Daily Sitka Sentinel

Assembly Closes Out Phase 1 Virus Fund

By SHANNON HAUGLAND

Sentinel Staff Writer

The Assembly at a special meeting Tuesday denied all 10 appeals for city CARES Act funds for businesses and nonprofits, under Phase 1.

Most had qualified for some funding under Phase 1, but checked a box on the application that asked for Assembly consideration for a higher level of funding than they qualified for under the city’s rules.

All but one of the appellants were encouraged to apply for some of the $3 million available under Phase 2, to for-profit and nonprofits. Phase 1 grants were for $2,500 through $10,000, with the amount awarded dependent on gross revenues.

The application deadline for Phase 2 funds is Friday, October 30.

“That really wasn’t very fun at all,” Mayor Steven Eisenbeisz said at the end of the meeting, after all requests were denied. “We’re within pretty strict federal guidelines and I don’t know if we have much leeway.”

The Assembly was acting in a “quasi-judicial” capacity at the meeting, with each applicant getting three minutes to make their case. The testimony provided the Assembly with a snapshot of the various effects of the pandemic on the business and nonprofit community.

That included canceled trips and overnight stays, canceled events and fundraisers, decreased contributions, increased need, and extra costs to cover COVID precautions. The purpose of the funds was to provide rapid economic relief, and help businesses  and nonprofits get through the year.

The Assembly asked some questions and provided appellants with suggestions for other sources of funds. Members were sympathetic to the challenges of the businesses and nonprofits, but felt the challenges were similar to those experienced by the entire community.

“Making these decisions is incredibly hard,” Assembly member Kevin Knox said to one of the applicants. “None of these is going to make people whole, obviously. ... We could have a line out the door of people (asking) for extra because it’s been extra hard on everyone.”

Some of the companies had invested in infrastructure that they hoped to cover through this season’s business, in tourism or fishing.

In denying the appeals, the Assembly also encouraged the applicants to apply under Phase 2, and keep an eye out for other funding opportunities. The city received $14 million in CARES Act funds, with a total of $6 million available to businesses and nonprofits - under Phases 1 and 2.

City Finance Director Melissa Haley said all but one of those filing appeals were eligible  for funding under Phase 1, with checks held up pending the final decision by the Assembly on Tuesday. She said the finance department will continue moving forward to distribute the funds to those businesses and organizations, under the amount they qualified for.

She noted that the appeals process under Phase 1 was designed before the city knew that additional funding would be available under Phase 2. Some of those who had planned to appeal for a higher amount of funds under Phase 1 in the end withdrew their appeals, and decided instead to just apply for Phase 2 funding, she said.

The maximum grant amount available under Phase 2 is $50,000.

The businesses and nonprofits that filed appeals were Alaska Skiff, Gavan Hill Bed and Breakfast, F/V Sea Lark, Northern Images, Sitka Pregnancy Center, Sitka Sportsman’s Association, Soup Kitchen at St. Gregory’s Catholic Church, Takeena Adventures, The Greater Sitka Arts Council and Toad’s Taxi.

One business that was not eligible under Phase 1 was Takeena Adventures, since the company is new and didn’t have the required record of revenues for either 2018 or 2019. The Assembly tried to figure out how to help, including looking at expected revenues, but in the end was not able to provide any relief.

“We have to live within the guidelines,” Eisenbeisz said, while agreeing that there should be a way to help a company such as Takeena.

City Administrator John Leach said the issue with any new business is that companies and nonprofits need to have a some sort of baseline to show how COVID affected each particular business or nonprofit, which is difficult without a record of revenues from before the pandemic hit.