Dwindling CARES dollars rattle businesses, officials during highest COVID-19 surge yet
The COVID-19 pandemic, now in its eighth month, has ravaged the local economy, and businesses, nonprofits and local elected leaders worry the worst is yet to come.
Reported COVID-19 cases have risen to record-breaking counts on a daily basis this month — Pierce County’s 14-day case rate per 100,000 was 307 as of Thursday. The spread prompted Gov. Jay Inslee to mandate more restrictions recently, including banning indoor dining at restaurants, shuttering gyms and movie theaters, even restricting indoor gatherings at homes.
Businesses and nonprofits already pummeled by the pandemic now face another challenge: Money allocated to Pierce County and local cities from the federal CARES Act is nearly gone, leaving them to face the rest of the year without the safety net of government loans or grants.
Of the $158 million in CARES Act funding allocated to Pierce County, only $264,000 remains unallocated.
Elected officials and business owners are reluctant to hope for more funding from the state or federal government.
“We are on our own,” said Stacey Ogle, who owns a Tacoma printing business.
CARES dollars
Pierce County government received $158 million of federal CARES funding.
The county has used it to pay for COVID-19 testing, hire contact tracing staffing at the Tacoma-Pierce County Health Department and provide grants to businesses and allocations to homeless service providers and food banks.
Businesses used the grants to pay rent, staff and bills. Nonprofit organizations helped families stay housed and provided more food and meals than ever before.
There are some rolling relief programs that will remain open for the rest of 2020 until all funds are spent, like rental and mortgage assistance, transportation, affordable housing and business relief.
Earlier this week Pierce County Council moved $2 million in CARES Act funds to expand its small business relief loan program and $1.5 million for food banks, leaving $264,531 in COVID-19 reserves.
A total of $16 million CARES dollars was designated for municipalities within Pierce County.
The state announced on Friday $120 million in new economic support for businesses with grants, recovery loan program and rental assistance.
Cities have used up most of the funds to reimburse measures they took internally to respond to the coronavirus pandemic, including installing shields at public counters, buying face masks, paying overtime and hazard pay to public employees and setting up employees to work remotely.
Cities gave to resource centers like food banks and homeless shelters and utility, rent and child care assistance. Local businesses received help from cities. One city, Fircrest, used funds to cover delay costs of a city-owned pool.
Government aid
Congress remains gridlocked along partisan lines over a COVID-19 relief package.
Republicans and Democrats have yet to agree on a price tag.
Democrats like Washington Sen. Patty Murray have been pushing for the House-passed HEROS Act, which would provide $2.2 trillion in COVID-19 relief, while Senate Republicans have supported a $500 billion bill.
The Republican proposal does not include additional flexible funding to help state, local and tribal governments replace revenue lost due to COVID-19.
“When your house is on fire, you get everyone out and you put out the fire — you don’t pause to question if you’re using too much water,” Murray said in a statement to The News Tribune.
“I won’t stop fighting until we get this done, because our communities can’t afford for the federal government to waste any more time.”
Pierce County Executive Bruce Dammeier, a Republican, said much of the coronavirus response has been on the county’s shoulders.
When the virus hit in March, Dammeier expected a national, or even state standard of testing by June. The county has provided free mobile COVID-19 testing sites since July.
“It’s still the county out here leading on the testing, and that boggles my mind,” he said.
Some Pierce County Council members like Derek Young,D-Gig Harbor, aren’t expecting much in the coming months from the state or federal government.
“We may be on our own here. We may have to dip into our reserves for testing and human services response,” he said in a Tuesday study session. “We are not going to have nowhere near what we’ve had these past few months.”
The executive is more hopeful, but ready to use county reserves as needed to provide funding for contact tracing and testing.
“I anticipate the federal government will continue to do that if not the state will do that,” Dammeier said. “If not, we can’t let our community go uncovered. If called to lead the county, we will step up.”
Dammeier is prepared to spend county dollars on testing and contact tracing if there is no aid elsewhere. The Pierce County reserves stand at about $330,000, according to budget estimates.
