How local governments can utilize CARES funds for tech

Municipal decision makers are typically unaware of how they can utilize the federal funding under the CARES Act to procure technology that supports the objectives of the CARES Act.

A robust research suggests that in practice, CARES funding can be utilized for technology improvements, subject to compliance with the permissible expenditures under the CARES Act. In other words, there is an art of judgement involved with how local governments phrase their justification to utilize CARES funding for tech and other causes.

The prevalent interpretation of  “Permissible Expenditures” under the CARES Act is that such COVID-related public health measures are deemed to include direct and indirect necessary expenditures incurred due to the pandemic. In other words, expenses incurred due to social distancing and business closure regulations should fall under the umbrella of expenditures covered by the CARES Act.

Let’s take a look at several examples of how local governments approached phrasing their justification for permissible expenditures under CARES of technology improvements:

  • City of East Wenatchee, WA Overhauls Website

The city voted on Sept. 17, 2020, to adopt a resolution to allocate up to $50,000 of the city’s CARES Act funds to design a new website. Events Director Trina Elmes, who crafted the initiative’s RFP, said that the CARES Act requires that the funds are used for necessary expenditures “incurred due to the public health emergency with respect to COVID–19.”

“With our City Hall shut down, community members need more online options and our current website is very outdated and can’t handle those functions,” said Elmes. “We also needed a more robust way to get COVID-19 information out to the community and our current website just wasn’t designed for that kind of thing.”

The City entered into a professional services agreement with CivicPlus to design, build, and implement a new website and intranet, according to the RFP. 

  • City of St. Petersburg, FL Implements Software for Business Resource Planning

The City of St. Petersburg, FL used CARES Act Funds to give businesses a financial reporting tool that allows citizens to explore budgets and other data online, hoping to give local businesses a better chance of withstanding the challenges brought on by the pandemic. 

“The sense of urgency around improving workflows to serve customers is higher for these functions amidst COVID-19, and they are leading their local governments in adopting a customer experience mindset,” said Director of Customer Marketing Stephanie Beer at OpenGov.

  • Carteret County, NC Purchases Technology to Ensure COVID-19 Guideline Compliance

The majority of Carteret County, NC’s $1.3 million CARES Act funds went toward purchasing new technology that would help the county comply with COVID-19 safety guidelines. 

“We’re primarily going to use our funding for technology needs, and we are putting our money in the category ‘Expenses of actions to facilitate compliance with COVID-19-related public health measures,’” County Finance Director Dee Menshaw told the News-Times in June.

This funding went toward purchasing software and software licensing as well as hardware to enable telecommunication and telework.

  • Akron, OH to launch the “Akronite” App to boost its local economy

In August 2020, Akron, OH partnered with Colu to build a customized, city-branded app, called Akronite, designed to propel the resurgence of its small business community. Akron used CARES Act funds to fund this local reward platform that  was recently mentioned in Andrew Yang’s policy suggestion, as part of his bid for Mayor of New York City.

A lot could also be learned also from the City of Overland Park, KS’s failed attempt to utilize CARES funding to install cameras at soccer complex

Johnson County, KS initially approved the funding, $350,000 in CARES Act funds, part of $116 million in its federal relief pool, for the purpose of installing high-tech camera equipment at Scheels Soccer Complex to stream games for anyone who wants to pay, with the city keeping 70% of the proceeds and the rest going to Musco Sports Lighting, which will provide the service. This expense was justified primarily on the notion that social distancing regulation does not enable crowds at soccer games, so this would address the issue by enabling broadcasting of the games.

Although county officials talked with a U.S. Treasury consultant and determined that the request met the requirements, due to extreme political pushback and “the optics of it”, the plan was eventually scrapped. 

These examples illustrate our first point about how local governments phrase the justification to meet requirements of the CARES Act. it’s interesting to see how some maintain a relatively sensible approach, and how others attempted to push the boundaries.

In a new survey, Granicus asked 1,490 government officials and citizens across the U.S. to share what they think government agencies should do to more effectively serve their citizens.

The study found that local governments have an opportunity to harness this increased digital interest and sustained engagement. When the pandemic began, email open and click rates both spiked (22% and 36% increases, respectively) and traffic to local government websites surged 25%.

“Many local governments have wanted to digitize for years, but faced obstacles like limited budgets, bureaucratic processes and legacy systems,” reads Granicus’ recent blog. “COVID-19 created a fresh urgency to modernize, and a unique opportunity for local agencies to set aside these obstacles and reimagine how they connect with citizens.”

This pandemic has demanded that local governments reimagine how they engage their residents but has also created unique opportunities to harness that urgency. The CARES Act is one avenue that has allowed governments to implement new systems that can work to protect small businesses and captivate residents’ interest in their local economies for years into the future.

By Sean Bejell & Rachel Saal

January 24th, 2021