The federal Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed into law on March 27th, 2020. The $2 trillion economic relief package provides funding to individuals, businesses and governments in response to the economic and public health related impacts of COVID-19. The City of Bakersfield did not receive a direct allocation from the federal government, however the State has allocated $33.5 million to the City as part of its Fiscal Year 2021 budget that was recently enacted. City staff has submitted the necessary paperwork to the State Department of Finance in order to receive these funds.
CARES Act funding can generally be used to cover expenses that:
- are necessary expenditures incurred due to the public health emergency with respect to the COVID–19;
- were not accounted for in the budget most recently approved as of March 27, 2020 (the date of enactment of the CARES Act) for the State or government; and
- were incurred during the period that begins on March 1, 2020, and ends on December 30, 2020
The U.S. Treasury issued initial guidance, which is continuing to evolve, describing eligible uses for CARES Act funds. Based on guidance provided by the Treasury and the State Department of Finance, the City's initial utilization plan has been developed to include proposed funding for small businesses, resources dedicated to the City's most vulnerable populations and for reimbursement of City expenditures incurred in response to COVID-19, such as eligible public safety-related costs and acquisition of supplies and materials necessary to mitigate the spread of COVID-19. CARES Act funds cannot be used to backfill anticipated lost revenue or for payroll costs for employees not substantially dedicated to responding to the COVID-19 health emergency. A detailed proposed allocation plan is attached to this administrative report and additional detail will be provided in a presentation by the City Manager's Office.
To remain in compliance with the State, the City must begin to expend these funds on eligible costs immediately and report these initial costs to the State no later than September 1. Future allocations from the City's CARES Act allotment will be dependent on the City's ability to remain in compliance. Initial guidance from the Treasury requires all funds to be spent or obligated (with a 90 day liquidation period) no later than December 30, 2020.
Upon approval of this plan, City staff will bring back applicable agreements to execute individual components of the plan to the City Council for approval.