“Congress cannot deliver, I’m not sure about the state Legislature, but I have to look Pierce County residents in the eye every day. I’m not going to let them down,” he said.
City expenditures
From big to small, jurisdictions in Pierce County have either already spent or have plans to spend funds allocated federally and from the state on coronavirus response.
If more funding doesn’t come in, they face finding more money locally or within their own budgets to fight COVID-19.
Anita Gallagher, assistant to the Tacoma city manager for police development and government relations, said via email that there is concern about the pandemic not having abated, which “does lead to more hardship for small businesses, non-profits, and the health care sector.”
“The CARES Act Coronavirus Relief Funds expire at the end of 2020, and we need the federal government to pass an additional relief package that would include aid to all of the above sectors but would also provide direct relief to local governments,” Gallagher said Wednesday.
“The next legislation needs to include flexible relief that the city could deploy to help combat the ongoing COVID crisis and replenish lost revenues so that we can continue to provide essential services to our community.”
The city of Tacoma received $9.5 million in coronavirus relief funds from the Department of Commerce that have been allocated for:
Sheltering, food assistance and rental assistance: $3.158 million
Digital access and distance learning resources: $1 million
Unemployment claims: $1 million
Public safety response and medical equipment: $1 million
Child care assistance: $800,000
Utility payment assistance for small businesses: $750,000
Employee time/overtime: $500,000
Organization and reconstitution costs (teleworking, sanitizing, personal protective equipment): $1.3 million
The city used some of its own revenue for COVID-19 response, including $1.2 million for rental and tenant assistance and $2.4 million for utility assistance. Grants from other agencies, including $1 million from the Federal Emergency Management Agency (FEMA) and $3.5 million from the Department of Housing and Urban Development (HUD) also helped the city with COVID response.
“The city would not have been able to cover all of its COVID-related expenses through (CARES Funding Relief) dollars alone,” city spokesperson Maria Lee said in an email on Tuesday. “The other funding from FEMA and HUD was crucial in enabling the city to carry out important work around homelessness and other community needs.”
Lakewood is urging Congress to provide additional financial support for COVID-19 relief, city spokesperson Shannon Kelley-Fong said.
“The city believes that many residents, businesses, non-profits, hospitals and governments will face substantial financial challenges due to the continuation of the pandemic during the next few months, and beyond, without additional COVID relief,” she said in an email.
The city of nearly 80,000 has been using its reserves to continue “local government services,” Kelley-Fong said.
Lakewood received nearly $2.7 million in CARES dollars, which was diverted into three categories: individual and family economic resilience, business assistance and vital government services.
About 35 percent was allocated to rental assistance and boosting nonprofits to provide community services, according to the city dashboard. Local businesses received almost 40 percent of the CARES dollars, and another 25 percent went to the City of Lakewood to work remotely and purchase public health equipment like masks, touchless fixtures and plastic glass at front desks.
Steilacoom, comprised of roughly 6,500 people, was awarded roughly $290,000 in CARES funding and spent it as of Oct. 31, town administrator Paul Loveless told The News Tribune via email this week.
A total of 19 businesses benefited from $82,000 of the funding, according to a spreadsheet provided by Loveless.
In addition, 67 households benefited from $65,000 in utility assistance, and 53 households benefited from $52,500 in rental assistance. A total of 25 families benefited from $35,500 through a childcare assistance program.
The remainder of the funding was used to assist the local food bank — $2,329.63 — and town costs, including $32,873.16 for personnel and $19,547.21 for supplies.
“If further federal funding came in, I believe we could easily utilize it for the programs we spent CARES funds on,” Loveless said in an email on Tuesday.
Businesses
Local business owners are not optimistic about sales during the winter months and don’t believe the government will help.
Steven Fabre owns Cassidy’s Pub in Midland. The state’s new restrictions on restaurants means he will reduce staff from 15 to two employees per payroll. The CARES funding helped several of his fellow business owners, and the Paycheck Protection Program helped him pay staff.
Congress has allotted $719 billion into the Paycheck Protection Program to help businesses stay afloat through the pandemic and to encourage them to retain staff. The program provides low-interest loans that can become grants if a business follows guidelines like maintaining payrolls or quickly rehiring employees.
