State and local leaders continue to forge path through COVID crisis

State and local officials this afternoon discussed the steps ahead in the reopening of the state’s economy during the 13th weekly conference call convened by the MMA.

Lt. Gov. Karyn Polito highlighted two new grant programs – Shared Streets & Spaces and the Food Security Infrastructure program – intended to help the state recover from the COVID-19 public health emergency.

The $5 million Shared Streets emergency grant program will help cities and towns with rapid improvements to sidewalks, curbs, streets and parking areas in order to create or improve shared spaces. She said the grants may be used to help adapt public outdoor spaces for use by restaurants and businesses.

Grants will range from $5,000 to $300,000, and applications will be available on June 22. The Barr Foundation, a state partner for the program, is available for technical assistance with the application and planning.

The $36 million food security program will bolster supply chains of local, fresh foods to ensure access by individuals and families throughout the state, while also helping food producers. Funds, in amounts up to $500,000, will be available to farmers, fishermen, and food processors. Applications are available and will be expedited on a rolling basis through Sept. 15.

Polito also discussed the state’s 50 new pop-up COVID-19 testing sites across the state to provide free tests tomorrow and Thursday for those who have recently participated in large gatherings, such as marches and demonstrations related to the police killing of George Floyd in Minneapolis. Test results will be provided to each participant confidentially, but the data collected will provide a more complete picture of where the state stands in terms of COVID cases and community spread.

Polito said an announcement is coming late this week about whether the state will move to the second stage of Phase 2 of the reopening plan, which could begin next Monday. Activities slated to reopen in the second stage include indoor table service at restaurants, close-contact personal services such as nail and skin care and massage therapy, and personal training, all with restrictions.

“We need to continue to look at the data, like we did right before the beginning of Phase 2,” she said. “Hopefully, everything is going to continue to trend in the right direction.”

Phase 3 could potentially begin in the first half of July, she said.

She added that the administration is looking closely at the 25% occupancy limit for office spaces and when it might be relaxed.

Administration and Finance Undersecretary Catharine Hornby said the state is likely to enter fiscal 2021, which begins in two weeks, with a one-month temporary budget as it awaits more clarity on the potential for additional federal assistance that might help to offset local and state revenue losses due to the economic shutdown and ongoing recession.

“We intend to issue a bulletin next week that will lay out how we will do local assessments and local aid for July under an interim budget,” she said, adding that aid and assessments would continue at fiscal 2020 rates. “If we are still under an interim budget in August, essentially the same rules would apply.”

Hornby said “we maintain hope” that federal aid will be made available at some point for revenue replacement, as a result of congressional action on a bill such as the HEROES Act, which would target around $13 billion for the state of Massachusetts and another $7 billion for municipalities and counties. She said Congress is expected to take up a much smaller bill, perhaps in July, but, “a fraction of fairly big numbers could still be fairly big numbers.”

“That can materially change the picture, both for the state budget and also for the money that can be made available to cities and towns,” she said. “There is a lot of attention being paid to state and local government exposures, in part because state and local budget cuts were a significant drag on recovery coming out of the last recession … and [there is] a desire not to repeat that.

“There’s also been a lot of attention at the federal level to the challenges of reopening schools,” she said.

CARES Act and federal aid
Hornby gave updates on federal reimbursements for COVID emergency response expenditures available through the Coronavirus Relief Fund, part of the CARES Act.

The relief fund targets $2.7 billion for state and local governments in Massachusetts for “necessary expenditures” incurred between March 1 and Dec. 30, 2020, due to the COVID-19 public health emergency that were not budgeted for as of March 27. Boston and Plymouth County, both exceeding a population threshold of 500,000, applied for and will receive funds directly, while funds for the remaining 323 municipalities are being administered through the state.

The state is making approximately $500 million available to cities and towns in the first round, the application period for which ended last Friday, with a second round anticipated in the early fall. Hornby said municipalities that incurred costs but did not request funds in fiscal 2020 may still do so in the next round.

“So if you have not applied, you have not missed your opportunity,” she said.

She said the state received Coronavirus Relief Fund applications from 80% of the communities going through the state, and about half of those have already received their funds.

“The remainder are under review, generally for relatively small issues,” she said.

In order to maximize federal dollars, Hornby said, state guidance urged communities to pursue aid through the Federal Emergency Management Agency “for any costs that appeared to be reimbursable” as a result of the federal disaster declaration, and then use CARES Act funds for the 25% match and “to cover costs that are not eligible under FEMA for any of a number of reasons.”

She said the state would revisit its guidance if the federal rules change.

“We also have always anticipated that some communities may end up having extraordinary needs based on [unanticipated] local circumstances,” she said. “We want to maintain the flexibility to be responsive to extraordinary circumstances and local needs.”

She said the state and communities have been working with estimates of FEMA reimbursements. FEMA is known for lengthy delays in getting funds out after a disaster, but Hornby said a shorter wait is expected in this case because the funding has already been appropriated by Congress.

She said the state is declining reimbursement requests for “long-term capital investments” because doing so “would quickly exhaust the resources in the program.” Plexiglass barriers and furniture needed to reconfigure interior spaces are examples of allowable expenditures, but office renovations are not.

The state also disallowed expenses for which “there are other, more targeted revenue sources through other parts of the CARES Act.” For example, reimbursements for school-related costs are available through grants administered by the Department of Elementary and Secondary Education. She said her office is working with DESE to identify the costs associated with reopening K-12 public schools this fall and what funding sources may be pursued to offset them.

Division of Local Services Senior Deputy Commissioner Sean Cronin said his office has been asked whether a potential delay in FEMA payments would affect free cash or deficits that need to be raised in the future.

“The answer is, it’s going to be treated the same way things were treated in the winter of 2015, when we had back to back to back snowstorms, and we basically let communities have deficits on their balance sheets until a final FEMA payment was made, and if there was a remaining deficit, they needed to raise that. But free cash wasn’t hit until final payments were made.”

Hornby said there is some flexibility in how relief funds are used, if needs change.

“What we’ve transferred is an amount that is available for allowed purposes, and we will be in touch, to see how they are in fact being used,” she said.

Senior programs
As communities look toward restarting programs at senior centers, Dr. Larry Madoff, medical director at the DPH’s Bureau of Infectious Disease and Laboratory Sciences, discussed the significantly higher risk of COVID complications for residents over age 65.

“All the efforts that we’re making … are about protecting those who are most vulnerable and protecting our health care capacity,” he said. “I just want to make sure that we’re especially careful with these populations.”

As communities prepare to open senior centers potentially in Phase 3, he said, “These are the places where all of our safeguards are most important: social distancing, the use of face coverings … hand hygiene and cleaning and all of the measures that we’re taking.

“And I think this is going to depend also on where we stand in terms of the outbreak, and when we’re pretty sure that community transmission is no longer occurring, then that’s a much safer situation.”

He added that outdoor activities are approximately 20 times safer than indoors, so distanced, outdoor visits with seniors at long-term care facilities are now allowed, and can be beneficial to mental as well as physical health by interrupting long periods of isolation. The guidance limits these visits to two individuals at a time.

• Administration Responses to Questions Raised During June 16 Municipal CEO Briefing (43K PDF)
• Audio of June 16 call with administration (39M MP3)