COVID-19 – Funding and Operational Requests

Background

As COVID-19 continues to change our collective operational landscape, CSDA is engaged with the Governor’s administration, State Legislative leadership, and Congressional staff, as well as working with city and county associations to monitor anticipated activity so that we can keep special districts informed and continue to advocate for your needs.

CSDA is actively advocating for special district needs at the state and federal level and is communicating the COVID-19 challenges special districts are confronting.

Active Covid-19 Calls to Action

Fifth COVID-19 Federal Relief: State and Local Government Funding

The federal government has taken steps to provide economic relief in response to COVID-19. Unfortunately, the COVID-19 relief packages that have been signed into law to date provide limited opportunity for special districts to benefit and essential needs remain unresolved. Special districts need access to critical funding to continue operations and well-serve their communities in these unprecedented times.

Senator Kyrsten Sinema, D-Ariz., and Senator John Cornyn, R-Texas, introduced S.4308, a Senate companion to H.R. 7073, the Special Districts Provide Essential Services Act. Senator Kamala Harris is an original cosponsor and was moved forward with the support of Senator Dianne Feinstein.

The bill uses text of H.R. 7073, but adds greater flexibility for states with less reliance on special districts within their communities and offers states guidance on how to distribute the 5 percent they must direct of future Coronavirus Relief Fund appropriations. Overall, the bill would:

• Would require states to distribute 5 percent of future Coronavirus Relief Fund allocations to special districts within their respective state within 60 days of receiving funds from the U.S. Treasury.
• Special districts applying for funding would submit information to their state demonstrating the degree to which they have experienced or anticipate they will experience COVID-19-related revenue loss, grant/inter-governmental revenue loss, or increased COVID-19-releated expenditures.
• Limits allocations such that a special district may not receive funding that exceeds the amount the district expended in any quarter of 2019. Special districts providing services the federal Cybersecurity and Infrastructure Security Agency deems to be within a “critical infrastructure sector” would be exempt from limitations.
• Provides flexibility for states with excess funds reserved for special districts that make a good faith effort to distribute funds to districts within the state. States file a waiver with U.S. Treasury after 60 days demonstrating how the state distributed its special districts funding. If approved, the state may use the balance of the funds for other COVID-19 response purposes.
• “Special district” would be defined as a “political subdivision of a State, formed pursuant to general law or special act of the State, for the purpose of performing one or more governmental or proprietary functions.”
• Would direct the U.S. Department of Treasury to consider special districts as eligible issuers to take advantage of the Municipal Liquidity Facility, as established in the CARES Act, for access to capital during the current financial downturn.

CSDA will continue working with the National Special Districts Coalition and a group of California and national special districts stakeholders to advocate for the Senate legislation to be included in the Senate’s COVID-19 relief package, which would likely be negotiated with the House of Representative’s HEROES Act. CSDA joined 44 other special districts organizations from across the country in a letter (linked to PDF) to Senate Majority Leader Mitch McConnell, R-Ky., and Senate Minority Leader Chuck Schmer, D-N.Y., in support of S. 4308 and to convey urgency for its inclusion in the impending COVID-19 relief bill for local governments.

H.R. 7073 the “Special Districts Provide Essential Services Act
This is a stand-alone U.S. House bill that would allow special districts’ access to federal COVID-19 resources.

HR 7073 is a direct result of special districts’ COVID-19 advocacy. Congressman John Garamendi began collaborating with CSDA on the “Special Districts Provide Services Act” in late April after his constituent special districts reached out with great concerns regarding financial hardships. Now, all special districts are asked to build on this support

Bill overview:

• Provides special districts access to the Coronavirus Relief Fund: States would be required to direct 5 percent of future appropriations made under Section 601 of the Social Security Act (established in CARES as the Coronavirus Relief Fund). The state would have 60 days from the time the U.S. Treasury releases the fund to transfer the funds to special districts. The state would grant the funds at its discretion.
  • This 5 percent is not intended to subtract from cities and county’s portion of the funding, but rather 5 percent from the state’s allocation under Section 601.
• Special districts would be determined “eligible issuers” for the Federal Reserve’s Municipal Liquidity Facilities Program.
• “Special District” would be defined. There currently is no federal statute defining the term.
  • The term ‘special district’ means a political subdivision, formed pursuant to general law or special act of a State, for the purpose of performing one or more governmental or proprietary functions.’’

