Borough considers grant cap

Staff were looking for direction on, above all else, how much funding the grant program should receive each year, calculated as a percentage of the borough’s average sales tax revenue over the previous three years. The Assembly directed staff to set that amount at 6%, which would be enough to cover all or nearly all of the grants the borough has awarded annually over the past 15 years.

 Also as part of that motion, the Assembly directed staff to cap grant awards. Starting this year, each grant will be no more than $25,000, and each grant will not exceed 25% of the annual operating budget of its recipient.

Finally, the Assembly directed staff to continue to allow grants to be awarded to serve educational and recreational needs in the community.

There was some confusion at the start of Tuesday’s meeting about whether education and recreation would remain eligible criteria for grant funding in the future.

A draft revision of the grant program application attached to Tuesday’s meeting agenda listed only three types of services as eligible for grant funding: economic development, transportation and animal protection. Currently, education and recreation are eligible for grants.

Borough Economic Development Coordinator Peter Amylon explained to the Assembly on Tuesday that the exclusion of those two criteria was only hypothetical, intended to demonstrate one option the Assembly might consider if it was interested in reducing the size of the grants program.

He explained to the Assembly that, even if the body chose to eliminate those two categories, it might not necessarily affect any returning grantees. Seven of the nonprofits that applied for and received funding last year listed only recreation or education as the service their grant would help provide; Amylon estimated Tuesday that at least five or six of those applicants could easily apply for funding under a different criterion.

Still, most Assembly members expressed support for maintaining those areas of the borough’s powers as eligible services for grant awards, and Assembly Member Judith McQuerry explicitly requested that those powers be maintained in her direction to staff.

The recommendation to cap grant awards at 25% of the applicant’s annual operating budget was made by Assembly Member Jaimie Palmer. Palmer, who last year sat on the committee that evaluated the grants, said the committee had to weigh the applicants’ self-sufficiency in deciding on grant awards.

In addition to that cap, McQuerry proposed capping individual grant awards at $25,000.

Together, the Assembly supported both caps, seeing them as a way to prevent grant requests from larger organizations from getting too big while also ensuring that smaller and newer organizations look to funding sources beyond the borough.

But the $25,000 cap won’t affect the $60,000 that the grant program disburses for the University of Alaska Southeast’s testing program, the borough’s largest grant recipient. Staff explained earlier in the meeting that they have been interested in funding that program through an annual borough contract, rather than a grant. The Assembly expressed support for that approach.

On Friday, Amylon said the borough has been in touch with UAS staff to make that change ahead of the start of this year’s grant application process.

Beyond the UAS grant, had the $25,000 cap been enacted during last year’s grant process, it would have affected three of the 22 grants awarded. First City Homeless Services and Rendezvous Senior Day Services both applied for and received $30,000, while the Ketchikan Reentry Coalition applied for and received $26,250.

The Assembly considered other conditions on applicants to the program, but disregarded them for various reasons.

Borough Mayor Rodney Dial proposed adding a condition that grants not be awarded to organizations that could cause division in the community, echoing the concern that led him to veto $1,638 in grant funding to the Ketchikan Pride Alliance last summer.

“In our hyper-polarized world,” Dial explained Tuesday, “we need to start asking some questions, and that question needs to be, will the issuance of the grant provide the community with essential services that are authorized by powers, regardless of the political and social opinions of the citizens at large, and/or is it likely that any group would be excluded or made to feel unwelcome participating in the service or activity funded by the grant? Now, I think if the answer is some will feel excluded based on the political or social opinions of the grantee, I think that it should be a scoring criteria that it could potentially be divisive.”

But some Assembly members pushed back on that suggestion, arguing that it would inject a subjective, inherently political decision into a process that otherwise is aiming to be as objective as possible.

 “What we’re attempting to do is take a bunch of the subjectivity out,” explained McQuerry. “And what I’m afraid of is that adding that sort of language adds a whole ‘nother piece of … subjectivity to the whole process, because it will depend on who’s on the committee, and what they think is political.”

Another proposal that the Assembly declined to pursue was capping the total number of grants awarded. Palmer also suggested limiting the number of grants awarded, with priority given to early applicants. The Assembly initially supported that approach, but enthusiasm waned later in the meeting when some members shared concerns that making the process so time-sensitive might impede new applicants and add uncertainty for existing ones.

“What I don’t like about that is, … as an example, you’ve tried to rent a Forest Service cabin before, right?” said Assembly Member Jeremy Bynum. “Six months out, they open the schedule up, and what happens is if you’re sitting there at midnight and you wait, as soon as they become open, you get your spot, right? If we’re telling applicants that the deadline is April 1, then their applications have to be in by April 1. But if … it’s as soon as we announce the grants program, and you say, ‘Go! It's midnight!’, we might be putting a lot of  smaller nonprofits at a major disadvantage to be able to put their applications together in a thoughtful way, meet all of the criteria and be able to come to us and ask for their grant.”

6% of average sales tax revenue

The Assembly settled on a 6% figure for the sales tax revenue toward the end of its work session, reasoning that, at that level, the Assembly would have been able to fund all grant requests it received in the past decade, excluding the UAS grant (on the assumption that UAS testing will be supported by contract, rather than through the grant program.)

In the past 15 fiscal years, 6% of the three-year average would range from about $286,000 to $332,000. Amylon on Friday said that a 6% level of funding for the program would amount to about $314,500 available in grant funding for the next fiscal year.

Amylon said Friday that borough staff are making other improvements to the grant process based on feedback from previous grantees and from members of the Grant Committee, such as having two grant committee meetings, rather than one (something that members of the committee asked to change); clarifying the specific bounds of the criteria that are eligible for funding; and using a weighted scoring system that will make it easier for grant recipients to know how to improve their applications in future years. All of those changes will be implemented in time for this year’s grant application process, Amylon said.

Also, in addition to contracting support for the University of Alaska Southeast’s testing program, staff are looking at potentially funding two other previous grantees through contracts, said Amylon: the Ketchikan Humane Society, which has received between $2,500 and $5,000 in annual grant funding since the 2013 fiscal year, and Southeast Alaska Independent Living, which has received between $9,147 and $12,000 in annual grant funding since the 2011 fiscal year. Staff likely would be able to exercise the borough’s animal protection and transportation powers to establish those contracts, Amylon explained at Tuesday’s meeting.

The Borough Grant Program application period opens on Feb. 20. More information can be found on the borough website at kgbak.us.