Coronavirus Relief Fund Dollars to be Distributed to Cities and Counties; Certification Letters Due May 22

May 20, 2020

Virginia counties and cities received a memorandum from Secretary of Finance Aubrey Layne on May 12 announcing the proposed distribution of dollars to each county and city from the Coronavirus Relief Fund allocation provided to the state in the Coronavirus Aid, Relief, and Economic Security (CARES) Act of 2020.  These funds may not be used to replace lost revenues, but will help compensate localities for the significant expenses incurred in responding to the COVID-19 pandemic.  Virginia received approximately $3.1 billion in Coronavirus Relief Fund dollars (excluding the approminately $200 million provided directly to Fairfax County, the only locality in Virginia to meet the CARES Act’s population threshold to qualify for direct distributions from the federal government), and is distributing approximately $645 million to local governments, the equivalent of half of the funding that was sent to the state based on local populations.  An additional distribution may be made later in the summer, possibly based on an alternative formula, although no commitments have been made to provide more funding directly to localities.

The state is distributing the $645 million to cities and counties based on population, and requiring that counties provide “an equitable share” of their funding to the towns within their boundaries.  In order to receive their allocations, counties must certify that funds will be used for eligible expenditures in accordance with the CARES Act and associated federal guidance, and acknowledge that the state may recoup any funds used for ineligible purposes.  The certification form must be submitted by May 22.  Distribution is expected to be made in early June.

Governor Ralph Northam held a call with VACo’s Board of Directors on May 13, and Secretary Layne provided an overview of the proposed distribution process as part of that discussion.  The statutory language of the CARES Act regarding use of the Coronavirus Relief Fund is relatively general, and although the U.S. Treasury has developed guidance and a set of Frequently Asked Questions, county administrators and local staff have requested clarification and additional guidance on a number of items.  Although no further guidance is expected to be forthcoming about what constitutes an equitable share of funding for towns, Secretary Layne has agreed to review a list of questions that will be compiled and submitted by VACo, working in partnership with VML and a workgroup of local budget and finance directors who have been collaborating on issues related to the effect of the pandemic on local budgets.  VACo will continue to work with its state and federal partners and will communicate any additional information to members as it becomes available.

VACo Contact:  Katie Boyle

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