CASA GRANDE — The effects of COVID-19 on the Casa Grande economy may not be as bad as expected.
Casa Grande Mayor Craig McFarland told the City Council Monday that the city had received the local sales tax figures for the end of the fiscal year. Shared tax revenues for the state had not arrived yet, he said.
Overall, the city received nearly $26.5 million in local sales tax revenue for the year ending June 30, he said, which was an increase over the 2019 fiscal year, which totaled $24.7 million.
McFarland said it was particularly interesting to see that the sales tax receipts for the months of March, April and May this year were also up over the revenues from the same months last year by about $200,000 to $300,000. However, the tax receipts for June 2020 were down by about $300,000 compared to last year.
City sales tax receipts lag by about a month. For example, taxes that are collected throughout the month of June are listed on July’s report and July’s tax collections are reported on August’s report.
The council approved an application to the state for $6.7 million in AZCares funding and to allow City Manager Larry Rains to accept the funds.
The AZCares Fund is the remaining $441 million in Coronavirus Aid, Relief and Economic Security Act money that the state of Arizona received from the federal government. The money is supposed to be doled out to cities and counties that have a population of less than 500,000. Cities like Chandler, Gilbert and Scottsdale are expected to receive between $29 million to $30 million from the AZCares Fund. The state originally received about $1.86 billion from the CARES Act.
The funds can only be used to help cover the payroll and personal protective equipment expenses for public safety and public health employees, Rains said. Gov. Doug Ducey is encouraging cities and counties to swap the money from their general funds that they would normally have spent on public safety with CARES Act money, then take the general fund money they normally would have used on public safety and use it to provide extra services to their communities and local business to support them through the COVID-19 pandemic.
The council discussed ideas on how the city should use money during a work session before the regular council meeting but did not come to a consensus on what kinds of programs to fund or if the city wanted to have staff manage the funds or contract with an outside nonprofit to manage the funds. The council asked Rains to schedule another work session to discuss the various programs and possible nonprofit partners further.
Some of the suggestions Rains listed for the funds during the work session included:
- A grant program for local businesses or nonprofits, a personal protective equipment reimbursement or purchase program for businesses.
- A shop local campaign.
- Reducing the cost of business license fees for new businesses or the renewal fee for existing businesses.
- Partnering with a nonprofit to provide utility bill assistance for residents.
- Funding to food banks.
- Funding for child care programs like the Boys & Girls Club.
- Funding for existing temporary housing programs like the one run by the Community Action Human Resources Agency.
- Partnering with Arizona@Work for job training and assistance.
- Purchasing internet access for local students who do not currently have access to the internet.
- Funding the restoration of the railroad underpass.
- Purchasing body cameras for city police officers.
Council members seemed to be particularly interested in grant programs for businesses, assistance for individuals, purchasing internet access for students and body cameras for police officers.
Rains also suggested holding half of the funds in reserve in case the pandemic gets worse or the hit to the local economy is worse than expected.
Rains warned that the city has to be careful not to run afoul of the state’s gift clause statute. The statute prohibits the state and local governments from donating, loaning or granting money to an individual or business without it benefiting the public good and without the government getting something in return.
The city handing out grants directly to businesses or individuals might be considered a violation of the gift clause. However, the city could partner with a nonprofit organization, such as United Way, and have that organization disburse the funds for the city.
Council members liked the idea of having a nonprofit entity disburse the funds instead of having city staff or a special committee deal with applications and cutting checks to local businesses and individuals for the funds.
Mayor Pro Tem Lisa Navarro Fitzgibbons said she preferred having a local nonprofit handle the funds over a larger outside group such as Local First Arizona. However, she worried that many local nonprofits were also swamped with trying to provide services to the community and wouldn’t have the manpower or expertise to handle such a large sum of money.
Councilman Matt Herman liked the idea of a grant program to help local businesses that are unable to get a federal Paycheck Protection Program loan. But he agreed that the city should look at the idea of finding a nonprofit partner to manage such a grant program.
Councilwoman Donna McBride agreed and suggested that the city look at the possibility of hiring another grant coordinator to manage the program.
“We need to manage it right because we might not get any more (funds) because we don’t know what will happen in the next three to four months,” she said.
McBride also said she wanted to be involved in and notified of all of the decisions on how the funds were spent and which organizations got the money so that she could answer any questions she got from the public.
McFarland suggested that the council hold another workshop session before its next regular meeting on July 20 in order to discuss possible options for the funds.
The council also approved its $200 million budget for the next fiscal year and a five-year plan for the $500,000 in federal Community Development Block Grants the city received.
The CDBG funds will be used for services for the homeless, senior services, services for victims of abuse, a westside sidewalk project, improvements to Rotary Park, housing rehab for low-income residents and covering the cost of a code enforcement officer for the city.