Rockford City Council must decide how to spend $54.8M in pandemic-relief funds

ROCKFORD — City Council has until August to come up with plans on how to spend $54.8 million in federal pandemic recovery funding. 

Rockford Finance Director Carrie Hagerty said the priority for the American Rescue Plan Act funds is to stabilize city finances, prevent city employee layoffs and preserve city services that were strained by revenue losses during the pandemic. 

But Hagerty also said there is more flexibility built into the program than previous pandemic recovery funding programs. That allows communities like Rockford to spend the money in ways officials believe will best aid the local economic recovery.

"It's hard to find an organization that wasn’t affected in some way either by decreased revenues or by increased costs and there is going to be significant demand," Hagerty said.

Rockford has already received half the funding even as the federal government continues to hammer out the final broad rules for how it can be used. 

After covering expected city revenue losses, portions of the funding could be turned into grants.

The grants could assist the tourism, hospitality and travel industry. Money could benefit performance venues that were shuttered during the pandemic. Or maybe the money should go to help low-income households, those struggling to pay rent, to small businesses that were hard hit or to nonprofits that were affected.

Hagerty noted that there already are other programs providing pandemic-related financial assistance to renters, businesses, organizations and other programs.

"We don’t want to use our money to duplicate those efforts," Hagerty said. "So our guidance to City Council will be to use the funds in areas that have not otherwise been assisted by COVID-related funding and try to use that money to help those types of organizations." 

More:‘Life changing' COVID-19 relief bill to bring $54M to Rockford

Those are decisions Alderman Mark Bonne, D-14, said the City Council will have to wrestle with in coming weeks.

Bonne said he could see strong arguments being made to spread the money throughout the city, to focus it on a project that returns the biggest bang for the buck or to concentrate it on disadvantaged areas or businesses in the city.

Bonne said city administration may need to come up with a comprehensive method for evaluating all the available options.

"It's going to be a challenge," Bonne said. "It’s a good challenge to have and I think staff had indicated there were already requests coming in the door for assistance. The idea that we should use it first and foremost to shore up the city's own budget makes sense."

Designed to provide relief for people who suffered during the pandemic and kickstart an economic recovery as the nation emerges from the pandemic, the $1.9 trillion Rescue Plan approved by Congress in March includes direct payments to families, child tax credits and $130 billion in funding for local governments across the nation. 

There is $55 million allocated for Winnebago County.

Based on a federal formula that uses 2019 as a base year and assumes 4.1% annual growth in revenue, Rockford is projected through 2023 to collect $100 million in revenues less than it would have without the pandemic.

The federal funds are meant to close that gap while investing in the city's recovery, Hagerty said.

Alderman Frank Beach, R-10, suggested that some of the money could be used to assist local arts venues that were hit especially hard during the pandemic like the BMO Harris Bank Center.

Alderman Bill Rose, D-9, said that some of the money could be used to help residents and homeowners.

"We've done a lot to help small businesses, but we have done little for housing needs, in my opinion," Rose said.

Jeff Kolkey: jkolkey@rrstar.com; @jeffkolkey