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Monday, October 19, 2020

Special Districts continue to be left out of COVID-19 relief

Posted By on Mon, Oct 19, 2020 at 4:36 PM

The U.S. House of Representatives released an updated version of The Heroes Act on Sept. 29, addressing some of the needs that have developed since the bill was passed in May. However, that update didn’t include the changes that special districts have been advocating for.

The updated version of the bill proposes $2.2 trillion to support small businesses, create additional assistance for airline industry workers, funds to bolster education and child care, and maintains key priorities from the initial legislation. Those priorities include supporting testing, tracing, and treatment for the coronavirus; a second round of economic impact payments; ensuring worker safety, restoring unemployment benefits, and bolstering housing assistance.

California’s special districts are anticipating a $1.26 billion impact through fiscal year 2021, according to Charlotte Holifield public affairs field coordinator for the California Special Districts Association.

The financial impact, she said, is causing 54 percent of districts to be uncertain or likely to reduce their essential services and 46 percent to be uncertain or likely to reduce their workforce through June 2021.

Special districts have been largely left out of relief funds because under the Cares Act for the Coronavirus Relief Fund, the U.S. Department of Treasury doesn’t consider special districts to be a local unit of government. Local units include cities, counties, parishes, towns, and townships. But special districts often provide unincorporated communities with services such as water and sewer, health, parks and recreation services, and emergency response.

San Luis Obispo County has 15 community services districts and nine special districts, which are categorized as health, tourism, services and safety, and environment districts. Six of those districts submitted letters in support of House Resolution 7073—Special Districts Provide Essential Services Act. The resolution would ensure that fire, sewer, water, and public utilities, flood control, and public health special districts are eligible to receive future federal coronavirus relief.

Holifield said HR 7073 would allow a portion of resources provided in future COVID-19 relief appropriations to be directed toward special districts. The bill would also enable special districts to use the Federal Reserve’s Municipality Liquidity Facility program as a tool to access capital during an economic downturn, she said.

“Without access to federal resources, special districts will continue falling into economic distress, deferring maintenance, delaying capital projects, reducing staff, and cutting services to our communities,” she said.

The Special Districts Provide Essential Services Act was introduced in the House on June 1 and referred to the Committee on Oversight and Reform and the Committee on Financial Services. Further action on the bill has not yet been taken. ∆

—Karen Garcia
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