When Butler County disbursed roughly $8 million in CARES Act money to its municipalities last year, the boroughs, cities and townships applying for funds had to get their ducks in a row quickly.

Only a specific set of expenses were reimbursable under the federal Coronavirus Aid, Relief, and Economic Security Act and state guidelines, and the application required a fair amount of paperwork.

The funds distributed by the county, however, have been — and, for some municipalities, will be in the future — a lifeline.

They had to set offices up for social distancing; prepare employees for remote work, and purchase the technology and software that makes that work possible; and purchase personal protective equipment for those employees who couldn't work from home.

For others, they expect holes in the budget caused by decreased tax revenues this year and in the future. The funds reimbursed the municipalities for those expenses or will help plug the budget shortfalls — without interrupting the work municipalities deem important.

In a continuing series about the municipal CARES Act reimbursement, kicking off Sunday, the Butler Eagle will examine how much money municipalities received, what that money reimbursed and how the Butler County locales plan to expend the unexpected infusion of federal cash.

Complete applications

Mark Gordon, county director of planning and economic development, said Butler County partnered with Delta Development Corp. to act as a “clearing house” and to work with municipalities to complete applications.

The county also elected, when it received funds from the state and guidance from the state Department of Community and Economic Development (DCED), to split the process into two rounds as an attempt to create fairness in the disbursement of funds.

For the first round, the county calculated each municipality's population as a percentage of the county's population. The county then allocated that percentage of the $4 million made available in the first round to those municipalities, “so that no one municipality was grabbing most of the money,” Gordon said.

“We used that and said: 'Hey, in this first round, here's what you can seek reimbursement for, up to this amount,'” he said. “'But while you're doing that, if you have reimbursable expenses beyond your allocated amount, identify those and then in subsequent rounds we will consider those.'”

To apply for the funds in round one, the municipalities submitted a standard application form to which they added invoices, financial statements, budgets and other financial information. For smaller areas such as Concord Township, this application took a couple dozen pages. Larger areas such as Cranberry Township submitted hundreds of pages.

Of course, there was some help.

“We addressed and validated everyone's expenditures,” Gordon said. “Delta Development assisted in everyone's applications and helped them follow DCED guidelines for what is a reimbursable item and what is not.”

After the municipalities were recompensed in the first round in August, the county started plans for the second round of reimbursements.

Butler County followed a similar process there: It divided each applying municipality's population by the population of all municipalities that applied in round two, and used that percentage to determine the maximum allocatable amount.

This time, the municipalities didn't use a standard form, instead applying with a cover letter and the same type of financial documents as in round one. Agreements to disburse those funds were made in December.

Meeting needs

The funds municipalities received from the CARES Act came without any strings, Gordon said.

“When they were reimbursed, that money then went back into their municipal general fund,” he said. “From that general fund, they could utilize that money in any way that they normally would use money.”

Because of that, the municipalities were free to do with it as they wished. Sometimes that prompted an interesting program. Zelienople, for example, used its first-round funds to provide to its residents gift cards to local businesses. In the second round, several municipalities pooled funds together to support hospitality workers.

For the most part, however, the funds were — and are — treated like any other monetary tool.

Fill budget holes

In the city of Butler and Cranberry, two of the three largest CARES Act fund recipients in the county, officials plan on using the money to fill any holes the pandemic may have left on the revenue side of the budget.

Both municipalities have a business tax that is based on a percentage of gross receipts, having been grandfathered in prior to the state changing that tax to a flat tax municipalities may impose. Because of the state-mandated business closures, that line-item will suffer.

“We expect when 2021 business privilege mercantile taxes are due, it will be down because it will be based on 2020 gross receipts,” said Dan Santoro, Cranberry manager. “It'll be based not only on companies that are no longer there, but you'll also have the impact of less economic activity.”

For 2021, the township is projecting roughly $650,000 less in mercantile tax receipts than it otherwise would have expected. The CARES Act funds, Santoro said, will help Cranberry reverse some of the belt-tightening financial moves it took last year in planning for the economic impact of the pandemic.

“It helps cover some of those projected revenue downfalls and would generally allow us to proceed with those things that the board has put on hold in an attempt to be conservative and fiscally prudent,” Santoro said. “That funding, plus this new potential source of funding (from the new stimulus bill signed March 11), allows us to potentially move forward some of those capital projects or hiring of those people we would have otherwise not.”

Mindy Gall, Butler city clerk, said the city expects to see the impact from the pandemic in full this summer, when it would normally have collected its business taxes. That's in addition to lower revenue from parking, with fewer people traveling into the city and using a metered parking garage or lot.

Less of an impact

But, she added, with the possibility on the horizon of the pandemic ending, Butler hopes next year will have less of a financial impact.

“I'm very hopeful that things pick up and, if they pick up for events and for the city, they're going to pick up for establishments within the city, and everyone's going to do better,” she said. “It's an unfortunate series of events that got us here.”

Santoro said the CARES Act funds will likely have another economic benefit.

“What that revenue allows us to do is to plug that temporary gap (in our budget) and potentially move forward with hiring and/or capital projects or equipment that might not otherwise get done and, in fact, put more money into the economy,” Santoro said. “If we put forward a capital project or purchase equipment or hire a person that otherwise would have been put on hold, that puts more money into the economy.”