Daily Sitka Sentinel

Sitka Faces Choices On CARES Act Fund

By SHANNON HAUGLAND
Sentinel Staff Writer

City hall has been receiving dozens of suggestions a day since word came down that Sitka may get some $14 million in CARES Act funds.

City Administrator John Leach said today it’s important to get help quickly to individuals and businesses who need it, but the city also needs to receive clarity on how the funds can be spent.

“Ultimately it will come down to the U.S. Treasury rules on how we can spend it,” Leach said. “Whether we can line up the public’s need with how the treasury says we can spend it. It may be even longer till we see that funding. Plenty of lobbying has happened.”

The Assembly had a brief discussion about the expected windfall at its regular meeting Tuesday. After floating a few ideas, members decided to hold off until a work session is scheduled.

“It will take an Assembly work session on how to prioritize and how to help everyone out,” Leach said, adding that some things are already known about how CARES Act money can be spent.

“It has to be directly related to COVID-19 response and recovery,” Leach said. “We can’t put it into savings; it has to be spent. ... It will be audited, tracked and if it’s not spent on where the Treasury says it needs to be spent they will want it back.”

(A potential complication to the process is a lawsuit filed Wednesday by a private citizen seeking to block the plan approved by the Legislature for distributing CARES money to municipalities, saying the plan is unconstitutional.)

Leach said he’s hoping the Treasury rules are coming soon, and the Assembly can plan a work session, hopefully before the next regular meeting May 26.

“Knowing so many people in need of it now, that’s why we want to move quickly, and give the green light, and not have any fear of it being taken back because it wasn’t spent correctly,” he said.

Leach wants to work with Sitka Tribe of Alaska on the best use of the CARES Act funds. The tribe expects $6.9 million from CARES, and has been discussing possible relief ideas for its citizens.

“We’re not talking about spending the tribe’s money in any way, shape or form, but depending on how they spend their money ... ,” Leach said. “It’s for us to work together, find out what their priorities are, whether we have overlap and how to spread funding further.”

Assembly members Thor Christianson and Kevin Mosher shared some of their thinking with other members at the Assembly meeting Tuesday. 

Christianson said he and Mosher were working on an ordinance which included utility and moorage relief for those who have suffered financially because of COVID mitigation requirements. 

Mosher said, “My vision would be to hopefully use up the first bunch of this money to do something that would be equitable for everyone in town that is affected, and make it as easy as possible but follow the guidelines.”

Richard Wein said he would prefer a full Assembly work session to get organized, including creating categories, guidelines and priorities, as the “fairest and best way” to proceed. He noted the total amount allotted is equivalent to about $1,600 per citizen – or an extra Alaska Permanent Fund dividend check.

“It’s a lot of money, but by the same token it’s not,” he said. Employing a fishing metaphor, he said, “These CARES grants have already had a ‘chum effect’ around the USS Sitka... This could turn wonderful, or it could be a problem.”

Mayor Gary Paxton listed examples of businesses that have been harmed, including private tourism businesses and nonprofits.

“How you create that mosaic is going to be a challenge,” he said. He agreed that the Assembly should have a work session “as soon as practical.”

The packet for Tuesday’s Assembly meeting included a “white paper” from the finance staff about how the funds can be spent. It’s available on the city website.

In public comments at the meeting, Robin Sherman, program manager of the Sitka Legacy Foundation, said: “To the extent that the Assembly decides to use CARES Act funds to assist households, I encourage you to work with the existing nonprofit organizations that have expertise in this area. We have many nonprofits that know how to distribute food and supplies and provide housing assistance, because they’re already doing it. To the extent that the community wants to support local businesses with CARES Act funds, I ask that you provide the same opportunities to nonprofits.”

Some business owners and representatives also submitted comments that were read aloud at the meeting.

Pat Kehoe, representing Island Artists Gallery, commented on the hardships on small businesses, particularly those dependent on cruise ship visitors.

“Please remember the small businesses that are the backbone of Sitka as you make the tough decision about how these funds are to be spent,” she said.

Frances Donohoe talked about the effects the lockdown has had on her business, Sitka Cirque, and the continued difficulties she will face when she reopens after being closed for the last few months.

Fewer students, a loss in income and increased expenses are among them, she said.

“Take a moment and consider what Sitka would be like without its community arts and after-school programs,” Donohoe said. “Please do not forget us as you decide how best to distribute financial aid.”