While the pandemic has been tough for his neighborhood bar, he counts himself lucky that it’s survived. He doesn’t know what’s in store the next few weeks.
“It’s like being on pins and needles. It’s horrible to wonder if the government is going to allow you to open your businesses,” Fabre said.
He doesn’t think some businesses, like those who don’t own their building, will be able to open without grant help. Fabre said the federal government has a lot more work to do.
“It’s a bad situation,” he said. “Congress has really screwed us.”
As businesses like Fabre’s lay off or furlough employees, more are anticipated to file for unemployment.
Since the crisis began in March, the Employment Security Department has paid more than $12.2 billion in unemployment benefits to over a million Washingtonians.
Of Washington’s 57,915 initial unemployment claims, Pierce County accounts for 7,765 in the state’s latest data.
Dammeier is concerned about the domino effect of the new restrictions.
“I’m very concerned about unemployment, and (the restrictions) will likely increase those numbers,” he said.
Hair salons like Kory Brown’s Great Clips local franchise have seen a 35 percent drop in sales. They have received rental relief and other help from the Tacoma-Pierce County Economic Development Board.
“We are not breaking even. We are absolutely depending on government aid to survive,” he told The News Tribune.
He employs 27 employees. Brown has prepared to be conservative with cash management and added some personal investment to keep the hair salons going until a vaccine is widely available.
Cole Graphic Solutions’ owner Stacey Ogle has come to terms with the possibility of closing her Tacoma-based business early next year if things don’t improve. Her 30-employee manufacturing company has received PPP funds and CARES funding.
The manufacturing employees have all gone part-time and are receiving health benefits, Ogle said, but sales have dropped to the point where she is personally propping up the company.
“We are family, and we care deeply about our employees. We wouldn’t be here without them,” she said. “It’s heartbreaking.”
She doesn’t believe any more help from the government will come, but she’s also for a smaller government and less spending.
“I think we have lost faith in my government to do anything right now,” she told The News Tribune. “We will find a way, even if it means the end of a 90-year-old business in the spring. There is no assurance.”
Nonprofits like the Children’s Home Society of Washington in Key Peninsula have found the CARES funding a godsend, executive director Gina Cabiddu said. So many families needed rental and utility assistance, there is a queue to receive help, she said.
“We’ve blown through all of that money quickly,” Cabiddu said.
She is worried that fewer jobs will result in a higher unemployment rate and ultimately homelessnesss when the eviction moratorium ends on Dec. 31.
The resource center is relying more on private donors to pick up what the public sector might not provide, Cabiddu said.
Because of CARES funding, nonprofits have been able to keep up with the growing needs stemming from the COVID-19 pandemic, said Dona Ponepinto, president and CEO of the United Way Pierce County. To continue a high level of service might mean growing staffing and financial resources to keep up.
“(Nonprofits) are not without concern about how long can you maintain that level of intensity and having the capacity to continue help people,” Ponepinto told The News Tribune on Thursday. “Because what we’re seeing is that this is going to be a lot longer than we all imagined.”
Hospitals
Local health care systems with hospitals across the Puget Sound have said while CARES Act funds were insufficient to cover financial losses of the pandemic, government dollars would be helpful.
MultiCare’s spokesperson, Marce Edwards said public dollars were crucial at the beginning when all non-emergency procedures were suspended.
“Support from the federal government on supplies helped us get through,” Edwards said. “ We needed it to open up a COVID-19 ward and get all the ventilators.”
MultiCare, which owns Tacoma General, Mary Bridge Children’s and Good Samaritan, received $69.3 million in CARES funding directly from Health and Human Services.
“Additional federal funds would be helpful, but without them MultiCare will be able to continue as a vital community asset,” she said.
Cary Evans is CHI Franciscan’s vice president for communications and government affairs. Evans did not detail how much the company received but said it ran out of CARES funds earlier this year. The relief did not come close to matching economic losses during the pandemic.
He said more federal assistance is still urgently needed to support significantly increased testing, contact tracing, and providing personal protective equipment.
