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story.lead_photo.caption FILE — The state Capitol is shown in this file photo.

Arkansas' cities and counties would collectively be eligible for reimbursement for up to $150 million in federal funds for coronavirus-related expenses under a plan endorsed Wednesday by a steering committee appointed by Gov. Asa Hutchinson.

Cities would be eligible for up to $75 million of the funds, while counties would be eligible for the other half under the proposal.

"We have such a short time frame to turn this around, that we aspire to do ... this as quick a process as possible so that any money that is not used by cities and counties can quickly get turned back to the CARES Act steering committee for distribution elsewhere," said Chris Villines, executive director of the Association of Arkansas Counties.

The Coronavirus Aid, Relief, and Economic Security Act steering committee was authorized to recommend the best use of $1.25 billion in federal coronavirus relief funds.

[CORONAVIRUS: Click here for our complete coverage » arkansasonline.com/coronavirus]

"Our proposal is to have two separate phases and ... the cities have an allocation model that is based on population [and] the counties have an allocation model that is based partially on their general turnback formula that the state uses and partially on public safety compensation," he said.

The steering committee also recommended that Hutchinson sign off on a proposal to use $50 million of the federal coronavirus relief funds to finance a hospitality and service industry business interruption grant program.

Grants would be made available to entities negatively affected by state orders directly related to covid-19 mitigation. The grants would be administered through a working agreement between the Department of Parks, Heritage and Tourism; Department of Commerce; and the Department of Finance and Administration, said Stacy Hurst, secretary of parks, heritage and tourism.

Cities and counties would apply for reimbursement of expenses using a finance department application process by Oct. 30, Villines said.

"Any amount that they don't get, or any gap that is left between what they receive in Phase 1 and that allocation gap, they could go and apply for in Phase 2 in a much shorter 15-day time period that would end Nov. 16," he said.

Officials of the Association of Arkansas Counties and Arkansas Municipal League have been careful not to ask for more money than they think cities and counties should get, Villines said.

Mark Hayes, executive director of the Municipal League, said he feels strongly that reimbursements to cities and counties need to be evidence-based, so it's clear that they are being reimbursed for actual things that were purchased related to the pandemic

"We want to give [the steering committee] a list of things that seem common for use and that would be easy for y'all to say yes to and, if they made a proposal of $50,000 of less and it's in that category of approved items, then [officials] will review that, sign off on it and process the reimbursement so it doesn't bog the system down and have to come to y'all for any kind of verification," said Paul Louthian, a deputy director at the finance department.

"We think that most of the counties has jail costs that can be reimbursed very quickly, so we are going to try to do that with five, six, maybe seven different avenues of spending," he said.

The committee also set a list of preapproved items, such as masks, gloves and face shields.

Individual requests greater than $50,000 or including expenditures that are not on the preapproved list must be submitted to the full committee, finance department spokesman Scott Hardin said afterward.

Committee member Sen. Will Bond, D-Little Rock, said some people in Central Arkansas are worried about whether arenas and large event centers that are public entities or quasi-public entities, such as Simmons Arena in North Little Rock, would be eligible for federal coronavirus relief funds through their cities and counties.

"They are really taking it on the chin, our arenas and our large event centers," he said.

"We are of the opinion that based upon the guidance from the CARES Act itself and the Treasury Department that it is unlikely that lost revenue could be reimbursed," Hayes said.

"There is probably a way to talk about employment issues, any maintenance issues on the building that have gone because they had to wait so long and not do anything," he said. "It is not an easy question. We are going to dig hard to try to find some link back to the act because I have had phone calls from all over the state [and] community centers, convention centers, etc., have all essentially had to close their doors."

Villines said that under this plan, Little Rock and Pulaski County would be eligible for more than $14 million if they have proper expenses.

"We are going to work with them on the structure of Simmons Arena, how it is put together and how it is funded," he said.

The proposed $50 million hospitality and service industry business interruption grant program's applicants must be in Arkansas, still be in some form of operation, and have 250 or fewer employees, according to the Department of Parks, Heritage and Tourism's proposal.

Hurst said, "The travel and hospitality sectors are the hardest hit in the economy and predicted to be the slowest to recover.

"We are really struggling in this arena," she said. "In early June, the governor asked me to pull together a hospitality working group and gather data and make recommendations that could provide relief."

There is still a lot of work to be done on the proposed grant program relating to definitions, information that will be required of applicants and which applicants will qualify, she said.

"But we plan to do that in concert with the Legislature as we create rules for the program," Hurst said.

Bond suggested the proposed program establish a maximum grant amount "so that a few entities don't eat up the entire amount of money."

"My thought is we would gather all the information so it is almost a two-step process," Hurst said.

"We would have a quantitative screening of applicants, and then we would have a qualitative adjustment and allocation so that formula will be a prorated formula, but I don't know that we need to establish a cap," she said.

The steering committee endorsed the Department of Commerce's request for $8 million to fill a projected shortfall for state matching funds for supplemental federal unemployment benefits of $300 a week.

"This will extend the $300 additional benefit for those receiving unemployment insurance compensation," said Commerce Secretary Mike Preston, who serves on the steering committee.

Committee Chairwoman Elizabeth Smith said there was a question as to whether federal coronavirus relief funds can be used as matching state funds for the supplemental federal unemployment benefits.

"If there is a change, then the money will be brought back to the CARES Act steering committee," she said.

The steering committee also endorsed using $2.8 million to continue supporting the call center at the Division of Workforce Services through Dec. 31.

"We have seen the need continuing with this extended program," Preston said. "These are the folks who are on the front lines, answering these calls."

The steering committee also recommended the governor approve the Department of Human Services' request for $425,000 for direct services for child abuse victims.

Human Services Secretary Cindy Gillespie told the steering committee, of which she is a member, that "what we are asking is to be able to allocate up to $25,000 for each of the 17 child advocacy child centers for them to be able to get reimbursement for covid-related expenses."

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