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Champaign financial impact from pandemic offset by taxes and repurposing, records show top costs remained mostly same

Owen Henderson / For CU-CitizenAccess

Champaign’s cash outflow reports show that business assistance funding has dramatically increased during the pandemic, aided by a fund program that wasn’t designed to be recurring. 

Between Champaign’s small business incentive program and money from the CURE-ES act passed by the state, businesses in Champaign have already been given almost $667,000 in the first half of 2021, over $100,000 more than the nearly $560,000 they received in all of 2020. 

The money in the small business incentive program came from an increase in sales tax in 2014 that created a leftover pot of $200,000, Senior Planner for Economic Development TJ Blakeman said. The program wasn’t supposed to be recurring — businesses could apply to be reimbursed for some of the costs of starting up like hiring an accountant or going to a marketing company, but once the money ran out, that was it. 

This year, when money for small businesses came in through the CARES Act, the city decided to use the framework they’d created to help give that money out to businesses.

The CURE-ES Act allowed municipalities to create a program to help businesses pay for extra costs brought on by the COVID-19 pandemic, and once those programs were approved by the state, cities and towns could receive money to then distribute to businesses. Blakeman says Champaign reimbursed about 120 businesses in installments of up to $5,000 dollars at a time.  

There are multiple ways to access financial records from the city websites. Cash outflow reports are published bi-weekly by the city and includes vendors and amounts, but lacks finer details. The city financial transparency portal is an interactive data explorer, which can be used to break down spending categories and compare to the budget, and is updated weekly.

Information in the cash outflow reports can show the top vendor payments from the city. From June 26 to July 9, for example, of this year, the top payments were:

  • $672,297 to Health Alliance Medical Plans for insurance invoices.
  • $127,350 to Commerce Bank for accounts payable.
  • $61,166 to Ameren Illinois for street light leasing and utilities.

Although construction and health insurance have remained the highest costs for Champaign over the last few years, the gap between them is closing, according to a review of the past two and a half years of city financial records.

Of the city’s top 10 individual expenditures in 2019 and 2020, at least half were for infrastructure and construction projects with the main spending being done on debt repayment, but so far in 2021, five of the top 10 expenses were for medical insurance invoices. 

In 2019, 34.4% of the city’s expenditures were for construction and improvements and 8.3% were for medical insurance invoices, compared to 15.8% and 12.4% for the same two categories respectively so far in 2021. 

“Projects ebb and flow,” said Champaign Finance Director Kay Nees. She explained that the change in construction spending is fairly normal over the course of each year, and the percentage of city money spent on capital projects will change with the needs of the city.

Infrastructure projects were some of the city’s biggest costs, including 8.6% of spending on the construction of a storm management system and 10% on road construction. Nees said that some spending on these projects was slowed in 2020 because the capital needed for the projects is provided in part by the motor fuel tax, the sales tax, and the food and beverage tax, all of which were greatly reduced by the initial months of COVID-19 restrictions. 

The percentage of Champaign’s expenditures on economic development grants has also gone up in 2021 compared with 2020. The biggest recipients of grant money in 2021 were the University of Illinois and Kraft Heinz, but some local business owners and manufacturers also got money from the city, like Wirco, a metal fabricator with a Champaign foundry, or Janet Bubin, the owner of Kofusion — a local Asian fusion restaurant. 

Blakeman explained the grants were a “city initiative to start turning things around in districts that have seen economic decline.”

According to Blakeman, the program provides financial incentives to companies to invest in Champaign by doing things like building factories or hotels that will create jobs and bring money into the area. 

Over the past year, the role of police in communities has come under much more scrutiny, and calls to reallocate funding from police departments to other community services have gotten stronger. 

However, the percent of total expenditures each year shows that the spending on police hasn’t changed much in recent years from 1.57% in 2019 to 1.37% in 2020 to 2.16% so far in 2021. Finance Director Nees says that the overall amount budgeted for the police department hasn’t changed much over the past few years and that the increase from 2020 to 2021 can be attributed to a lack of spending during the pandemic, rather than an increase in 2021.  

Source: City of Champaign

Nevertheless, Nees says that there are still many ongoing discussions about police policy by the city council. These discussions continue as the city council continues to be criticized on both sides by those who think the city should defund its police force and those who think the city doesn’t do enough to support the department

Tom Yelich, spokesperson for the Champaign Police Department, did not return multiple requests for comment. 

Owen Henderson / For CU-CitizenAccess

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