U.S. Senator Dan Sullivan teleconferenced into the Sitka Assembly meeting on Tuesday to give a report, and spent around half an hour fielding questions and concerns from assembly members, most of it focused on federal funding to support the city amid the coronavirus pandemic.
Senator Sullivan said from the over $1.3 billion the state had received in federal relief funds, there was some confusion about how cities could spend that money and whether it could be used to cover lost revenue. So he and a group of legislators, including Senator Lisa Murkowski, introduced the Coronavirus Relief Flexibility Act.
“Essentially my bill says if you have lost revenues, which I’m sure the borough does, related to the pandemic, that money should be able to be used to help make up for that,” he said. “I think it makes sense. I had a long meeting with the President and the Secretary of the Treasury about this last week. Trying to get them on board.”
Regardless of whether restrictions on the CARES Act funding are ultimately loosened up to allow cities to reimburse themselves to cover lost sales tax revenues, the estimated losses to local governments are great. The Alaska Municipal League estimates local governments will lose out on at least $500 million dollars as a result of unanticipated extra expenses and lost revenues.
Assembly member Richard Wein asked if Sullivan could help the city find more federal relief through refinancing the city’s outstanding loans on Blue Lake Dam. The city is currently trying to refinance its bond debt with the Alaska Municipal Bond Bank. But Wein said refinancing with the feds would get Sitka a better interest rate and allow the city to save more money during a financially precarious time.
“If we come up short on revenue, we still have to pay our debt burden,” he said. “So, therefore, this is directly related to COVID as anything else, because we still have to deliver services.”
City administrator John Leach wanted to know if any more of the CARES Act money or future bills could be used to cover infrastructure needs in the economic recovery.
“Specifically our Green Lake Hydro. Maintenance has been put off for upwards of 40 years and we’re about to take on $13 million dollars in costs to get that hydro-plant up and running again. We have big port infrastructure issues with our Marine Service Center and our haulout that we’re working on right now that could be future debt,” he said.
Sullivan listened to the assembly members and asked for them to send over more info on refinancing the city’s outstanding bond debt and said he wanted more funding for infrastructure to be included in the next coronavirus relief package.
In other business the Sitka Assembly:
- Approved moorage and utility subsidy programs to be funded with $4.5 Million in CARES Act funding (Read the story here)
- Unanimously approved a resolution to accept $14,057,653 in federal coronavirus relief, pass-thru funds from the state. The city is expected to receive this money in three disbursements.
- Heard a report from the Alaska Trollers Association about a lawsuit with the Wild Fish Conservancy, which is currently in federal court in Washington state.
- Unanimously authorized the city to obtain a loan from the Alaska Municipal Bond Bank to refinance for savings from the city’s outstanding loan from the Alaska Energy Authority.
- Was undecided on whether to eliminate the code requirement for an assistant fire chief position. The measure tied 3-3 with members Christianson, Eisenbeisz and Mayor Gary Paxton opposed. It will come before the assembly for a second reading.