Small towns in Delaware to receive combined $85 million in federal COVID relief
Small towns in Delaware will receive their own pools of federal money from the latest round of COVID relief.
The state announced Monday a total of more than $85 million will go to 55 small municipalities in Delaware under the American Rescue Plan that passed Congress earlier this month.
State Treasurer Colleen Davis says the money will be distributed through her office in two equal installments—one in the coming weeks or months, and another about a year later.
Davis says she expects the process to be more efficient than last year’s distribution of federal relief. Only New Castle County received CARES Act funding directly from the federal government in 2020, and other local entities received allocations through the state Office of Management and Budget.
“I’ve heard from one or two towns who said that they’re still waiting for some of their funds to come from the CARES Act money, and this was partially why we wanted to streamline this process and make it a bit more flexible,” Davis said.
Davis says she advocated for small towns to receive money directly from the federal government.
“One of the things that you worry about when you see a drop in your revenue is, are you going to have enough cash to pay all of your bills,” she said. “At the same time that we saw the revenues drop, we also saw demand for services increase. ”
A total of 19 smaller First State towns are projected to receive over a million dollars. Newark tops the list with just over $17 million. Middletown can expect just over $11.5 million. Smyrna and Milford are slated to receive about $6 million, while Seaford and Georgetown can expect around $4 million.
Davis says her office has learned from the U.S. Treasury that the allocations are based on census data, but is not aware of the exact formula.
“It's sort of based upon full-time residency,” Davis said. “So one of the things that we see is that the coastal towns will receive a little bit less than average, just because they tend not to have full-time residency in the same way that we see other sort of western Delaware towns.”
Davis says her office is still seeking clarification from the U.S. Treasury about how the funds can be used.
“The general rule is that the funds cannot be used to create tax credits or anything like that,” Davis said. “They're essentially meant to be used to shore up revenue shortfalls.”
Davis says the main stipulation is that the allocation cannot exceed 75% of a municipality’s annual budget.
“[If] I'm the town of Newark and we had a significant drop in our parking meter revenues, which I expect they probably did, you don't have to necessarily say, we had X amount of revenue shortfall due to XYZ,” Davis said. “It's more, here's our budget, … we're within the threshold, and we're looking to spend these funds on revenue shortfalls as well as maybe additional costs that we faced in the midst of the pandemic.”
The State Treasurer’s Office is currently working with small towns to get the budget documentation needed to be able to distribute the money.
Wilmington, Dover, and the state’s three counties will receive their American Rescue Plan funds directly from the U.S. Treasury.
New Castle County is slated to receive more than $108 million, Sussex County more than $45 million and Kent County just over $35 million, according to the State Treasurer’s Office. Wilmington and Dover, which are considered metropolitan municipalities, will likely receive more than $55 million and just under $7 million respectively.