North Shore Officials Urge Extension To Use CARES Act Funds

DANVERS, MA — A group of 37 mayors and town administrators — including those in Danvers, Marblehead and Salem — sent a letter to the state's Congressional delegation asking it to press for an extension for the time allowed to use money allocated in the coronavirus CARES Act this spring.

Under the current restrictions, that money can only used be used as reimbursement for costs incurred due to the pandemic — and not to make up for revenue lost because of the health crisis or to earmark for costs that are expected to be ongoing into at least the start of 2021. The deadline for using the funds is Dec. 31.

"When the CARES Act was passed there was a tremendous uncertainty about what we were facing and how long it was going to last," Danvers Town Administrator Steve Bartha told Patch on Wednesday. "We didn't know where the fiscal pressures were going to be."

Marblehead Town Administrator Jason Silva and Salem Mayor Kim Driscoll also signed the letter.

While the cost to combat virus spread in many cities and towns was relatively low compared to initial projections, the cost of lost tax revenue from business restrictions and other decreased economic activity from a pandemic going on 10 months is proving to be the biggest concern for many communities.

"We were hit the hardest not on the expenditure side, but on the revenue side," Bartha said.

Bartha told Patch that Danvers, as an example, was allocated $2.4 million in the CARES Act. But the town has only spent about $850,000 of that for costs such as cleaning services, personal protective equipment, overtime for health department employees and modifying buildings for better layouts to ensure social distancing.

He said about $450,00 of that has come out of the CARES Act funding and $400,000 has come from reimbursements from the Federal Emergency Management Agency. That leaves more than $1.5 million that must be spent over the next 30 days or lost without an extension.

Bartha said it is only in recent months that services like sanitizing school buildings — which costs about $10,000 per month — have started accruing because schools were closed until September.

"It became very clear as we entered the fall it would not be over by Dec. 31," Bartha said. "Right now, we can submit for those (school cleaning) expenses. Come Jan. 1, those expenses hit our operating budget. It's not like we are going to stop cleaning our buildings for the virus."

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Bartha said the "narrow focus" to only allow it for expenses ignores the need for money to match the lost revenue. A second stimulus package that could address that has been held up in Congressional debate for six months.

Bartha said the town's initial "lost revenue" projection in the spring suggested it could be $400,000 in collections of sales, meal and other taxes over two quarters, but that it has actually been closer to $750,000 because restrictions projected to possibly last a few months have gone on for nearly a year.

"There is certainly a real need for more support of businesses and citizens," he said. "But in terms of how narrowly focused the CARES Act was, we can't access it for that."

The letter asked the federal delegation to push for the extension for use of the money already appropriated, and a push for a second bill that will make up for those lost expenses in the form of aid to cities and towns.

"The Dec. 31 deadline creates an arbitrary end date by which we must spend this critical federal aid," the letter reads. "But our needs will surely continue well into the new year and they are likely to keep growing as case counts rise. We need funding to address these needs, but the CARES deadline severely hurts our ability to meet these needs as they arise.

"If the deadline is extended, we can make critical investment decisions today that will help us as our needs remain high in the new year."

Bartha said that while he understands that it was difficult to forecast lost revenue at the start of the pandemic, two full quarters of data now make it easier for cities and towns to accurately request funds to make up potentially devastating shortfalls.

"At the same time as we are asking you to extend the deadline, we are eager to see the passage of a subsequent federal relief package that provides critical revenue to communities and regions," the letter to the delegation stated. "At the state level, we are urging Governor (Charlie) Baker to make stopgap funding available for local health departments and high-risk communities.

"This state assistance would allow us to continue limited public health investments and give extra assistance to communities who are facing continued rates of high community spread, but it is not enough to enable us to ramp up our efforts to address the virus while we equitably rebuild and recover.

"We hope that a second relief package will include at least the following items: expanded unemployment benefits; financial support for local, regional, and state governments; funding to address housing insecurity; support for expanding testing and contact tracing; and significant support for small businesses."

Scott Souza is a Patch field editor covering Beverly, Danvers, Marblehead, Peabody, Salem and Swampscott. He can be reached at Scott.Souza@Patch.com. Twitter: @Scott_Souza.