The State taking back $ 500,000 in COVID risk premium “bonuses” granted to employees of the city of Methuen; $ 150,000 in restaurant relief | Merrimack Valley
METHUEN – The state executive office for administration and finance is recovering $ 650,000 from the city which was donated using the CARES law funding for restaurants and the COVID-19 risk premium for some employees.
After receiving $ 4 million in federal COVID-19 assistance funds, Mayor Neil Perry was given a deadline of December 31, 2020 to allocate it. Now, of the expenses he made, the city must return $ 150,000 that went to restaurants and $ 500,000 in COVID-19 risk bonuses paid to essential employees shortly before last year’s vacation.
Administration and finance officials told Perry on Friday afternoon his appeal for $ 68,000 in rent assistance for Methuen residents facing pandemic-related hardship had been successful. Originally, the city was told it had to return this money on the grounds that it was not an acceptable use of COVID-19 funds.
Risk allowances must be returned as they constitute “ineligible bonuses” for workers who have not faced “physical hardship” related to their jobs, according to the state.
Restaurant money, given to owners to reimburse licensing fees, is owed because it was not considered an eligible expense.
Public documents obtained by the state’s Eagle-Tribune show that risk bonuses were paid to 346 city employees – with titles ranging from director of human resources to junior accountant, director of public works, police and firefighters.
The mayor said the allowances went to employees working in person at city hall or on site at their workplace for prorated amounts of up to $ 1,500, depending on the time they have. worked during the pandemic.
Teachers did not receive the one-time payment because they had received a 1.5% raise, Perry said. In addition, he said, no one in the mayor’s office won an allowance, nor any worker with an individual employment contract. Elected officials were also not eligible for payments.
Before the money was distributed, Methuen’s chief financial officer, Maggie Duprey, confirmed that the risk premium was allowed, according to Perry.
“We were very careful about what we were spending and asked for approval before we did it,” he said.
On November 5, 2020, Duprey submitted a question via an online web form asking if the city could pay a risk premium to essential employees with CARES funding.
The next day, Brendan Sweeney, Deputy Director of Federal Municipal Funds, replied, “Yes, that was an eligible expense.”
However, the administration and finance office subsequently overturned its decision and said the money must now be returned.
According to a letter from Sweeney to Duprey dated January 14, 2021, public employees who continue to perform their duties despite the challenges presented by COVID-19 are not “in themselves” sufficient justification to justify a risk premium.
“The risk premium is an eligible (use) … if it is provided for the performance of hazardous tasks or work involving physical hardship which in each case is related to COVID-19,” Sweeney’s letter states.
But, the state determined, payroll documents provided to police and fire departments and the Department of Public Works staff did not include enough detail that the work was related to COVID-19. On the contrary, according to a letter from Sweeney, there was “an order to give police time to ‘rest’ and spend time with families before an increase in COVID cases.”
“This is not an eligible risk premium application,” the state said, calling them “ineligible premiums for these employees.”
The mayor said he was opposed to the term “bonuses” and instead referred to the allowances as “risk pay”.
“The hindsight is 20/20. If it had to be done again, I wouldn’t do it, ”Perry said. “People on social media say the vast majority of people (who won the allowance) stayed at home, and that’s just not true. Not the police, fire or public works departments, which represent 80% of my workforce.
These employees couldn’t work remotely, he said, because that’s just not possible.
“If the state came back and said ‘You have to pay it back for the people who work at the town hall,’ I would be hard pressed to fight that,” he said.
“I wouldn’t have given it if the state had said no. The state says, “You should have known there were conditions,” Perry said. “My comment is: ‘You should have told me the conditions’. There is a narrative that the state said no and we did it anyway. This is not true. I don’t have much nerve. Without being sour grapes, it’s tough when you’re arguing with the judge and jury.
City council did not vote to issue risk premiums, business assistance payments or rent, despite the city code requiring a vote on any payment over $ 50,000.
According to Perry, city officials did not seek approval before issuing rent payments or restaurant aid money. He said, however, that the rent assistance money went directly to landlords or utility companies. Regarding the restaurant assistance program, Perry said the city had “copied” what another community was doing.
Councilor DJ Beauregard spoke with Deputy City Manager for Lowell, where officials waived licensing fees for bars and restaurants.
“They did not use or appropriate any funding to cover these costs; instead, they took it as a loss, ”Beauregard said.
The mayor appealed against the state’s decision regarding the risk premium and restaurant allowances. After several requests for a face-to-face meeting to discuss the situation, he finally has one scheduled for Tuesday.
“If we had had in-person meetings, the rental assistance program would have been approved sooner,” said Perry.
He also sent letters to Senator Diana DiZoglio, D-Methuen and Governor Charlie Baker to express his displeasure.
“How can the Commonwealth continue to say it is pro small business (when this is happening)? Perry asked, highlighting the problems Methuen had as a border community when neighboring New Hampshire was open during the pandemic.
Brendan Moss, the media representative for administration and finance, said the state “is responsible for ensuring that all expenses charged against this grant comply with all applicable federal rules and regulations (and) A&F continues to work throughout the review and remediation process with the city. of Methuen and other towns.
Perry has pledged to keep the city’s available cash reserve of $ 12.9 million intact to complete the fiscal year, so where the clawback money will come from is in question.
Council Chairman Steve Saba said it would be taken from what is known as the ‘Cherry Leaf’, a document that identifies all of the funding Methuen receives from the state to cover the expenses of the coming year.
“We’re going to have to find the money to catch up with him,” he said.
Beauregard also asked lawyer Kenneth Rossetti if the board can require the administration to submit all proposed COVID-19 relief expenses to its members for approval as a corrective action.
“The aim would be to come up with a measure at an emergency meeting if he thinks we can do it,” Beauregard said. “We need to look at the legal potential for tighter oversight of these federal funds.”
Saba said he blamed Perry and Duprey for the situation as well.
“When you’re the CAFO of a town like Methuen, you don’t go to a question-and-answer site to get an automated response,” Saba said. “You have a person on the phone. You check it a third time before you do something like this.
Councilor Jessica Finocchiaro said she initially believed this could have been attributed to a “reasonable error,” but now fears the city’s available cash reserves are in jeopardy.
“I am frustrated that taxpayers are picking up the tab, and our free money that we have worked to build since 2018 is being targeted due to mismanagement and lack of compliance,” Finocchiaro said.