Priority Number One

FEMA's Public Assistance program, the agency's largest grant program, is a new process for many of Best Best & Krieger LLP's clients, but it's one that could open up vital funding opportunities to replace money spent by cities responding amid the pandemic to their constituents' needs.

"I think a lot of our clients are used to the state and local requirements in their purchasing policy, so we've really helped them navigate FEMA and their certain requirements," said Craig P. Hayes, an associate in the firm's municipal law practice.

For example, Hayes said they've helped clients update their purchasing policies and craft contracts that comply with FEMA rules. Michael J. Maurer, a partner practicing municipal law, added they try to position their clients as best they can to recoup money while they make important decisions to maintain the health of the community.

"What we're trying to do in a lot of ways is let our clients just make those truly important front-line decisions, and then [we'll] be there to put them in place to be able to recover some of those costs that they just have to pay," Maurer said.

To receive that reimbursement, Hayes said it's most important to document decisions as they happen because it's a lot easier than trying to remember what cities spent and why later down the line.

"When there's ever an audit of different expenses, you want to make sure that everything from why [you chose] the procurement method to the contractor or vendor you selected to the contract you entered into... is documented," Hayes said.

Michael J. Maurer

The incurred costs of the coronavirus pandemic are different from those of a fire or earthquake, Hayes said. He and Maurer explained cities are spending money on things like bottled water or renting hotel rooms to quarantine employees. Hayes said cities are primarily focused on getting important work done, but he emphasized the need to document through that process.

"If you are going to rent that hotel ... to put people up, the first number one priority is actually getting them there, so sometimes the documentation can take a backseat," Hayes said. "I think we just stress that, 'Hey, it does take some time, but it's not difficult. In all these situations -- document, document, document.'"

There's a lot of information coming from the federal government, and it's been important for attorneys to communicate with clients. The firm's Director of Governmental Affairs Ana D. Schwab said their most important job is making sure the information coming from multiple sources is given to clients quickly and clearly, so they know how they could be affected. She said it's also the firm's job in this time to act as an advocate for their clients while federal authorities craft aid packages.

"When we see different issues arising in the pieces of legislation or during the negotiations that are taking place between Congress and the administration, we have proactively advocated on behalf of the clients of Best Best & Krieger to ensure that we are positioning them in the best way possible," Schwab said.

Ana D. Schwab

One example of that advocacy involved the Families First Coronavirus Response Act, Schwab said. A component of the federal act created a tax credit for private employers, but Schwab said the firm sent a letter to advocate for the tax credit to be extended to public employers as well.

An important part of understanding the money these cities are receiving from the government is knowing how to address immediate needs through FEMA and then looking at long-term fiscal recovery funding through other means, according to partner Lowry A. Crook.

"The current authorities and public assistance programs are mostly targeted at covering additional expenses resulting from the emergency," Crook said. "What we haven't seen is anything to address the local governments' either deferral or loss of revenues as a result of the emergency. That's one thing that the House members have been prioritizing for the next round of assistance."

Schwab said it can be hard to predict budgets because cities rely on income like transient occupancy taxes from hotel guests. She said without being able to predict travelers and tourism, it will be difficult to fill a big hole in cities' annual budgets. There are a lot of unknowns in the situation, Maurer said, noting there isn't a blueprint for this kind of crisis.

"We're in a situation where the entire nation is in a state of emergency at once, which I don't believe is something we've ever had, at least in the last 60 years," Maurer said. "As far as the amount of money, the amount of claims, [and] the type of claims that FEMA is getting, it's completely unprecedented. It's not just unprecedented for a client. It's unprecedented for FEMA, too."

When everything reopens, there will be questions about funding. Maurer said income such as a transient occupancy and sales tax revenues are vital to get a city's budget moving again, but it can be hard to predict when and how much of that money will start flowing back into the city's coffers. Like everyone, cities are thinking about how to reopen the economy, but Maurer said for cities, public safety will always take precedence.

"Priority number one is always going to be public health," Maurer said. "Being able to reopen in a way that's consistent with public health -- I think that's what cities are focused on the most."