The Chilkat Center for the Arts is on the chopping block for the fiscal year beginning July 1. CARES Act coronavirus relief funding may offer the assembly an alternative to eliminating the facility from the borough’s budget.
During budget discussions this spring, assembly members have said that cuts will be necessary to compensate for an anticipated loss of sales tax revenue due to COVID-19 and the loss of school bond debt reimbursement from the state. Members have expressed a desire to preserve essential services, although there are differing opinions about what constitutes an essential service.
At present, the Chilkat Center is still included in the FY21 budget—$80,000 in operating expenses offset by $20,000 in projected rental revenue. At a meeting last week, the Haines Borough Assembly voted to postpone the decision to zero out funding for the facility until its June 9 meeting. In the meantime, borough staff will gather information about the state of the facility and outside funding opportunities.
The CARES Act doesn’t allow municipalities to use funds for revenue replacement, but it does allow funds to go toward “public payroll expenses for employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency from March 1, 2020 through December 30, 2020,” according to a memo dated May 6 from former manager Debra Schnabel.
At a budget meeting on Monday, the assembly discussed the possibility of using CARES Act funds to cover first responder wages during this time period, freeing up borough money for other uses.
“It may be possible to shuffle funds… in such a way that some of these programs that are out there can proceed forward for another year while we have a bigger discussion about how to fund them,” said assembly member Paul Rogers, who made the motion to eliminate funding for the Chilkat Center at a meeting last week before the assembly voted to table the discussion.
If the assembly decides to eliminate funding for the Chilkat Center, the facility will revert to its original owner, Alaska Indian Arts, Inc. (AIA).
In 1979, ownership of the Chilkat Center was transferred from AIA to the Haines Borough for “educational and performing arts activities,” according to a letter from then AIA vice president Lee Heinmiller to the Haines Borough dated July 26, 1979.
“Should the Haines Borough find that the facility no longer meets the intended needs, then the property will revert back to (AIA),” the letter reads.
At Monday’s budget meeting, it was suggested that the decision to get rid of the facility this year would be rushed given the June 15 budget deadline.
“The concept of the borough divesting itself from the Chilkat Center, it seems like it’s really hasty,” Haines resident Cynthia “CJ” Jones said during public comment.
Jones said deciding the center’s future by June 15 would likely involve basing decisions on speculation and rushed research. She said the borough would be better served by funding the facility’s operating costs this year and using the extra time to create a viable long-term plan in consultation with stakeholders including the Foundation for the Chilkat Center for the Arts (FCCA) and AIA.
So far, AIA has yet to discuss what would happen if the organization becomes owner of the Chilkat Center once again.
“We’re waiting to see if it’s just political posturing,” current AIA director Lee Heinmiller said. Conversations about returning the Chilkat Center to AIA have taken place multiple times over the past 40 years of borough ownership, Heinmiller said. If it turns out the borough is serious this time, then AIA will begin discussing what happens next.
Heinmiller said a big concern would be what happens to radio station KHNS, which has been housed in the facility since the early 1980s when it invested $60,000 in the center to build its studio.
At this point, it’s impossible to know what would happen to the radio station if the Chilkat Center was to revert to AIA, station general manager Kay Clements said. Under the station’s current agreement with the borough, Clements manages the building, facilitating rentals and coordinating building maintenance, in exchange for free rent for KHNS.
Clements expressed doubts about whether KHNS would be able to remain at the Chilkat Center under AIA ownership. Relocating KHNS would prove costly, requiring federal approval to change the station’s licensing and input from engineers to design a new space. Where the money would come from is an open question, Clements said.
Proponents of the center say it costs the borough a relatively small amount—roughly $60,000 a year—in exchange for the services it offers.
“The center is a multi-faceted user facility,” Haines resident Tresham Gregg said. In addition to the radio station, the facility hosts performing arts events and church services, offers educational opportunities including dance and drama instruction, and provides a gathering place for community events and potential emergencies.
Chilkat Center advocates have also expressed doubts about the center’s ability to secure enough outside funding to replace borough funds.
“(The elimination of borough funding) would be the death of the Chilkat Center,” FCCA board vice-chairman Lorrie Dudzik said at Monday’s budget meeting. “Neither AIA nor the foundation for the Chilkat Center… has the funds, the staff or the expertise to take on the Chilkat Center facility.”
It is possible that a greater portion of the center’s funding could be secured through outside sources, Gregg said, but this would likely create the need for paid staff positions to manage the facility and conduct outreach.
At Monday’s meeting, the assembly directed borough staff to research the potential for increased grant eligibility if the center is no longer borough-owned.
Even if funding opportunities exist, there is no guarantee the Chilkat Center would be able to secure them.
The National Endowment for the Arts has money, but it’s hard to get, especially in the competitive environment of the pandemic which has left many organizations without funding, Clements said. She said it is unclear who would be responsible for writing grant applications on behalf of the Chilkat Center.
“It’s kind of idealistic to think it’s going to roll over and nonprofits will handle it and grants will take care of it,” Clements said.
Another question is whether the borough would owe the state $1.25 million if the facility reverts to AIA ownership.
At the time the facility was transferred to the borough, the Alaska Legislature appropriated roughly $1.25 million to improve the facility—adding a new wing and updating the lighting. Heinmiller said accepting the state funds involved an agreement that the building would be managed as a performing arts center. If the building stops being utilized for this purpose, the borough could be on the hook for the money.
Borough clerk and acting manager Alekka Fullerton said the borough has requested a legal opinion from the Alaska Department of Law.