By Chris Bowling
As soon as the money hit the county’s bank account, the emails and calls started coming in.
School districts, county departments, city leaders, everyone was anxious to get their piece of the CARES Act money Douglas County received to recoup pandemic-related losses and cover future COVID-19 expenses.
Suddenly finding himself the gatekeeper of $166 million, Douglas County Budget and Finance Director Joe Lorenz said it was like “you just became the most popular kid in school.”
“This is as busy as I’ve ever been in my life trying to administer this,” he said.
One by one, requests came in; losses were tallied up. Many of those requests have pile up in a manila folder in Lorenz’s office that’s grown six inches thick. But while the call for help was great, some say the county’s response has lagged.
“There was no plan, and this is a problem that Douglas County has systemically,” County Commissioner Jim Cavanaugh said. “They don’t make strategic plans. So there was no plan for how to do this, how to distribute the $166 million. They waited and waited.”
As the pandemic struck in Douglas County, hospitals raced to prepare while community members cancelled events, shuttered businesses and watched unemployment climb to unfathomable heights. At the end of March, relief was in sight as the federal government passed the CARES Act, which, in part, provided $150 billion for local and state governments to recoup losses, fund COVID-19-related projects and pay for masks and hand sanitizer.
Douglas County received its $166 million share on April 24. But months later, much of that money still sits in an account at First National Bank of Omaha.
The question is, why?
As the months have gone by, the structure of Douglas County government has been tested on multiple levels as commissioners and staff navigate how to spend the money, understand federal spending guidelines and follow a singular vision.
At the epicenter of this logjam sits the seven-member Douglas County Board of Commissioners.
“We’re way, way behind in terms of where I want to be,” Cavanaugh said. “I am not patient with bureaucratic excuses for why we can’t get money to people whose rent is three months in arrears.”
One clear example of bureaucratic bog-down is the county’s rental assistance program. While the board allocated funds for this project in June, Tuesday County Board meetings thereafter were marked not by decisive action, but by long discussions and pointed comments by some commissioners about lack of progress.
One week, commissioners received a nearly blank page for an update about the rental assistance program prior to their meeting.
The rental assistance program began taking applications July 27 — four days before the federal moratorium on evictions ended and nearly two months after the state’s hold ended.
In Courtroom 20, just below the commissioners’ Farnam Street offices, evictions have resumed in full force. In June, 342 people were evicted from their homes in Douglas County, according to data from Legal Aid of Nebraska. Those 11 people per day is about a 20% increase from the average throughout 2019.
Many speaking before the judge say they’re still out of work due to the pandemic, have had trouble receiving unemployment benefits or never received a stimulus check. CARES money could help people pay missed rent back to April, but can’t help those who’ve already lost homes.
Some commissioners say while it’s unfortunate it’s taken months to decide where to allocate funds, this is the process working efficiently. They need to give their staff time to come up with proposals that can be discussed and reworked to ultimately get help to the people who need it.
“The biggest thing at the end of the day is that it is the county who is responsible for making sure those dollars were spent appropriately,” Commissioner Mary Ann Borgeson said. “Because if we get audited, and we’ll most probably get audited just like everyone else, we need to make sure we have dotted every ‘i’ and crossed every ‘t.’”
Part of the issue lies in the structure of county government.
Without a single executive power, the Douglas County Board of Commissioners needs a majority from its seven members to get things done. Lately the disagreements have seemed more fundamental and lead to mixed signals sent to county government administrators tasked with carrying out the commissioners’ choices.
“Whose plan do you follow?” Lorenz asked. “We kinda get all these people telling us to do this and do that … there’s not a consensus among our board on how to do this. So what you see is a disorganized [process], but that’s just [what happens with] seven members.”
Commissioners quickly agreed to spend the first $31.6 million updating infrastructure at the Douglas County Health Center and Department of Corrections, buying PPE and funding six COVID-19-related projects at the Douglas County Health Department.
The board also agreed to allocate $14 million for housing and utility assistance, and commissioners have talked about diverting similar funds to those facing food insecurity.
These proposals are put together by county staff and administrators, such as Lorenz and Chief Administrative Officer Patrick Bloomingdale.
“Staff is the one leading the charge and bringing [requests] to us when departments and offices are ready,” Borgeson said. “And we’re taking those up, reviewing them and approving them or not approving them.”
But often those plans seem based on mixed signals — with some commissioners applauding staff’s work while others say it misses the mark. At times it seems like a guessing game of trying to figure exactly what commissioners want.
Trying to execute this process is more challenging than any grant, proposal or anything else Bloomingdale has done in his nearly three decades with the county.
“It’s like on steroids,” Bloomingdale said.
The number of Douglas County employees working through requests also only amounts to a handful, Bloomingdale said, most of whom are balancing CARES work with existing job responsibilities.
Lorenz said as they began considering this process, administrators proposed putting together a committee to review requests outside of the commissioners’ weekly public meetings. But a majority of commissioners said they wanted everything in the open so no one could accuse them of making backroom deals.
“We need to do everything publicly,” Commissioner P.J. Morgan said. “Because we’re a public body, and we don’t want to have people saying, when you’re looking at what the city’s requesting, ‘Why did you meet privately?’”
But because board members can’t make decisions on specific policy until Lorenz, Bloomingdale or other administrators present proposals at weekly meetings, it means a lot of work and debate needs to happen in real time.
