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Peoria May Put Federal COVID-19 Funds Toward Borrowing, Furloughs

210601 City Council mtg Urich.jpg
City of Peoria
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Peoria City Manager Patrick Urich discusses possible uses for $47 million in federal COVID-19 relief funding during a special City Council meeting Tuesday at the Peoria Riverfront Museum Auditorium.

Canceling $10 million in planned borrowing to balance the 2021 budget and ending furloughs for some city employees are among the possible uses the City of Peoria may consider for $47 million in federal COVID-19 relief funding.

The City Council explored options for the American Rescue Plan money during a policy session discussion Tuesday night at the Peoria Riverfront Museum Auditorium. City Manager Patrick Urich said the city already has received a first installment of $23.5 million.

“This may be the first time in in my 20 years in Peoria that I can remember where we have this kind of funding coming in from the federal government to be able to spend, and I think that this is a unique situation,” Urich told the council. “It means that we've got time to really deliberate and think about how best to spend those dollars, and maximize the impact of it.”

Urich advised the council on the federal regulations attached to the funding regarding how the money can be spent over the next four years. The city will be required to file quarterly accounting reports with the Treasury Department.

No action was taken during the policy session, but the discussion produced the initial two actions likely to come up for a vote at next week’s meeting. Several council members agreed with Urich’s recommendation to cancel the $10 million in borrowing approved as part of the 2021 budget that narrowly passed in November. The idea of ending furloughs for non-union city workers also garnered support.

However, Urich initially recommended stopping the furloughs beginning July 1 — costing about half of the projected $360,000 in savings over the course of the year. Several council members suggested modifying that plan to end the furloughs as of June 1, or even offering back pay retroactive to March 3.

“Some of these employees, their lifestyles have been affected negatively already,” said Fifth District Council member Denis Cyr. “What if we go back, would that be a qualified expense to reimburse them the time they've lost?”

Second District council member Chuck Grayeb said fully restoring basic public services that were cut during the budget process should be the council’s top priority. At-large council member John Kelly noted that although current revenue projections are better than initially expected, the city still has lost about $18 million in anticipated 2020 revenue during the COVID-19 pandemic.

Still, Mayor Rita Ali said the federal funding presents a “rare opportunity” that the city must seize upon.

“We'll never see this kind of federal money come through, you know, probably in our lifetime — and this is not it; there's more coming. This is a unique time, and it's during our time so we get to help make those decisions.,” said Ali, adding she likes the idea of getting public input on how to spend the money.

Urich said the city finance department believes directing some of the federal dollars to the growing public safety pension obligations would be considered an acceptable use under the federal guidelines.

“We contribute (to the pensions) on a regular and recurring basis, and make that payment to the pension funds when they're due,” said Urich. “It's an annual required contribution, and we make that payment. So under our reading of the statute, we feel that that means that that's an allowable expense.”

Urich noted the city must decide how to allocate all the funds by the end of 2024, and the money all must be spent by the end of 2026. He also cautioned against revolving or long-term spending.

“This funding is temporary; this is not permanent funding,” he said. “So we should really avoid creating new programs or add-ons that require an additional and ongoing financial commitment, because you're going to create a fiscal cliff if you operationalize all of this expense to the point of where this funding drops off and you now have to make that up with other revenues that we have from our city's coffers.”

Following the policy discussion, the council went into a closed executive session to discuss the top candidates to fill the at-large vacancy created by Ali's recent election as mayor.

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