The city of Hutchinson must decide how to use $1.07 million in federal CARES funding to respond to the COVID-19 pandemic.
The money — $853 million — was distributed to Minnesota cities, counties, food shelves and food banks by an executive order from Gov. Tim Walz. Hutchinson's share, which it applied for, is based on $75 per capita. Now it must determine where that money can best be used. City Administrator Matt Jaunich said about $200,000 can be used to help the city recover expenses such as leave pay for staff that was higher than usual, unemployment costs and safety upgrades in city facilities. But that leaves $875,000 to be spent.
Some small, miscellaneous costs at Hutchinson Utilities and the Economic Development Authority could qualify, and money could be used to hire consultants for COVID-related purposes, but during a July 14 discussion, City Council members seemed most interested in providing assistance to local businesses. Money that is not used will be sent to the county. If the county doesn't spend the money, it will return to the state and, ultimately, the federal government if not used.
"This funding comes with some pretty strict requirements of how we use it," Hutchinson Finance Director Andy Reid said.
Funds must be for expenditures made necessary due to the public health emergency. Expenditures must not be budgeted expenses and they must have been incurred from March 1 to Dec. 30, 2020. If money is given to businesses, the city is responsible for making sure it is used correctly.
"If we do utilize these (funds) for small businesses, it can't be for revenue shortage," Reid said. "It has to be used for expenditures such as their mortgage or rent payments. It can be used for unemployment costs. Really, any cost they would have incurred due to the pandemic."
Property taxes would not qualify, for example. Costs from COVID-19 incurred by homeowners and renters would qualify, as would delinquent rent during the emergency period. The only utility that would qualify for payment would be electricity.
"Eight hundred grand seems like a lot of money, but it's not going to go very far," said Council Member Chad Czmowski.
He suggested using the money for loans earmarked to be used for certain purposes in order to help as many businesses as possible. The CARES money cannot be used for any purpose that already received federal funding earlier in the year. But Czmowski suggested rent assistance could still play in if a business received prior assistance, as new assistance could still go to later rent payments.
Council members discussed potentially using the funds for businesses hit the hardest, and able to do the least work, such as restaurants and salons.
"Small businesses — they need the help," said Council Member Mary Christensen.
City staff will use the council's input to create a plan for review at an upcoming meeting.
