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New Castle County, DE buys hotel with Covid Relief Funds (CRF) to protect most vulnerable residents

County of New Castle

New Castle, DE

New Castle County was able to leverage the $322 million they received from the CARES act via the Coronavirus Relief Fund (CRF) to invest in and build new programs that expanded homelessness support, childcare infrastructure and renter assistance to protect their most vulnerable residents.

Topics Covered

Economic Inequality
Food Insecurity
Infectious Disease
Asset Management

Cost

Initial: Zero Upfront Cost

Funding

Federal grants

Project Status

Operational since 2020

Gov Champion

Chief Financial Officer

Problem Addressed

New Castle County wanted to utilize its CARES Act funds to protect its most vulnerable residents but needed to fit spending within federal guidelines.

Representing nearly 60 percent of Delaware’s total population, New Castle County received $322 million in direct Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funds via the Coronavirus Relief Fund (CRF). Concurrently, the state of Delaware received $927 million for its more than 900,000 residents. As one of only three counties in the state, New Castle was the only county to receive direct CRF dollars, collecting more than 1/3 of the state's total allocation.

CARES is a unique funding vehicle that came with little guidance, but a lot of guardrails. It was meant to create broad and immediate support for the community, but left local governments confused about what funds could be used on. This opened up the opportunity for officials to incorrectly allocate funds and owe the federal government money at the end of the year.

With the funding New Castle County had three goals in mind: to eradicate COVID-19, protect the most vulnerable populations, and build back better, bringing jobs back to the community. The county additionally sought to collaborate with state budget officers to support the needs of both county and state residents, seeing the opportunity to bolster the capacity and capability of state programs through a cost sharing formula designed to account for program benefits. Ultimately, the county was searching for best funding practices to protect their vulnerable residents.

Solutions Used

The county created a strategic spending plan to ensure their CARES Act funds were used to benefit those who needed it the most.

New Castle County needed a sound plan for fund utilization, ensuring that every penny spent held up to treasury standards and federal FAQs. Grant Thornton assisted the county's advisory committees, helping them through project ideas and building their cases for eligible fund usage. The team was responsible for monitoring the funding down to each municipality.

Municipalities would create proposals for spending their funds, which the Grant Thornton would look over and ensure the allocation was appropriate, effective, and regulation compliant. By helping local government officials understand the eligible expenditures, the team issued recommendation reports for funding usage. As a result, New Castle County's advisory committees have an internal policies and procedures document for CARES act funding. This will be crucial to guiding future ARPA funding.

New Castle County acted on best practices for sharing funds with the state - with a total of $170 million of the county's $322 million going directly to the state to leverage existing grant programs in tourism, business, and leisure. The county saw an opportunity to bolster the capacity and capability of state programs through a cost sharing formula designed to account for program benefits for New Castle residents. These funds were used to aid the county's citizens - used across essential childcare services, statewide testing and contract tracing, the unemployment insurance trust fund, enhanced rent and utility program, and hospitality emergency loan program.

When the county decided to buy a former hotel using CRF funds, they needed clarification that this was a legal, valid expenditure within their jurisdiction. Grant Thornton did a thorough overview, and because of fund usage to combat homelessness in the face of COVID-19, they were able to build the hotel out into the Hope Center, housing over 200 individuals within weeks of opening. Similar analysis was applied to the volunteer fire department, where the department was advised on budgeted costs and how CRF funds could not used on such items. This included expenditures they were 'reasonably' expected to buy prior to the pandemic from medical gloves to oxygen tanks. Items like face masks came unprecedentedly, leaving opportunity to use CRF funds.

The team continues to work with the fire department, guiding the funding around overtime workers which have become particularly prevalent in the face of the national labor shortage.

Outcomes

1

Opening of the Hope Center, built out of a former hotel, which was able to safely house over 200 individuals experiencing homelessness within weeks of opening

2

Ensured the volunteer fire department properly utilized funds, purchasing only essential, non-previously budgeted items

3

Prevented many childcare programs from reducing their capacity or closing completely with a grant/subsidy program focused on childcare infrastructure

4

Creation of COVID-19 testing laboratory that allows the state and local govt. to invest millions of additional stimulus dollars in local institutions, through the purchase of COVID-19 tests

5

Emergency housing assistance to renters affected by shutdowns due to COVID-19, with 70% of the participants residing in New Castle

Lessons Learned

1

The funding procedures and guidelines can be used by the county to better inform their spending strategies for the upcoming ARPA funds.

Something Unique

Non-profit Friendship House has worked with the Hope Center, providing staff 24/7, representing a strong partnership between local government and non-profits! The county then formed a 501(c)(3) to support further fundraising efforts to keep up Hope Center operations.

Who Should Consider

Cities, counties, or states that have recently been awarded large sums of funds looking to validate potential fund allocation.

Last Updated

Mar 21st, 2022
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