All three are behind on rent after losing their jobs during the pandemic. They applied to a county rental assistance program funded by federal dollars. But less than 10 percent of the $20 million fund had been distributed by mid-October. And as of Friday, none of the three have received help.
Across the country, local governments are struggling to push Cares Act money into the hands of the people who need it most. Officials say the funds were slow to trickle down to them, in part because of political squabbling. Stringent and evolving rules from the Treasury Department complicated the process.
For many localities, it has been an unprecedented task: quickly distributing millions in relief while trying to curb a rising tide in infections and fill gaping budget holes. Some simply did not have the infrastructure in place to make it happen.
Now, as individuals grow more desperate for testing, rental assistance and business relief, officials face a looming deadline: If they do not use their funds by Dec. 30, the money must be returned to the federal government. Despite pleas from state and county leaders, a bipartisan bill to extend the deadline has been stuck in a Senate committee since August.
“We are in sprint mode,” said Jeff Aluotto, the administrator of a county in southwestern Ohio.
The failure by localities to quickly disburse the money has become a sticking point in discussions of a second stimulus package, with some Republicans saying they won’t bail out what they describe as cities poorly managed by Democrats. They cite a Treasury Department report showing state and local governments spent less than 30 percent of the funds through June 30 as proof that more funding is not needed.
But a bipartisan coalition representing state and local governments says the report is misleading and that they have spent more of the relief funding than the federal government suggests. Michael Leachman, vice president for state fiscal policy at the Center on Budget and Policy Priorities, said politicization of the issue has undermined the deep level of need and the shared interest that all lawmakers should have in preventing the recession from worsening.
“The virus does not care if you are a Republican or Democrat,” he said. “We already have another surge in cases, and what happens if after December 30 states and localities do not have the funding?”
Dollars slow to trickle down
While Montgomery County and other jurisdictions with populations larger than 500,000 got their Cares Act funding directly from Washington in April, smaller counties and cities had to rely on state governments for their allocations.
For months, governors sparred with their legislatures over how to divide up the funds. State officials disagreed with their local counterparts, and lawmakers at all levels found themselves at odds. Some confusion stemmed from the Treasury Department’s recommendation that states “should” give 45 percent of their funds to local governments.
By July, only one-third of all cities and counties had received any funding, said Elizabeth Kellar, director of public policy at the International City/County Management Association.
Colin Wellenkamp, head of the Mississippi River Cities and Towns Initiative, said it was not until this fall that many cities and towns along the watershed, from Louisiana to Minnesota, got any money. Some were still waiting as of early November.
More than 2,000 residents of Brookhaven, Ga., had fallen behind on their power bills by the time the city got its funding on Oct. 1, forcing Mayor John Ernst to negotiate a deal with the local utility so their electricity was not turned off. He said that he and other small-city mayors could have helped more people earlier had he received the funding more quickly.
“We are in a crisis in this country,” he said. “It is not just about spending the money — it is about getting it to the people who need the money the most.”
Some local governments were told they would get federal funds to reimburse them for virus-related costs they paid for initially. But poorer cities, especially, said they lacked the money to do that.
Hard-hit Newark, for example, might have to shelve a $6 million plan to provide housing for the homeless, said Chief Operations Officer Natasha Rogers. Officials in East St. Louis, Ill., where a shuttered casino is costing the government millions, could barely afford to front $1.1 million for public safety, for which it will be reimbursed. But dramatic shortfalls mean that unless there is more stimulus money and it is directly allocated, public-safety workers could be laid off, said City Manager Brooke Smith.
“Crime doesn’t stop and fires still happen,” Smith said. “For us it is about maintaining the services we had before.”
The Treasury Department has not released an updated report showing how much of the Cares Act money has been spent, though local and state governments were asked to report this data by Oct. 21. A spokeswoman declined to explain the delay.
In Maryland, Gov. Larry Hogan (R) on Thursday released the state’s final tranche of Cares Act funding, $70 million, promising that the state would spend its allocation by Dec. 30. He called on small and midsized counties — which had spent just 35 percent of their funds as of mid-October — to follow suit and “immediately get that money out the door.”
Howard County, a wealthy suburb north of D.C., has distributed less than half the Cares Act money it set aside for business relief. An official said that was partly because of timing — Howard only received its funding in June — and partly because the county wants to ration the money, given the uncertainty over another stimulus package. This strategy, however, has left some businesses flailing.
Jaxon Edwin Social House in Ellicott City received $2,500 from the county in July, said owner Jeff Braswell. But it was too little to save the restaurant, which had been remodeled by celebrity chef Gordon Ramsay weeks before the pandemic and closed in August.
Braswell, who said he is now saddled with debt, urged the county to distribute the federal dollars sooner rather than later. “A lot of people are days away from closing,” he said.
39 Minute Workout, a kettlebell gym and acupuncture center in Ellicott, has not been eligible for Howard’s grant program. The business is classified as an acupuncture service, which isn’t among the specific industries that the county is targeting, said co-owners Abby and David Beares. The couple has tried to apply for a second round of county grant funding, which was announced last week. As of Monday, they had not heard back.