Special District COVID-19 Financial Impacts

The emergence of the novel COVID-19 pandemic, the Governor’s statewide stay at home order on March 19, and local response efforts has resulted in a statewide public health and economic crisis. California’s special districts have not been immune to the economic impacts and seek federal and state partnership to grant impacted districts access to fiscal assistance and financial tools so they may continue to stand ready to provide essential services to their community when the next disaster strikes. COVID-19 halted the economy, shifted business procedures to remote operations, and placed many special districts on the front lines of COVID-19 response to meet the needs of their communities. Other districts had operations abruptly halted, with revenues also halted. Special districts, like our partners at cities and counties, are delivering essential services to California’s communities. However, unlike cities and counties, special districts been excluded in state and federal funding determinations to date. 

COVID-19 Impacts on the Nation's Special Districts

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CSDA, in partnership with the National Special Districts Coalition, surveyed special districts across the country regarding COVID-19 impacts. Based on the survey, special districts collectively are anticipating a $30.5 billion impact due to revenue losses and expenditures related to the pandemic. Nearly 15,000 special districts across the country are facing the likelihood or uncertainty of reducing essential workforce, and 58 percent facing the same in providing services to their communities.

New This information is a resource to share with federal representatives as special districts continue advocacy on the Special Districts Provide Essential Services Act and the push for its inclusion in the pending federal relief package. To see these results click here.

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Results from the most recent CSDA survey of COVID-19 impacts on special districts are now available. Overall, special districts are resilient and fiscally prudent and continue to fulfill their mission to deliver critical services and operate critical infrastructure California communities rely upon despite the effects of the current health crisis. However, while just 24% of districts indicated they will be experiencing  significant budgetary challenges by June 2020, that number increases to 76% by June 2021 without the partnership of federal and state leaders granting special districts access to fiscal assistance and financial tools that would help districts rebound from the economic impacts of COVID-19 so districts can continue to stand ready and resilient against the next disaster.

This survey was a follow up to the April survey CSDA conducted to evaluate the immediate impacts COVID-19 had on special districts, constituents, and communities. To see these results click here.

As we continue to face the impacts of COVID-19 together, CSDA is actively working with the Governor, State Legislature, and Congress to access resources for special districts. Determinations as to how billions of dollars in state and federal aid will be distributed is happening now, in real time, and CSDA is utilizing this current data to advocate on your behalf. Please contact your state leaders and ask for their support in including special districts in any future local government funding and let them know your district’s story about COVID-19 response and impacts.

Stay Informed and Keep Communicating with CSDA and Fellow Districts

• Join the COVID-19 Community if you have not done so already, and post your questions and feedback for your peers via that forum – we are all in this together, and this is one way districts can lean into the situation by leaning on each other
• Reach out to your CSDA Public Affairs Field Coordinator with focused feedback to help inform and guide our advocacy efforts at the federal and state levels:
  • Chris Norden, chrisn@csda.net, Northern Network
  • Dane Wadle, danew@csda.net, Sierra Network
  • Colleen Haley, colleenh@csda.net, Bay Area Network
  • Charlotte Holifield, charlotteh@csda.net, Coastal Network
  • Cole Karr, colek@csda.net, Central Network
  • Chris Palmer, chrisp@csda.net, Southern Network
• Track all your COVID-19 related costs and losses, so that CSDA can continue to advocate for your needs in the short and long term
• Check CSDA eNews, the COVID-19 Resources page, and other CSDA communications regularly for new updates, offerings, and opportunities to stay informed on the most recent guidance. Email updates@csda.net to update contact information to ensure you and your colleagues receive this timely information.
• Be ready to support CSDA advocacy efforts and engage in the advocacy process when the timing is right.

H.R. 7073 Support Letter

S. 4308 Support Letter