“We’re just people working from home here,” Mayor Barney Rush said.
In the coming weeks, however, Chevy Chase is set to receive the same level of federal relief funding per capita as dozens of other municipalities hit far harder by the pandemic. According to early estimates, the town of 2,973 could receive up to $2.5 million, roughly equivalent to its entire annual operating budget.
Unlike the 2020 Cares Act, this year’s American Rescue Plan is sending a significant amount of money— $19.5 billion — into the coffers of the country’s smallest municipalities, a decision that advocates say will help reach needy residents where they are and drive economic recovery. In Maryland, $538 million will be split among 149 small cities and towns, many of which have not received such massive infusions in several decades.
The funding, which will go out in two tranches, is calculated based on a formula created by the federal government that depends on population, without regard for a municipality’s poverty or unemployment level, or how much it was affected by the pandemic.
In some places, like District Heights in Prince George’s County and Takoma Park in Montgomery County, local officials say the funding is sorely needed to stabilize government services and provide aid to residents who have lost jobs and income.
But in communities like Chevy Chase, leaders are struggling to figure out how the money can or should be used, highlighting the deep disparities of the pandemic’s impact.
“We are not sure that we’d be able to use it for direct covid-related matters because it’s not clear that the town has really been affected,” said Rush, a board chairman for a publicly traded solar company who serves as the town’s unpaid, part-time mayor.
Located just outside the District, Chevy Chase is the home of many prominent Washingtonians, including Chief Justice John G. Roberts Jr. When the pandemic hit, the town council moved most of its operations online without having to dip into its $10 million in general reserves, Rush said.
While the coronavirus ravaged more diverse, densely populated neighborhoods in Montgomery and Prince George’s, the town was mostly insulated, with residents who were able to access testing and, later, vaccinations, relatively easily. In Zip code 20815, which includes Chevy Chase, about 3.8 out of every 100,000 residents have tested positive for the virus; that number is more than double in Silver Spring and Gaithersburg, and triple in Riverdale and Hyattsville.
So how is this town, where two-thirds of all adult residents have graduate degrees, planning to spend its federal dollars? Most likely on storm water drainage systems for its tree-lined roads and park.
According to the Treasury Department’s latest guidance, dollars from the American Rescue Plan can be used to curb the spread of the coronavirus, shore up revenue losses, fund hazard pay for front-line workers, support needy residents, and invest in “water, sewer, and broadband infrastructure.”
Rush said officials are trying to ascertain if the last point means the town can spend its allocated money addressing the flooding complaints that residents have had in recent years.
“We’re obligated to spend money in ways that directly benefit residents of our town. . . . So it’s not like we have free rein here,” he said. “If we ultimately do have extra money, I guess we return it at some point.”
Even harder-hit cities and towns are wrangling with how to manage the impending influx of dollars and use it most impactfully, said Irma Esparza Diggs, a senior executive with the National League of Cities.
“There are always challenges for new programs and this is new — brand-new,” she said.
The city of Takoma Park — with a population of 17,672 and a median household income of $84,000 — is likely to funnel a chunk of its $14 million toward an existing coronavirus fund for needy residents and businesses, Mayor Kate Stewart said. Officials are also exploring the option of setting up eviction prevention funds and affordable housing projects that could serve the city’s 7,500 or so renters.
The city of Gaithersburg, often ranked as one of the most racially and ethnically diverse municipalities in the nation, is planning on sending some money to poor residents and keeping the rest to help cover the $5 million in revenue it lost last year from hotel and motel taxes and permitting fees, Mayor Jud Ashman said.
Home to about 67,000 people, with a median household income of $89,000, the city has a large community of immigrants and a poverty rate higher than the county average. Many residents lost their jobs last year when virus containment measures led to the closure of shops and restaurants, Ashman said.
The city’s distribution hub had given out more than 600,000 pounds of food and nearly 150,000 diapers to 22,750 households as of late May — and community needs don’t appear to be slowing, officials said.
“Even though it’s a large chunk of money, it’s not a sustained amount of money,” Ashman said about the federal relief. “So the biggest challenge, for us, is how to make it last for our needy residents, how to get the biggest bang for our buck.”
District Heights Mayor Johnathan Medlock said the city used most of the $365,000 it received from the state through the Cares Act on hazard pay and protective equipment for its small police force, as well as food vouchers and gift cards for hungry residents.
Much of the $5 million that District Heights is slated to receive via the American Rescue Plan will go toward helping its 6,000 residents pay for food, supplies and overdue utility bills, Medlock said. Even before the pandemic, 1 in 7 residents of the Prince George’s County town was living in poverty, census data shows.
“Losing income was a rampant thing at the beginning of the pandemic. Even later, if people got their jobs back, they were underemployed for many months,” Medlock said. “Without this funding, we’d really be dealing with the full brunt of the pandemic.”