Sitka’s already-difficult financial picture got a bit more challenging Tuesday night (9-10-19), when the assembly turned down almost a quarter-million dollars in federal grant money to create a sub-grant program. City staff successfully argued that they couldn’t implement the program, even though they’d been awarded the money to fund it. The money, they said, came with strings attached.
The $238,000 grant was awarded to the city by the U.S. Department of the Interior to establish a “sub grant” program for historic preservation grants. It’s more complicated than a pass-through grant: The city would actually have to establish a competitive grant program. Sitka was one of nine communities nationwide to receive the award. But Chief Administrative Officer Jay Sweeney said that the time and risk involved with starting a program, even with funding, may outweigh the benefits.
“The goals of the program themselves are noble and laudable. Who would not object to revitalization of historic properties. The comments we’re going to make have nothing to do with the goals of the program,” Sweeney said. “But they do have to do with the fact that we simply cannot as an entity, the finance department, administer this program without additional resources. If the program were to be passed and additional resources given to us, we will fail.”
But Sweeney said even if they contracted someone to do the work, city staff would still need to oversee a lot of the process. And if they missed anything in assessing the finances of the program, the responsibility would be back on the city, meaning they could get ding’d during a federal audit.
“This is going to consume a significant amount of management time and attention at a time when we only have so much to spare,” he continued.
Assembly member Kevin Mosher said he thought it would put too much of a burden on city staff, when they’ve already been asking them to cut back.
“Some things may seem nice on paper, but when you’re the one responsible for all of that, it’s a whole different story,” he said. “We’re in a time when we’re asking for efficiencies. I know I’ve been pushing that and several of us have been. So why would we say be efficient, and oh, by the way, deal with that. It’s a lot of stress, a lot of pressure.”
Member Steven Eisenbeisz asked why city staff had applied for the grant if they knew they didn’t have the capacity to accept it. Controller Melissa Haley said the grant was a community led effort and originally they applied for $750,000. Even then, both Planning and Finance’s recommendation at the time was to pull the application.
Mayor Gary Paxton said he’d spoken to Roger Schmidt, the executive director of the Sitka Fine Arts Camp, who he said had someone in mind who had the expertise to administer a program. The camp on the historic Sheldon Jackson campus would be a contender for historic preservation grants if the program became operational.
KCAW spoke with Schmidt today who said he felt an opportunity was lost to pour money back into Sitka’s economy.
“The city is under a lot of stress right now, and I don’t think they’ve received the support they need from our Assembly. We’ve seen a lot of department heads leaving and a lot of members of the city government choosing not to be a part of the city government anymore. I think that what I saw last night was what it looks like when a city is too stressed to be able to accept free money from the federal government.”
Ultimately the group voted unanimously against accepting the grant.
And their gunshy-ness over grant money didn’t end there.
Later in the same meeting, the assembly also voted against applying for a grant from the Alaska Department of Transportation. If awarded, federal money would be administered by the state to fund city transportation projects. Public Works Director Michael Harmon said the opportunity opens up to cities once every few years.
“They’re looking at probably about $50 million dollars statewide going into that program, and just a good opportunity for us to get in on it,” Harmon said.
Harmon proposed a combination project to repair Lincoln Street and Katlian Street. All-in-all, it would cost around $12 million–but the city would apply for only around nine million from the state, since the program wouldn’t fund utility improvement costs. And he recommended the assembly offer more than the minimum nine percent grant match for the application to be more competitive.
Member Steven Eisenbeisz noted the assembly already set aside money for improvements to Lincoln Street earlier this year.
“If we’ve already committed a certain amount of funding to redoing a street, that’s gonna be included in this, that match should be pretty easy to come by, in my estimation.”
And some assembly members were concerned about the pressure to complete the project, particularly if they weren’t awarded full funding. Member Richard Wein cited some city projects, like repairs to Crescent Harbor, where the city only received partial funding and had to look for ways to make up the difference.
“I do have great concerns as to the need at this time to even proceed, I’m trying to look for reasons to go ahead but I’ve seen how free money, or the allure of it, has pushed us into very interesting situations,” he said. “I don’t want to see our debt burden increased.”
During persons to be heard, Sherry Aitken said she hoped the assembly would vote yes.
“I was sitting in my car, eating my McDonald’s burger late at night after just getting home from work and I whipped a [u-turn] and came down here at speed, and that’s why I’m a little breathless. With all due respect, you need to vote yes. There’s no downside. I don’t see that there’s a discussion to have. It’s money you could possibly get, if you don’t get it you could vote no.
Ultimately the assembly failed to pass a motion, on a 3-3 vote with members Kevin Mosher, Richard Wein and Aaron Bean opposed.
In other business…
- The assembly approved negotiated union agreements between the Alaska State Employees Association and the Public Safety Employees Association and the city- those agreements included wage increases over the next three years.
- The assembly passed a measure to make around $150,000 in electrical repairs to the former Sitka Community Hospital building. The motion passed on second reading with members Aaron Bean and Richard Wein opposed.
- On second reading, it approved the receipt of a $842,000 federal grant to do an environmental impact study as a first step in building a new seaplane base. The group also approved $56,000 in matching funds.
- The group discussed upcoming interviews of two finalist vying for the city administrator job, and interim administrator Dave Miller gave notice that he will be leaving the post sooner than he’d initially planned.
Watch the full Tuesday, September 10 Sitka Assembly meeting here.