The Ketchikan Gateway Borough Assembly on Monday allocated the rest of its available coronavirus relief funds after much discussion among Assembly members, settling on an allocation scheme that differed slightly from the plan presented by borough staff.
Of the roughly $10.4 million that the borough received from the federal Coronavirus Relief, Aid and Economic Security Act, $565,695 remained unallocated when the Assembly convened for a work session conducted by videoconference. Of that $565,695, borough staff had recommended allocating $500,000 to either the rent and mortgage assistance program or to the borough’s business grant program. Staff then recommended allocated the remaining funds, as well as all unspent funds from the rest of the borough’s programs, to cover direct costs incurred by the borough and then to cover the wages of first responders in the North and South Tongass Volunteer Fire Departments. The Assembly instead decided to reduce that amount, allocating $350,000 to the borough’s rent and mortgage assistance program and allocating the remaining unspent funds to cover direct borough expenses and first responder wages.
Borough Finance Director Cynna Gubatayao explained to the Assembly during Monday’s work session that the borough’s rent and mortgage assistance program is not projected to have enough funds to match demand for the program through the end of the calendar year, the deadline by which all municipal CARES Act funds must be obligated.
Responding throughout the work session to questions from the Assembly, Gubatayao estimated that the borough’s eligible expenses would total between $50,000 and $60,000. She further estimated that about $400,000 in combined wages for both the North and South Tongass Volunteer Fire Departments could be reimbursed using the borough’s CARES Act funds. That figure would include only eligible wages paid between July 1 (the start of the current fiscal year) and the end of the calendar year; the borough earlier this year reimbursed wages for both organizations from March 15 through the end of the most recent fiscal year on June 30.
Assembly Member Sven Westergard, who was one of the Assembly’s biggest advocates for a child care assistance program in June, asked Gubatayao about the ramifications of allocating $500,000 for an additional round of child care relief instead of the rent and mortgage assistance program.
Gubatayao said that would be an option, but noted: "In the case of the child care, it's true that there has been only one round of that funding; however, many of the same people that are eligible for the child care program would also be eligible for the rent and mortgage assistance."
Gubatayao said the total cost of the child care program was $829,000, through which borough staff processed 932 grants at $500 per child. If the borough were to allocate $500,000 for another round of child care assistance, families would receive about $300 per child instead. Gubatayao added that Dustin Larna, the CFO and assistant director of Residential Youth Care who administered the child care assistance program, indicated that the program could be restarted for a second round of child care relief if the Assembly so decided.
Borough Attorney Glenn Brown added that the child care program could perhaps be more vulnerable to challenge under audit than the rent and mortgage assistance or business relief programs.
"The program that probably causes the most concern was the day care program, in terms of its defensibility under the CARES Act guidance,” Brown explained. “I think the business assistance, the mortgage and rent really is kind of a longer way around providing assistance to families with children. One of the concerns in speaking with Cynna about this is that the rent and mortgage may well run out of money as it stands right now, so standing up another program while we have one that will run short during the month of December, and with that other program being perhaps a little harder to defend than the rent and mortgage, would guide us, ordinarily.”
Later in the meeting, Gubatayao said that once all eligible business relief grants are paid out, the borough will have given about $7 million through its business relief programs, including its personal protective equipment reimbursement program and its small business and general business relief programs. (Some of those business relief programs were funded jointly with the City of Ketchikan, which itself received about $12.3 million from the CARES Act.)
Assembly Member Judith McQuerry asked Gubatayao if the borough could split the $500,000 evenly between rent and mortgage assistance and the business relief program. Gubatayao said that would be feasible, but that $250,000 likely wouldn’t be enough to cover grant totals for the rent and mortgage program for the rest of the fiscal year.
After Gubatayao’s explanations of the fiscal situation, Board Member Felix Wong said he would support allocating the suggested $500,000 of available funds to the rent and mortgage assistance program.
“After hearing some of Ms. Gubatayao’s answers, especially elicited by Mr. (Jeremy) Bynum and Assembly Member (AJ) Pierce, just really solidifies my idea that we really should allocate the remaining funding or the suggested funding of $500,000 to the rent and mortgage assistance program,” Wong said. “It looks like we’ll spend that $500,000 clean out by December, and especially if we have another outbreak situation, God forbid, like what happened at Cape Fox (Lodge), people will be out of work, and they’re going some means to keep their roofs over their heads. So, I would like to see us move to allocate the full $500,000 to the rent and mortgage assistance program rather than try to split it up and see a reduced impact.”
Westergard then asked Gubatayao if the borough could allocate all $565,695 to cover borough expenses and first responder wages. She said it could, and Westergard voiced his interest in that option.
“Personally, I think this actually gets all of our members more money. We don’t have to raise taxes or anything like that,” Westergard said. “It would save the borough money, in the long run, economically, so (it) would be better served, for me personally, to give it back to the borough, so that every member of the borough gets it.”
Assembly Member Bynum proposed a compromise: increasing reimbursement for borough expenses by reducing the allocation for the rent and mortgage relief program.
“I’m kind of an in-between, between Mr. Westergard and Mr. Wong’s opinion on this,” Bynum said. “I think it would be nice to see us put some additional funding into the mortgage rental assistance to ensure that we can get into December, and then, I think that the biggest benefit that we have for all borough residents is for that to go into Motion Number 2, which is to cover the expenses for borough eligible expenses, and that overall would benefit the whole community as a whole equally with the remainder of the funds. … I don’t know that we would necessarily need to allocate all $500,000 to get us to December.”
Gubatayao responded that $300,000 would probably be enough to sustain the rent and mortgage relief program, but cautioned: “That’s cutting it kind of close, in that it may be that there are some people that we’re not able to meet the needs for everybody. But $300,000 would be approximately … what would allow us to function at the same level as November.”
After taking a brief recess to address technical issues with the meeting livestream, the Assembly exited the work session and unanimously voted to allocate $350,000 to the borough’s rent and mortgage assistance program, then voted to allocate any remaining funds to cover borough expenses and wages for North and South Tongass Volunteer Fire Department workers.
Also during Monday’s meeting, Gubatayao noted that eligibility expansions to the borough’s business relief program that the Assembly requested at its Nov. 2 regular meeting have been met with appreciation from members of the fishing community and other industries that had expressed concern with the exclusiveness of the programs.
“That has been very favorably received,” Gubatayao said. “The Assembly’s general intent was to ensure that commercial fishermen were not excluded, and we have, I don’t know a number, specifically, of fishermen, but we do have quite a few applications that have been deemed eligible. They submitted their statements from the fish processors, and we were able to work through the numbers, and there’s quite a few that were eligible. There were a couple of other businesses, like the one engineer that we heard at the last meeting, there were a couple of businesses like that that are now eligible and included.”