Agenda - Council Work Session - 03/08/2022

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4386 Federal Register/Vol. 87, No. 18/Thursday, January 27, 2022/Rules and Regulations COVID-19 response be exempted from these employees,recipients may use • Step Four:Subtract the actual the calculation of number of employees. SLFRF funds for payroll and covered number of FTEs from the adjusted pre- Many commenters also requested an benefit costs that are obligated by pandemic baseline to calculate the expanded set of eligible uses beyond December 31, 2024 and expended by number of FTEs that can be hired and restoring their workforce up to the pre- December 31, 2026, consistent with the covered by SLFRF funds. pandemic baseline. Commenters Uniform Guidance's Cost Principles at 2 Recipients may use SLFRF funds to requested that funding be able to be CFR part 200 Subpart E. This option cover payroll and covered benefit costs used to avoid layoffs,provide back pay, provides administrative simplicity for obligated by December 31, 2024,and retain employees through pay increases recipients that would simply like to expended by December 31, 2026,up to and other retention programs, or restore pre-pandemic positions and the number of FTEs calculated in Step reimburse salaries and benefits already would not like to hire above the pre- Four,consistent with the Uniform paid. Some commenters also requested pandemic baseline. Guidance's Cost Principles at 2 CFR part clarification as to whether recipients To pursue the second option, 200 Subpart E.Recipients may only use can fund re-hired positions through the recipients should undergo the analysis SLFRF funds for additional FTEs hired period of performance and on the provided below.In short,this option over the March 3, 2021 level of definition of payroll and benefits. Other allows recipients to pay for payroll and budgeted FTEs (i.e.,the actual number commenters requested preferential covered benefits associated with the of FTEs);note again that recipients may hiring for workers laid off,a strong recipient increasing its number of choose whether to conduct the analysis commitment to equity,and a budgeted full-time equivalent of FTEs that can be covered by SLFRF requirement that funds would not be employees (FTEs)up to 7.5 percent funds on a government-wide basis or for used to pay for contract or temporary above its pre-pandemic employment an individual department,agency, or replacement workers during a labor baseline,which adjusts for the authority. dispute. continued underinvestment in state and These FTEs must have begun their Treasury Response:The final rule local governments since the Great employment on or after March 3, 2021, allows for an expanded set of eligible Recession. State and local government which is the beginning of the period of uses to restore and support public sector employment as a share of population in performance. For administrative employment.Eligible uses include 2019 remained considerably below its convenience,recipients do not need to hiring up to a pre-pandemic baseline share prior to the Great Recession in demonstrate that the reduction in that is adjusted for historic 2007,which presented major risks to number of FTEs was due to the COVID— underinvestment in the public sector, recipients mounting a response to the 19 pandemic,as Treasury assumes the providing additional funds for COVID-19 public health emergency. vast majority of employment reductions employees who experienced pay cuts or The adjustment factor of 7.5 percent during this time were due to pandemic were furloughed, avoiding layoffs, results from estimating how much larger fiscal pressures on state and local providing worker retention incentives, 2019 state and local government budgets. Recipients do not need to hire and paying for ancillary administrative employment would have needed to be for the same roles that existed pre- costs related to hiring. for the share of state and local pandemic. Restoring pre-pandemic employment. government employment to population For illustration, consider a In response to comments and in 2019 to have been back at its 2007 hypothetical recipient with 1,000 recognizing underinvestment in public budgeted FTEs on January 27, 2020 (950 sector employment,the final rule level and is intended to correct for this filled FTE positions and 50 unfilled FTE expands the ability to use SLFRF funds gap' positions). The recipient's pre- to restore pre-pandemic employment. Recipients should complete the steps pandemic baseline is 1000 FTEs;its Treasury is also clarifying how,and the described below.Recipients may choose hh d his anal adjusted pre-pandemic baseline is 1,000 extent to which,recipients may use weter to conduct this on a * 1.075 = 1075 FTEs. Now,assume that SLFRF funds to rehire public government-wide basis or for an on March 3, 2021,the recipient had 800 employees. individual department, agency, or budgeted FTEs in total (795 filled FTE The final rule provides two options to authority. positions and 5 unfilled FTE positions), restore pre-pandemic employment, • Step One:Identify the recipients with 50 FTEs primarily dedicated to depending on recipient's needs. Under budgeted FTE level on January 27, 2020. responding to the COVID-19 public the first and simpler option,recipients This includes all budgeted positions, health emergency. The recipient would may use SLFRF funds to rehire staff for filled and unfilled. This is called the have the option of using either 800 FTEs pre-pandemic positions that were pre-pandemic baseline. or 750 FTEs as its actual number of unfilled or were eliminated due the • Step Two:Multiply the pre- FTEs for the calculation; assuming it pandemic without undergoing further pandemic baseline by 1.075 (that is, 1 chooses the lower number,it would be analysis. Under the second option,the +adjustment factor). This is called the able to fund up to 325 FTEs with SLFRF final rule provides recipients an option adjusted pre-pandemic baseline. funds (that is, 1,075—750 = 325 FTEs). to hire above the pre-pandemic baseline • Step Three:Identify the recipients, bud eted FTE level on March 3, 2021, by adjusting the pre-pandemic baseline g consider public health and safety FTEs to be for historical growth in public sector which is the beginning of the period of entirely devoted to mitigating or responding to the employment over time,as well as performance for SLFRF funds. COVID-19 public health emergency if the FTE,or his or her operating unit of division,is primarily flexibility on roles for hire. Recipients Recipients may,but are not required to, dedicated to responding to the COVID-19 public may choose between these options but exclude FTEs dedicated to responding health emergency.Recipients may also consider cannot use both. to the COVID-19 public health other presumptions for assessing the extent to emer enc 244 This is called the actual which an FTE,division,or operating unit is To pursue the first option,recipients g y• engaged in activities that respond to the COVID-19 may use SLFRF funds to hire employees number of FTEs. public health emergency,provided that the for the same positions that existed on recipient reassesses periodically and maintains January 2 7 2020 but that were unfilled 244 Recipients may determine that a portion of an records to support its assessment,such as payroll ' FTE's time is dedicated to responding to the records,attestations from supervisors or staff,or or eliminated as of March 3, 2021, COVID-19 public health emergency.Further,for regular work product or correspondence without undergoing further analysis.For administrative convenience,the recipient may demonstrating work on the COVID-19 response.