After $6.7M in pandemic bonuses to employees, Modesto considers payments to its retirees
The Modesto City Council will discuss Tuesday whether to pay bonuses to now-retired employees who were working for the city during the COVID-19 pandemic.
Council members voted 7-0 on March 7 to pay bonuses — also known as premium pay — of as much as $7,500 to employees who worked through the pandemic.
The bonuses cost the city $6.7 million from the $45.9 million it received in total in 2021 and 2022 from the American Rescue Plan Act, the $1.9 trillion federal effort to help families, businesses, cities, counties, schools and others weather the pandemic.
Human Resources Director Christina Alger has said the bonuses were for all employees who worked during the pandemic, were full time and still worked for the city. She confirmed that included City Manager Joe Lopez and other top city officials who met those guidelines.
City spokeswoman Diana Ruiz-Del Re confirmed Monday that the premium payments went out March 31.
When asked whether Lopez received a $7,500 payment, Ruiz-Del Re said in an email: “All current employees received the hazard (premium) pay for working through the pandemic.”
Lopez was appointed city manager in July 2018 and worked through the pandemic.
Several retirees and one former employee who worked for Modesto during the pandemic objected at the March 7 council meeting to being excluded from the bonuses. The council decided then to discuss at a future meeting paying bonuses to retirees but not to former employees.
The U.S. Treasury Department allows cities to provide this pay to its employees, but its guidelines state the pay should be prioritized for “low- and moderate-income persons” and those who “by virtue of their employment, were forced to take on additional burdens and make great personal sacrifices as a result of the COVID–19 pandemic.”
Modesto’s premium payments were in addition to the other economic impact payments the federal government sent to individuals and families, a Treasury Department spokeswoman confirmed with The Bee.
For instance, the American Rescue Plan Act provided payments in 2021 of as much as $1,400 to individuals and as much as $2,800 for married couples filing joint tax returns.
Taxpayers received the full amounts if they had an adjusted gross income of no more than $75,000 as an individual or $150,0000 as married couple filing a joint return. Payments were reduced for adjusted gross incomes above those amounts.
The federal government also authorized two payments in 2020 to individuals. The first was for as much as $1,200 and the second for as much as $600 based on the same income guidelines.
Modesto broke the $7,500 into three payments. Employees received $3,000 for working April 2020 through March 2021, an additional $3,000 for working April 2021 through March 2022, and $1,500 for working April 2022 through September 2022.
Some 851 employees would receive $7,500, 33 would receive $4,500 and 116 would receive $1,500, based on The Bee’s calculation of information on a city report from the March 7 council meeting.
Alger, the human resources director, told council members at the meeting that based on the same premium pay guidelines, about 89 retirees would qualify for the pay, at about a cost of about $522,000 to the city.
The premium pay comes from the $8.1 million Modesto set aside in July 2022 from its $45.9 million American Rescue Plan Act funding.
The city has spent or committed the rest of its ARPA funding on such efforts as homelessness, reducing blight, economic development and the city’s own needs, such as setting aside $2 million for deferred maintenance at Fire Station No. 1.
The council meets at 5:30 p.m. in the basement chambers of Tenth Street Place, 1010 10th St. The meeting also will be on Zoom. The meeting ID is 869 4597 0570 and the passcode is 84326.
