While the Colusa City Council ponders a way to spend $1.4 million in American Relief Plan funds over the next few months, the first $110,000 from the windfall from federal taxpayers went to city employees, just before Christmas, as a reward for working hard during the pandemic.
The City Council approved $3,000 bonuses for each employee and the city clerk at their Dec. 7 meeting. The amount was the second highest of four proposals brought to them by Finance Director Ishrat Aziz-Khan and City Manager Jesse Cain.
Only employees that were working as of March 2020 received the additional pay, officials said.
“It is an eligible expense,” Cain said.
The Department of the Treasury designated four allowed uses for the ARPA funds to cities, counties, and eligible governments: investments in infrastructure; propping up government services impacted by tax shortfalls; assistance to households, small businesses, nonprofits, and industustries impacted by the pandemic; and premium pay for workers deemed by the state as “essential” during the COVID-19 emergency.
“It can be used for storm drains but $1.4 million is not going to go far in storm drains,” Cain said. “The thought and idea is figuring out what the best use of this money is and to spend it wisely so it’s invested in our future. We are really investigating whether to invest in a phone system, but that’s as far as it’s gotten.”
While officials said overcoming a tax shortfall would have been the easier option for spending the money, Colusa really has no need to be “propped up” because local businesses and retail establishments, most of which were deemed essential and were booming during travel restrictions, actually fared better during the pandemic than normal.
“Colusa didn’t see a loss in tax revenue,” Cain said. “Last year (2019-2020), we actually saw a 12 percent increase, and it looks like we will see a 14 percent increase this year.”
Cain said department heads came up with four proposals for employee bonuses, ranging from $2,000 to $3,500, based on what other cities were awarding. Some states, including Washington, prohibit the use of ARPA funds for employee bonuses because any retroactive pay to government workers violates their state constitutions. California has no such restriction.
Option 4, or $3,500 per employee, would have cost $128,000, but city staff suggested only amounts that would be “palatable” to the City Council and their constituents.
“This could be a little controversial for some, but to me, a lot of people got rewarded,” said Councilman Daniel Vaca. “Some people truly lost their jobs but a lot of people got rewarded not to work. Those that did work didn’t get anything extra. I worked through the whole thing; never given the option not to work. Personally, I like the idea. It still leaves us plenty of money, but still rewards our hard working employees.”
At a time when the city is contemplating cutting services, Khan said the retroactive premium pay not only rewards employees for working during the pandemic but helps build morale.
The city received $724,839 in July, which was 50 percent of its total allocation, and must expend the entire $1.4 million by Dec. 31, 2026 or return it to the state.
Officials said after the City Council has time to digest options for the remaining ARPA funds, they may consider additional pay for employees with any remaining amounts. ■