That often means the decision-making process gets lodged between the lurch of bureaucratic protocol and the pressure to do something immediately. A tension only fueled by the amount of money on the table and the anxiety of impending audits.
“What Patrick and I always say is this [CARES Act money] is a blessing and a curse,” Lorenz said. “Some days it’s more of a blessing, and other days it’s much more of a curse.”
Unclear Federal Guidelines
Originally, the only federal stipulations on CARES money were that expenses had to be related to COVID-19 and the county had to send back whatever it didn’t spend. But things began to change, Lorenz said.
“Now there’s reporting requirements, and this is much more like a grant process with a lot of compliance issues and a lot of recordkeeping,” he said. “And that takes time and resources.”
There were obvious examples of good ways to spend CARES Act money — buying PPE, increasing testing capacities and upgrading air systems at the Douglas County Health Center. Others, such as whether to send money to public schools or how much of Omaha’s police and fire budget the county could cover, were trickier.
Bloomingdale said following those standards on even a small grant can be challenging. Multiply that to the scale of these relief funds and it becomes mind-boggling.
“I’ve been with the county for 27 years,” he said. “This is the biggest project that I’ve ever been involved (with) in terms of money.”
As Nebraska’s state government received its CARES Act money, it requested companies submit applications to help administer the funds. Douglas County decided to follow their lead and hire whomever won the state’s bid, citing a need for consistency from the state to local level.
The state hired Deloitte, a multinational professional services company headquartered in London with offices around the United States, including Omaha. On June 16, the board voted 6-1 to hire the same company to provide compliance guidance and ultimately help the county decide how to spend its money.
From the beginning, some commissioners balked at the idea of hiring an outside firm to guide any decision-making.
“The Douglas County bureaucracy is behind the curve in getting this money to people in need,” Cavanaugh said.“And the fact we signed a contract, over my objection, to Deloitte is even more frustrating because here’s an out-of-state corporation that’s getting paid right now with CARES dollars.”
It’s been estimated that Douglas County could end up paying the company as much as $300,000. The state’s contract goes up to $5 million.
Commissioner Mike Boyle frequently asked how much it would cost to pay Deloitte compared to hiring out-of-work Douglas County residents or a local county firm. Bloomingdale said it would be about $83,000 cheaper to keep it local in Douglas County, but it would have meant lost time in applications, interviews, hirings and training before the program could start.
The representative from Deloitte assisting Douglas County is based at an office in Texas and declined to comment on this story.
The question of cost becomes even more important as many commissioners feel the county was shortchanged by the state. Though Douglas County represents about 30% of the state’s population, it only received 13% of the $1.25 billion Nebraska received from the CARES Act.
“We’re still going to be short over $226 million out of the CARES allocation to the state of Nebraska,” Cavanaugh said.
But the county isn’t the only one feeling it didn’t get its fair share.
Omaha barely missed the 500,000 population mark to qualify for its own CARES Act funds. Mayor Jean Stothert has said the city will plan to access FEMA funds as it waits for CARES Act dollars. It’s also unclear how much CARES Act money will cover for the city. The county allocated $25 million to Omaha with the state agreeing to match. But losses to the city’s general fund and future expenses could be far greater.
Aside from navigating the relationship between the city and county in the process, federal stipulations also continue to change. Several updates and frequently-asked-questions pages have been posted online since the CARES money was administered, ruling out early requests like Boyle’s idea to fund the construction of a mental health facility. Other guidance has been clear from the start, such as not providing funding to undocumented people, which has proved controversial in the county’s rental assistance program.
That’s been unpopular with some on the board, but Bloomingdale said their hands are tied. Those are the kinds of compliance rules county staff need to show they’re following in reports submitted to the federal government, the first of which Bloomingdale said was submitted on July 17.
Lorenz said while the hiring of Deloitte has been controversial to some, Douglas County needs the firm to understand these complicated relationships and shifting regulations. If the county takes a misstep, that could mean big financial repercussions in an audit.
However, just hiring Deloitte does not relieve responsibility. If the contractor makes a mistake, Douglas County would still pay for it.
“We’re on the hook for it,” Lorenz said. “So the attitude is let’s do our due diligence up front, make sure we’re doing this correctly, so when they come back and audit us, we didn’t get a notice that ‘Oh, you owe us $5 million.”
While most commissioners say there’s no other option beside Deloitte, the issue led to some heated exchanges during board meetings.
“The floor is Commissioner Borgeson’s,” said an exasperated County Board President Clare Duda as he buried his head between his folded arms while Cavanaugh talked over him during a meeting on June 16.
“This contract is a very good idea. This contract is very, very good,” Borgeson said, speaking over a now un-mic’d Cavanaugh. “The behavior of this board definitely shows why.”
Still the Middle of Battle
Unlike a city with its mayor and city council, everyone in county government is beholden to the board. In Douglas County, there’s a lot of experience on that body.
Two former mayors, a former Omaha City Council member and a collective 116 years of county board experience.
Though the debates are sometimes charged, they can lead to more frank discussion and democratized decisions. It can also lead to more infighting. But despite their clash in personalities, the mission to serve the people of Douglas County is uniform. And while this process is messy, it’s at its core a public, transparent display of how government works.
“I certainly can’t say this process has worked great,” Lorenz said. “We’re less than halfway into it … Ask me in December and maybe I’ll know. But right now I’m still in the middle of battle, so I can’t reflect on what we would have done differently.”