In the next six months, Alaska municipalities will need to figure out how to distribute a total of $569 million in federal CARES Act coronavirus relief in a quick, effective and legal manner. There is little uniformity in the way local governments are tackling this challenge.

“It feels like someone passed away and there’s a will and nobody knows where the will is,” Haines Borough Assembly member Gabe Thomas said at a recent commerce committee meeting.

Between now and the end of the year, Haines is expected to receive $4 million in CARES Act funds in three installments. The first installment is $2.1 million. The borough must spend 80% before it receives the second and third payments, each worth roughly $900,000. The CARES Act requires funds be used exclusively to cover “necessary expenditures incurred due to…COVID-19” between March 1 and Dec. 30 of this year, but the details are left up to individual communities.

Last week, the Haines Borough Assembly tentatively approved a spending breakdown for the first $2.1 million: $278,000 for a new ambulance and associated shipping costs, $200,000 for a temporary morgue, $668,000 for the borough’s coronavirus-related expenses, $200,000 for food assistance, $300,000 for utility assistance and $500,000 for small business relief. The assembly came up with the distribution plan after considering borough staff recommendations at two ad hoc committee meetings held in mid-May and early June.

The breakdown is still a work in progress. At a commerce committee meeting Tuesday, members recommended the full assembly increase funding by an unspecified amount for business grants in the first round of CARES Act spending.

The recommendation was in keeping with testimony from business owners at the meeting, who said local businesses needed as much help as they can get.

“A lot of us are looking at giving back really big deposits, and when you’re considering 18 months without revenue…we’re going to need to tap into everything that’s available,” tour operator Andy Hedden said.

The $500,000 set aside for business grants could get used up pretty quickly. The program proposed by staff awards grants based on a business’ gross revenue as reported on borough sales tax returns. A business that makes $25,000 and is able to demonstrate economic impacts as a result of COVID-19 would receive $500. Grants increase in size to $10,000 for businesses grossing over $1 million.

In 2019, 480 businesses filed sales tax returns, according to chief fiscal officer Jila Stuart. Just over half, 252, grossed less than $25,000, and 27 grossed over $1 million. If all 27 of the highest grossing businesses in Haines apply and are eligible, that would account for more than half of the funds currently set aside for business grants.

Increasing funding for businesses will require reductions in other areas.

Resident Thom Ely said he believes business funding should be doubled and should take precedence over capital projects like the proposed morgue and the ambulance, which the assembly funded earlier this month.

A number of questions remain about the business grant program including how to assess the 2019 income of nonprofits and businesses, like air carriers, that do not pay borough sales tax. The assembly will continue to discuss the program and other CARES Act spending priorities on June 23.

Assembly members will have opportunities to adjust spending distribution throughout the year, as the community receives subsequent CARES Act installments. Assembly member Jerry Lapp advocated for adjusting business grant funding in the future, based on the number of applications received.

Many other municipalities are at a similar stage in the CARES Act planning process.

In Wrangell, the assembly approved a few initial spending items: $200,000 for an ambulance, $60,000 for testing seafood processing workers and $400,000 for a variety of programs based on the recommendation of the borough’s Economic Development Committee.

Wrangell economic development director Carol Rushmore said the committee began meeting in April to discuss business assistance ideas. That was before Wrangell knew how much it would receive in CARES Act funding. Once this became clear, the committee worked out the details for an initial round of programs that could be implemented quickly and that the borough was confident were in keeping with CARES Act guidelines.

Programs include assistance for food, social services, utilities and moorage; local business spending incentives; rewards for individuals who wear masks; subsidies for personal protective equipment purchases; and a tiered $200,000 grant program for tourism industry businesses based on business type with tour operators receiving $5,000, restaurants $3,000, hotels $2,000 and retail stores $1,000.

At present, Wrangell’s approved spending accounts for roughly $660,000 of the $3.9 million the borough is expected to receive. Assembly meeting packets identified future spending including $350,000 to cover staff wages associated with pandemic response and an unspecified amount to install touchless bathroom fixtures in public facilities.

Petersburg is also in the early stages of planning. The community recently passed a resolution approving $390,000 to support nonprofits and child care providers, but most spending decisions for the borough’s $4 million in CARES Act funds have yet to be made.

“Petersburg has generally looked at ways to spend the CARES funding that will offset costs associated with responding to the pandemic, and helping those businesses and organizations that have been adversely effected,” borough manager Steve Giesbrecht said.

Giesbrecht said so far, the process has been pretty informal.

“Ideas have come from local nonprofits, trade groups, local citizens, advisory boards and our borough staff,” Giesbrecht said. “Our staff get the ideas, vet them to make sure it is something that fits within the requirements of the CARES Act funding, and develop the particulars for the assembly to review and discuss.”

Giesbrecht said many spending decisions will be made later in the year, after the town’s summer season unfolds and the borough has had a chance to evaluate the areas of greatest need.

For most municipalities, CARES Act distribution will be an iterative process, requiring ongoing discussion.

A few communities are moving more quickly, including Skagway.

Skagway has already approved distribution of the $2.9 million it received in the first round of CARES Act funding. The breakdown includes $1.4 million for monthly stimulus checks for individuals and $1 million in initial funding for a business grant program developed by the Skagway Development Corporation. Including subsequent rounds of funding, the municipality plans to spend $2.5 million on the business grant program.

Skagway developed its spending breakdown during a series of finance committee meetings. Other spending areas include food bank assistance and municipal expenses like employee payroll and upgrades to computer systems so residents can access services remotely.

At the Haines commerce committee meeting, assembly members cautioned against comparing Haines to a community like Skagway, which is going to receive nearly twice as much in direct CARES Act assistance and has a population less than that of Haines.

Wrangell and Petersburg are more comparable to Haines in terms of population and CARES Act funding amounts. These communities range in population from 2,500 to 3,000, and are slated to receive between $3.9 million and $5.3 million.

The reason Skagway is receiving so much assistance in proportion to its population is because the formula the governor created to parcel out municipal CARES Act funds has two components. The first is based on the state’s community assistance formula, which is tied to population. The second is 75% of a community’s 2019 tax revenue, excluding property taxes.