Over the last few months, cities, boroughs and communities across Alaska have received over $300 million in federal coronavirus relief — but the funding comes with significant strings attached. Leaders in some of Southeast Alaska’s smallest communities have said that there are unforeseen challenges of using that federal aid.
In mid-July, Angoon would normally be bustling with boats. Charters usually collect tourists to go fishing in Chatham Strait or to stay at remote lodges. But not this year.
“Right now, it’s very, very quiet in Angoon,” said Angoon’s mayor, Joshua Bowen.
Little to no tourism thanks to the coronavirus has had profound economic impacts on the Admiralty Island village of around 450 people. Lodges aren’t opening, the city is missing out on sales tax revenue, and getting stuff in and out–especially with a lighter ferry schedule this summer–has become more expensive too.
“It’s not our fault. We’re just here and now everything that’s happening around us and around the world is increasing costs for us in the village, which are already high enough and that paired with the lack of what are normally around jobs,” Bowen said. “It’s definitely causing some hardship.”
But CARES Act funds are providing some relief. The City of Angoon has spent about $49,000 of the $220,000 they’ve received from the program so far. The town distributed $50 store credits and $100 energy credits to each household. They also helped support a school food program, made and distributed masks to all local residents and purchased laptops for city council members to work remotely.
Angoon has lots of ideas for the remaining funds, which could include an extra $22,000 if they spend at least 80 percent of what they have already. The additional funding is part of a second and third wave allocated for communities whose economic activities were significantly impacted by the pandemic.
A big priority for the town is hiring a dedicated employee to help coordinate CARES Act spending. That person would submit required monthly expenditure reports to the state and make sure that they’re spending the money appropriately. Expenditures that don’t follow federal guidance have to be paid back.
Lynn Kenealy is a local government specialist for the Alaska Division of Community and Regional Affairs, the state agency in charge of distributing the federal funds to local entities.
“We suggest communities take care when choosing expenses,” Kenealy said. “Each community is responsible for assessing what is allowable and may have to return money if it’s misspent.”
She said they have helped communities brainstorm, but they can’t be the final decision makers. According to federal guidance, the money can be used to cover “necessary expenditures” incurred due to the COVID-19 public health emergency, and it can’t include items listed in the budget prior to late March. Eighty-nine Alaska communities eligible for funding haven’t accepted it yet, leaving around $40 million allocated for them on the table, according to the most recent data from the state. At the local level, figuring out how those funds can be used hasn’t been easy.
“The state was kind of vague on what can be used as far as expenditures and everything,” said Jessica Adams, who’s the city treasurer for the Chichagof Island community of Pelican. “This is my first time dealing with anything like this. Mainly for me, it was just how to go about doing the reports and how often they needed them, what all they needed from us.”
Thankfully, Adams said, the Alaska Municipal League stepped in to help answer their questions. The non-profit provides resources and support to local governments.
Like Angoon, Pelican relies heavily on summer tourism, and they’ve been hurting economically this summer too. But, Adams said, the town has focused its spending more on health and safety measures. The local clinic has been unstaffed since March, and their EMS group is all volunteer. They needed the basics: masks, hand sanitizer and cleaning supplies.
“So when they announced that there was going to be CARES Act funding, it kind of…there was a lot of relief for all of us in here because we knew that we were going to be able to do the necessary things to kind of prepare Pelican for what may be headed,” Adams said.
They’re also looking at investing in sanitation services or a cell tower to improve emergency communications. Whether they’ll use all the funds is as unknown as when the pandemic will end, but both Pelican and Angoon officials say they feel relief knowing that the money is there.
Of all the CARES Act funding allocated for Alaska communities, cities and boroughs, only around 58 percent has been distributed so far. That includes the second and third waves of funding for certain communities. The state is reaching out to any eligible community that hasn’t yet accepted the money. This pool of CARES Act funding must be spent by December 30.
Erin McKinstry is a Report for America corps member.