No more county government furloughs as Santa Cruz supervisors OK federal aid spending plan

With a financial shot in the arm coming Santa Cruz County’s way via close to $53 million in federal aid, county supervisors on Tuesday unanimously approved a multi-year plan to fund the county’s ongoing COVID-19 response, recover revenue losses brought on by the pandemic and roll back staff furloughs.

Santa Cruz County’s share of the Biden administration’s stimulus package — called the American Rescue Plan — is set to hit county coffers in two equal installments, one expected next month and the other a year later.

The much-needed federal relief — totaling $52.99 million for the county, with cities, school districts and the Santa Cruz Metro bus system receiving their own allocations — will allow officials to address some “structural budget problems” over the next two years, said Christina Mowrey, the county’s budget manager. County supervisors are also mulling to use about $1 million from the funding to expand broadband access in the county, bolster trade apprenticeship programs and support business development for women- and minority-owned businesses and cultural institutions.

Among some of the biggest developments for the county thanks to the federal aid package is that it will be able to eliminate its staff furloughs sooner than originally anticipated.

More than 2,300 employees are now being furloughed — taking unpaid days off — for between 5% and 10% of their work schedules. County officials are now looking to end that cost-saving measure, put into place in July 2020, in the coming months.

In the budget for the coming fiscal year — which runs July 1, 2021, through June 30, 2022 — officials will be recommending that the county eliminate half of the staffing furlough, said Erich Friedrich, a senior administrative analyst in the county administrative office. The federal funding will then help close the rest of the gap.

“With this revenue loss recovery from the (American Rescue Plan Act) funds we can now look to eliminate the second half of the furlough this coming July,” he told supervisors. “So really excited. Our staff has worked extremely hard this past year, responding to multiple emergencies, and doing so under furlough is it just a tremendous task.”

The federal money, much of which is part of next fiscal year, also will help the county restore some of its reserves and gives it some breathing room as officials wait to see when and how much reimbursements from the Federal Emergency Management Agency are approved.

There can be a “considerable” lag between when the county files a claim with FEMA and when it actually receives the funding, Friedrich said. Through December of last year the county has submitted to FEMA about $22 million in eligible claims, of which only about $2 million has been approved with that check expected to arrive in the coming weeks.

That creates two separate issues: First, a budgetary shortfall, which officials are hoping to cover with available contingencies. Secondly, a hard cash shortfall, which the county will be able to cover with temporary loans from other trust funds.

Until the county receives its FEMA reimbursements, the solution is to use the federal funds to offset those reimbursement delays, Friedrich said.

The federal stimulus dollars will also be spread to 45 different programs — from various parks and recreation programming to expanded emergency paid sick leave — across 11 county departments.

Many of the programs are a continuation of COVID-19 programs that were originally funded with the 2020 Coronavirus Aid, Relief, and Economic Security Act funding, Friedrich said.

“So many of these are just continuations of things we’ve already been doing,” he told supervisors. “Many of these programs provide targeted assistance to vulnerable residents and to our communities.”

The county has until Dec. 31, 2024, to spend the relief aid. County officials believe that most of the funding will be spent by September of this year, though some programs may extend later into 2022 or 2023, said Friedrich.

County staff on Tuesday were also looking for direction from supervisors on how best to use about $1 million in funding from a specific bucket related to the pandemic response.

Supervisors Zach Friend and Ryan Coonerty pitched to allocate that money toward a trio of needs:

• $500,000 to expand broadband access in the county in an effort to help bridge the “digital divide” laid bare by the pandemic;
• $300,000 for apprenticeship programs for the trades, which Coonerty said are “oversubscribed” right now, to help create “good-paying jobs” and “create a workforce for the future”;
• $400,000 for programs to support business development with a focus on women- and minority-owned businesses and cultural institutions.

“These are three demographics that were hard hit by this pandemic and I think if we can partner with the small business development center and some other programs, we can really help foster a next generation of business owners that can help reestablish jobs, reestablish a tax base, and create the sort of vibrant economy we want,” Coonerty said, adding that he and Friend are hoping to carve that funding out as good investments for the community that will hopefully pay dividends in the short- and long-term.

Supervisors agreed to direct staff to explore the proposal and return with recommendations for those programs in a month.

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