The Leesburg Town Council decided Tuesday night how to spend its remaining CARES Act funds ahead of the Dec. 30 federal deadline. The debate leading up to that vote led to a bit of controversy.
By a 4-2 vote, the council voted to allocate the remaining $3.6 million, of the total $9.8 million the town was awarded, to reimburse itself for the cost of Police Department salaries from the start of the fiscal year, July 1, to Nov. 13. Total personnel costs for the Leesburg Police Department over that time period are $4.5 million but, of that amount, only $3.9 million is eligible for reimbursement under the CARES Act guidelines. The remaining $600,000 accounts for administrative and dispatcher salaries, which are not eligible expenses.
There was a general feeling of malaise evident on the council dais that more of the town’s CARES allocation was not able to benefit residents and businesses. The town did two rounds of grant funding to both town-based businesses and local nonprofits, awarding just under $3 million to 344 town businesses, and $1.4 million to 27 different nonprofit organizations. Although the application period is still open for another five days, so far the town has received 18 applications accounting for $72,00 in reimbursement requests for tent and heater purchases or rentals from town eating and beverage establishments, in a grant program that opened just a few weeks ago. Town government response efforts to COVID-19 also account for $1.9 million in funding allocations, for things like building modifications, enhanced cleaning, and support for the weekend downtown outdoor dining program.
Deputy Town Manager Keith Markel pointed to the estimated $5.5 million shortfall Leesburg is facing in its current fiscal year 2021 budget. He said that the $3.6 million that the town can be reimbursed for Police Department salaries can go a long way towards closing that deficit. If the council did not support using the funding in that way, the town would be required to return remaining CARES funding to Loudoun County.
“You have $3.6 million that is going to be left over or fall out. You have an eligible expense that you can apply that to. Why would you not take that,” Town Manager Kaj Dentler asked.
Dentler explained that, after the $3.6 million CARES fund reimbursement is allocated, that same amount would be taken out of the Police Department budget and placed in reserves to help close the deficit.
He said not taking advantage of the available funding would be a “catastrophic” decision and that the council would be “shooting [itself] in both feet.” Closing the deficit could require dire measures such as raising the real estate tax rate, which Dentler stated is not his intention, cutting services, or reducing town staff.
Councilman Ron Campbell said he wanted to ensure that the remaining CARES funds are used to close the deficit, and not other expenses in the General Fund. He received support from a majority of the council for a motion that stipulated the funds could not be expended until the audit for fiscal year 2021 is presented, likely late next year.
“There’s an economic reality; we’re not out of the woods,” he said. “Any use of this money to do anything else I think is not appropriate.”
Campbell also expressed disappointment that more CARES funds were not used to support residents, nonprofits and businesses.
“I don’t want anyone to think that somehow we did the best. I’m not talking about job performance [of town staff]. I’m talking about the use of the funds,” he said.
Councilman Tom Dunn said that the town did not need money for Police Department salaries which have already been paid, and suggested that town staff just found a creative way to put money in the General Fund which ultimately can be used for other expenses. He also pointed to the three incoming Town Council members who take office Jan. 1, and said some of them, along with some current council members, have expressed a desire to purchase the former Westpark Golf Club property.
“Frankly, I think that’s what the goal is here,” he said. “It was convenient that these funds are equal to the funds that were going to be given for Westpark.”
Both Dentler and Town Attorney Christopher Spera said town staff has not been engaged in any talks about purchasing Westpark since a council majority decided against moving forward with the matter some months back. Mayor Kelly Burk said Dunn’s accusations were “the most ridiculous thing I’ve heard of” and also pointed out how closing the deficit can benefit town residents.
“We can’t be so cavalier as to suggest that helping people by lowering taxes or not raising their taxes is not a good thing,” she said.
It was noted during the debate that the future council could not be bound by this decision, and ultimately could choose to expend the funds however members saw fit.
The 4-2 motion to endorse the CARES Act spending plan, which included the $3.6 million reimbursement for police salaries, passed with Dunn and Vice Mayor Marty Martinez dissenting. Campbell’s motion that asks that the funding not be appropriated until after the audit next year passed 5-1, with Dunn opposed.