WATERVILLE — The City Council plans to hold a public hearing so people can share their ideas for how to spend $1.6 million in federal pandemic relief funding.

City councilors mulled the possibilities during an initial discussion at their meeting Tuesday night, and ultimately decided to schedule a public hearing for Sept. 7, at 6 p.m., after which they’d likely create a subcommittee to examine the issue more closely.

Among the possibilities councilors talked about were giving out $1,000 bonuses to city staff and first-responders who all have been working during the pandemic, but other ideas emerged as well such as support for businesses, the homeless and others.

“The purpose of these funds is really to address the negative economic impacts on communities,” said Ward 4 Councilor Rebecca Green. “This seems like a really good opportunity for us to address the folks who are most vulnerable through this pandemic and need extra assistance to recover.”

Maine municipalities and counties are receiving about $502 million in American Rescue Plan Act funding. Green pushed for councilors to seek public input on how the money should be spent, noting that other communities are conducting surveys or public hearings.

City Manager Steve Daly said the funding was once considered by staff to possibly go into an unassigned fund balance linked to the municipal budget; however, that option is not allowed by federal legislation. Even so, the language used in the act is broad, enabling communities to use wide discretion in determining what their needs are and how best to target the funding to address the economic impacts of the pandemic.

“The uses the money can be put to are intended to be outreach to parties in the community affected economically during the pandemic period,” Daly said. “We know, for example, we lost a number of businesses that shut down and left town during the pandemic. Others toughed it out through that period.”

But, Daly cautioned, the way in which the city decides to get money out into the community is a complex issue.

Councilors agreed the city would need to devise a framework for deciding how to distribute the money. Green, asked by Ward 5 Councilor Rick Foss to provide examples of affected people, suggested the city could consider those who lost their homes during the pandemic, or who became sick and lost their jobs. That could lead to offering things such as housing vouchers or other support for education and job creation, she noted.

“The idea here is to address lost income caused by the public health emergency and address the negative impacts on communities,” Green said. “But I think we need to hear from people what those needs are.”

Emergency responders and school teachers were among the top frontline workers who risked their lives and should be considered as well, said Ward 6 councilor Claude Francke. But there are many possible uses and $1.6 million can be used up quickly, so “we have to be careful about what we do” with the funding, he said.

Business rents and rent mitigation are also possible uses, said Ward 3 councilor Thomas Klepach.

“I can list a number of specific examples of businesses that closed during COVID because they were not able to meet their rent during that period and weren’t able to generate an income otherwise and folded,” Klepach said. “I like the idea of leveraging some of these resources to have a multiplier effect toward economic development in Waterville.”

Coelho mentioned his proposal to provide a $1,000 bonus to city staff as well as public-facing, first-responders that would include everyone from local police, fire and rescue to health and human services. He also suggested looking at the Mid-Maine Homeless Shelter and helping support the creation of a shelter geared specifically toward homeless veterans.

Whatever the city decides, “we should get the biggest bang for our buck,” Coelho said. “We need to make sure we’re spending this money wisely.”

Councilors are not in a rush to make decisions, as the money doesn’t need to be committed until 2024. Municipalities then have until the end of 2026 to spend the funds.

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