Rochester bars and restaurants won’t be billed for their liquor licenses this year.

The Rochester City Council unanimously approved a plan Monday to use $626,000 of the nearly $17.5 million in federal funds the city is receiving through the American Rescue Plan Act to offset the annual fees.

“I was advocating for lowering the fees, and I love this plan,” council member Mark Bransford said, noting it will help the hospitality industry recover.

“It’s at least something for them,” he added.

RELATED: Federal recovery funds could buy down future Rochester levy increases

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City Administrator Alison Zelms said the move will help the businesses that faced a variety of shutdowns and restrictions during the COVID-p9 pandemic.

“It was a way to kind of deliver for the impacted parties,” she said.

The approval came with confirmation that the council intends to reinstate the fee increases originally discussed in 2019. The changes, which were approved at the start of 2020, had some fees doubling after rates remained largely stagnant since 1982.

City Clerk Kelly Geistler said the return to the new fee structure shouldn’t be a surprise for the businesses.

“We have been communicating about these fee increases at every step, from the minute they were passed and at every change we made,” she said.

The council approved fee reductions last year after the pandemic struck, and in December opted to delay the planned increases, but Geistler said the new fee structure has never been completely dismantled.

“This won’t be the first time they are understanding what the amount is,” she said.

Christiaan Cartwright, the city’s license examiner, said bar and restaurant owners were informed earlier this year that they could put off paying fees until August, even though the licenses were granted. The delay means the city won’t need to reimburse fees.

Council member Patrick Keane raised the question of potential businesses seeking a first-time license solely because it would be free, but Geistler said she doubts businesses would seek a license for less than a year due to the paperwork and effort involved.

”I just think it would be very difficult considering what’s required,” she said.

The $636,000 in federal funds is the second item funded by the American Rescue Plan funds. The council also approved using $70,000 to provide people free access to the city’s outdoor pools.

The city has received half of the approved federal funds, with the expectation that the second half will be provided next year.

Also Monday, the council approved a preliminary proposal for using the remaining funds to address budget challenges and fund programs aimed at recovery or city improvements.