“We’re fighting every single week to not go under,” David Beares said. “If there’s help, it needs to come now.”
Getting the money out the door
Local officials say they face a Catch-22. They want to help residents quickly but are wary of running afoul of federal rules. Given limited resources, they want to target the community’s most needy, but are frustrated by long-standing logistical challenges, including language barriers and the lack of Internet access among low-income residents.
Employees in Bexar County, Tex., have spent up to 16 hours a day on Zoom trying to figure out how to funnel dollars into existing programs or create new ones that fit the federal government’s criteria, said David Marquez, head of the economic development department. Many of their questions for Treasury Department officials — including what documents were needed for rental assistance and how small businesses could spend their funds — went unanswered for weeks, he said.
“We are trying to open the gates and help as many people as we can, while also maintaining our fiduciary responsibility,” Marquez said. “That is what keeps me up at night.”
In El Paso, where coronavirus cases are soaring, officials were surprised to see only a trickle of applications for a $10 million rental assistance program.
They know the need is there — landlords have reported rising delinquency rates throughout the city — but tenants seem deterred by the extensive documentation required by federal rules, said Robert Cortinas, the city’s chief financial officer. The city is also home to a large undocumented population whose members are leery of providing too many identifying documents.
Officials are trying to make the application process easier, but communicating those changes has been difficult, especially amid a pandemic.
“The people most at risk of eviction are least likely to have access to our website and other resources,” said Scott Lynch, director of the nonprofit that is administering the grant. As of October, less than 30 percent of the fund had been distributed.
In Summit County, Ohio, a budget officer was so frustrated at the lack of applications to a business grant program that he printed 50 fliers and distributed them himself.
Officials in Hamilton County, Ohio, hoped to administer 170,000 coronavirus tests through a new program this fall but had only done 10,600 as of Friday. They want to use the money past Dec. 30, with the region reporting a massive uptick in cases.
“I am in panic mode,” said Craig Brammer, chief executive of the nonprofit running the program. “How are we going to stop doing this robust community-based testing as things are getting worse? That would be a disaster.”
In El Paso and elsewhere, officials are weighing whether they need to reallocate funding away from critical but slow-moving programs. It’s a vexing discussion to have, Cortinas said, because it’s clear to officials that the growing threat of eviction is among the most dire problems in the community.
“Our target, ultimately, is to make sure we spend every dollar that is given to us,” he said.
“If we just had more time,” he added, sighing. “Just a little more time — we’d get that money out there.”
'It might be too late'
In July, Montgomery County allocated $20 million of its Cares Act funding to a rental assistance program, which officials hoped would help 5,000 tenants. Thousands applied, but after three months, fewer than 200 had received checks.
“When I see how little has been spent, I don’t even know what to say,” said County Council member Nancy Navarro (D-District 4).
The delay is partly because officials are straining to ensure that the money goes to the most needy, said program manager Amanda Harris.
Officials spent five weeks developing a “homeless prevention index” to target neighborhoods where low-income minority residents were most at risk of becoming homeless. They sifted through applications to find tenants in these neighborhoods and, like in El Paso, often had to request additional documents from applicants because of the stringent federal rules.
Harris said about 50 employees are working to process applications but that most of them also need to oversee preexisting housing programs.
“Our staff are burned out,” said Earl Stoddard, Montgomery’s head of emergency management. “We’ve been operating for a near-frantic pace for almost eight months now. . . . It’s incredibly challenging.”
Matt Losak, head of the local renter’s alliance, said well-meaning attempts to target the most needy took up valuable time that left most applicants without assistance. “We’re just generally concerned,” he said. “Because this is a crisis.”
At Cider Mill Apartments, tenants have resorted to borrowing money and pawning belongings to afford rent, said Carmen Castro-Conroy, a counselor with the Housing Initiative Partnership. She has helped six residents apply for the grant, but only one had heard back as of late October.
“If I have to vacate . . . I don’t have anywhere to go,” said Edwige Tebou, 36, the Cameroonian immigrant whose savings have dried up since she lost her pharmacy job.
“It’s very, very depressing,” Tebou said, standing outside the apartments. “Some of us have kids.”
She gestured to a woman from the Dominican Republic who nursed three children through the coronavirus in her one-bedroom apartment. The woman, who asked not to be named for privacy reasons, said the restaurant she worked for closed in March and that she has had trouble sleeping at night, worrying about how to pay her rent.
Carlos Ortiz, 52, another neighbor, has also been scrambling to make up rent after losing his job in construction in April. He recently applied for the county grant, but if it doesn’t arrive soon, he thinks he’ll pack up the apartment he shares with his wife and 5-year-old son and leave.
While Maryland has an eviction moratorium, landlords have continued to send tenants 30-day notices to vacate and threatened to take them to court. After spending five years at Cider Mill, Ortiz said, he knows what it looks like when a sheriff forcibly evicts a family. He doesn’t want that to happen to him.
Sitting in his apartment one recent afternoon, he thought about what he would say to the government officials overseeing the federal relief.
“If it’s your will to help the people who live here, please help,” he said in Spanish. “If it takes too long . . . it might be too late.”