLS
By:
Mayor
SEAL
DATED: _________________, 2020
ATTEST:
City Clerk
7
CITY OF NORTH OAKS
By:
Mayor
SEAL
DATED: _________________, 2020
ATTEST:
City Clerk