Fresno is getting a tsunami of stimulus money. Here’s how it could be spent
It sounds like a lot of money — Fresno is due to get $177 million from the new federal economic stimulus package and still has $29 million unspent from last year’s allocation — but city officials say it’s a crucial lifeline for a budget that badly needs help.
Washington’s funds will help stave off a $25 million city budget deficit and 250 layoffs — including first responders — Fresno Mayor Jerry Dyer has said.
The city is also eyeing using the federal money for $64 million in community investments, like food assistance and rent support.
And it’s aiming to put $15 million into community improvement projects managed by the city-run Beautify Fresno program, $30 million for community safety and $5 million for payments to essential workers.
Those numbers will fluctuate as the city will wait to see if relief dollars are also available to residents from nonprofits or other sources before the city will step in to fill the gap, City Manager Thomas Esqueda said.
“We’re dialing that in right now. I promise you those numbers will change,” he said
The funds are part of a $65 billion pot of federal money authorized in Washington’s $1.9 trillion stimulus plan, aimed at helping local governments overcome revenue shortfalls triggered by the year-old COVID pandemic.
Critics — mostly Republicans — have said that the money is now largely unnecessary, since the economy has been growing since the summer and many jurisdictions, including California’s state government, see revenues are exceeding estimates.
Rent relief, public safety salaries
Fresno last year received $92 million in federal relief money, and it still had $29 million of that on hand at the end of February, according to internal city records.
Esqueda said the city is on pace to spend all of it by the end of April, noting the largest portion of about $24 million is being used to pay salaries for public safety employees and other workers assigned to virus-related tasks.
Fresno also used some its COVID relief to provide direct assistance for people and businesses set back by the pandemic. The city earmarked about $5 million in rental and mortgage relief programs, as well as about $8 million for small business grants.
Other spending, like the $2 million left to retrofit city facilities and $1.7 million for parks to make them safer, has lagged because it takes time to hire contractors.
“Just because we got the money doesn’t mean we can go out and spend it,” he said, explaining it takes time to use the money properly.
Federal records showed a number of Fresno-area agencies still had money from the first relief package that hasn’t been spent. Many officials disputed the records’ findings.
Fresno County Office of Education spent all of the $2.2 million it received in COVID-19 relief last year, according to Kevin Otto, deputy superintendent. The money primarily went toward purchasing personal protective equipment and other safety measures.
The county education office is interested in receiving an estimated $10 million from Biden’s stimulus, Otto said. “With COVID we don’t know what’s going to happen next,” he said.
Fresno sales tax plummets
Fresno has been hit harder than much of California and the nation. Its January unemployment rate was 10%, down from 10.4% in December. The national rate in January was 6.3% while California’s was 9%.
Its fourth quarter revenues were expected to fall an estimated 30% below expectations, primarily because of a sales tax slump.
Fresno, like other cities, will have leeway in how it spends the funds. Federal guidance for use of the money so far has been deliberately open-ended, since different cities have different needs.
Money can be used to help residents, small businesses, nonprofits and industries such as tourism. It can go for government services affected by a revenue reduction as well as investments in water, sewer and broadband infrastructure.
Cities with more than 50,000 people, such as Fresno, had funding amounts devised by using a formula in place for Community Development Block Grants.
Those federal grants, which help revive and maintain neighborhoods, take into account not only population, but poverty rates and housing stability.
The COVID-related funding triggered an often bitter debate in Congress earlier this month, as Republicans argued the money was often unnecessary and the guidelines too vague.
California taxpayer advocate Jon Coupal, president of the Howard Jarvis Tax Association, warned Monday of a “cash infusion to local governments with no strings attached.”
Supporters have pointed out that the unspent money data is misleading.
“What may look like unspent funds are already earmarked for certain functions,” said Michael Wallace, legislative director, housing, community and economic development at the National League of Cities, talking about unspent money nationwide.
The unspent money estimates, which come from the federal government’s tracking of the COVID relief money, often doesn’t report on funds obligated but not used so far, he said.
“It makes sense to ask about it. It’s frustrating that the data doesn’t show the complete picture,” he said.
This story was originally published March 26, 2021 at 5:00 AM.
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