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Travis County considers direct financial allocations to smaller cities

Friday, May 29, 2020 by Jessi Devenyns

Twenty-one municipalities in Travis County did not receive direct allocations of financial assistance either from the state or the federal government to help temper the economic impact of the coronavirus pandemic. To help fund relief efforts for their residents, those cities jointly requested a total of $26.2 million from the county’s total federal assistance of $61.1 million.

Travis County had originally anticipated assuming the responsibility of portioning out the $61.1 million to assist in disaster relief efforts during the pandemic. To equitably distribute this money throughout the county, Travis County hired a third-party consultant, Guidehouse, to help determine the most judicious use of the funds. The county has already committed $10 million to aid small businesses and $10 million for direct rental and mortgage assistance.

However, in a letter to Travis County presented at the Commissioners Court on May 26, the cities asked to develop targeted health, safety and economic initiatives on their own, given their familiarity with their residents’ needs. Furthermore, they said, “The remaining monies that total approximately $34,820,071 should afford the county ample resources to provide county-wide services in the incorporated and unincorporated portions of the county.”

Despite the formal request, both county staff and commissioners were hesitant to directly administer funds to these municipalities.

Economic Development Director Diana Ramirez told the Commissioners Court that the requested $26.2 million was 315 percent greater than the per capita amount offered by the state to other small cities and counties. Additionally, she said, “It puts county staff in a precarious position of who’s going to do what.” She explained that if Travis County provides the requested funds to the individual municipalities, the county will be responsible for any misused federal dollars. There is also a risk of duplicate expenditures for programs and services.

To avoid those scenarios, she said, “The staff would recommend that you go with a reimbursement only.” Eligible reimbursements will come from expenditures that fall into one of the cost categories authorized under the CARES Act.

As an alternative to a reimbursement strategy, Ramirez outlined three other formulas for direct funding.

Currently the cities within Travis County, excluding Austin, are requesting an allocation of $197 per person for the 133,000 individuals in these jurisdictions. However, calculations from the Planning and Budget Office show those financial allocation numbers are whittled down $48 per capita when taking into account the county’s responsibility to provide civil and criminal justice systems, county jail, county roads, and social service safety net benefits to every resident in the county. Using this formula, which divides the county’s total $61.1 million in federal assistance by the population of the county, Travis County needs to distribute $6.4 million among the 21 municipalities.

Another option determines the distribution for smaller cities using the CARES Act formula. In this formula, Travis County will be responsible for $2.8 million in funding for these municipalities. A third option would employ the CARES Act formula in conjunction with a proportional increase for the countywide services provided by Travis. In that scenario, the county’s financial responsibility jumps to $10.4 million to distribute proportionally among the requesting cities.

Commissioner Brigid Shea called the outlined financial assistance alternatives “very reasonable and very well researched.” She said she considers it the responsibility of the state to fund the smaller municipalities, rather than having the allocations distributed through the larger counties that received federal funding directly.

The state of Texas retains $6.1 billion after allocating $3.2 billion to cities with populations greater than 500,000. Although Travis County requested additional funding from the state, along with 10 other counties, the state responded in a letter, “It is unreasonable to demand additional dollars be allocated locally at this time. It is our expectation that you will work with the smaller municipalities within your jurisdiction to allocate money for them in a fair and equitable manner.”

With only the county’s federally allocated budget to work with, the Commissioners Court took no action on the matter and Ramirez said the county will continue consulting with Guidehouse to develop a strategy to allocate its remaining $41 million.

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