State tells Methuen to return $650K of pandemic relief funds

State officials have told the city of Methuen that it has to return about $650,000 in federal funds spent on hazard pay for some employees and relief for restaurants.

The Eagle-Tribune reports that the state Executive Office for Administration and Finance told Methuen Mayor Neil Perry that the hazard pay stipends, totaling $500,000, amount to impermissible bonuses for workers who did not face a physical hardship related to their employment. The restaurant money was given to owners to reimburse licensing fees, which was also not deemed an eligible expense.

Prior to the money being distributed, Perry said the city’s financial officer sought guidance and told him the hazard pay was an allowable expense. He said the state should’ve been more forthcoming about the conditions for spending the money and he has appealed the state’s decision.

The city received $4 million in federal pandemic relief funds.

Public records obtained by The Eagle-Tribune from the state show that hazard pay was issued to 346 city employees, including personnel in human resources, accounting, public works and the police and fire departments.

The mayor said the stipends went to employees working in person at City Hall or on site at their workplace in prorated amounts of up to $1,500, depending on the amount of time they worked during the pandemic.

Teachers were not issued the one-time payment because they had received a 1.5% raise and no one in his office received a stipend, Perry said.

He said Methuen has struggled as a border community when neighboring New Hampshire was more open during the pandemic.

The state determined the documentation provided for police and fire department staff did not sufficiently show that the work performed was related to the pandemic.