$8 million in hotel bills? $37k spent on air filters? Exploring the hidden costs of COVID-19 in Wake County

Digital Investigations

RALEIGH, N.C. (WNCN) — From personal protective equipment to thermometers, some COVID-19-related costs faced by Wake County were obvious.

But others, including $8 million for hotels or $400,000 to a Saab factory, were less so.

Consider them the hidden costs of COVID.

Through an open records request, CBS17.com obtained a breakdown of how the county spent the federal money it received via the CARES Act.

Emily Lucas, the county’s chief financial officer, says the county so far has spent about $130 million with more than a third — roughly $47 million — going to public health.

Another 22 percent — about $28 million — went to support the Wake County Public School System with another $20 million going to nine cities and towns in the county.

Roughly $17 million was allocated for personnel costs, Lucas said.

“That’s been a huge effort on our part to get the right people in here because … for as much as we don’t need people interacting face to face, it really is a people-driven response and we couldn’t do it without the right people on board,” Lucas said.

But on the surface, the reasons for some of those expenses wasn’t clear.

For example, three entries on the massive spending record list only “hotel,” totaling just over $8 million.

Lucas said that was part of the county’s plan to provide shelter to homeless or displaced families while people were under orders to stay home. While the county’s typical response plan for other disasters is frequently to open a high school gymnasium or another type of shelter, that would have been impractical and counterproductive during a pandemic.

“So we couldn’t do any of those things, but we have an obligation to ensure people are safe and healthy,” Lucas said. “And so it became, ‘What are alternate strategies outside of congregate sheltering?’ So we thought of the idea of hotels.”

Lucas said hotels — whose occupancy she said had dipped to 20 percent — took in people and families who might have had other health risk factors.

“That was a different way to handle a situation that was unique to this pandemic,” Lucas said.

The county spent nearly $2 million at Quality Staffing Specialists, a Cary firm that helped provide nurses.

“We didn’t know at the time we would need so many nurses in this type of response,” Lucas said.

The county also had big contracts with some laboratories, spending nearly $2 million with Burlington-based LabCorp and $1.5 million with Mako Medical Laboratories.

Nearly $37,000 went to Capital Air Filters Inc., a Raleigh-based supplier.

And another $600,000 went to Saab Barracuda in Lillington. That factory usually produces camouflage nets and other military-grade equipment but now makes gowns and other PPE.

“People have heard so much about PPE over the past nine months, so PPE in and of itself isn’t a surprise,” Lucas said. “But the different types of PPE equipment that we have needed over time has changed.”

The pandemic forced the county to change its approach to dollars and cents, especially from its two largest revenue sources: sales taxes and property taxes.

Lucas said the county’s projections for sales tax revenue resembled Nike’s trademark swoosh: “sudden decreases … with a gradual return on those revenues.”

Most property tax collection was complete by the time the pandemic started last March, but when the county looked ahead to 2022 it had to consider its options for people who might be late with future payments because of COVID-related job losses.

“So do we need to enforce collection as strongly or do we need to think about their health, safety and welfare?” Lucas asked.

And vehicle tax revenues dipped when North Carolina Department of Motor Vehicles offices were “effectively shut down,” she said.

Lucas said the county’s departments each cut 1.5 percent of their budgets, and about two-thirds of the way through the budgeting process for fiscal year 2021, “we went from asking our departments to look at and consider expansions, to taking cuts of up to 7 percent, which they were able to bring us recommendations.”

That included eliminating vacant positions and continuing travel restrictions, Lucas said. And the county picked up some operational savings when some facilities, including libraries, were temporarily closed.

“We were able to look throughout our operating budgets for fiscal year 2022 (and) predicted revenue downturns,” Lucas said.

CBS 17 obtained the data for the report through an open records request. Click here to view the data obtained from the county.

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