Alaska cities and boroughs are still figuring out how to spend the $569 million in federal CARES Act funding coming their way from the state — with municipalities all doing it a little differently.

Or a lot differently.

Whereas the most a Haines business or nonprofit can receive from the borough’s CARES Act grants program is $10,000, Ketchikan is offering up to $20,000 each for nonprofits and $25,000 for businesses, Petersburg has a $25,000 maximum for its nonprofits, and Juneau businesses and nonprofits may qualify for as much as $99,000 each.

It’s up to each city and borough to decide how to allocate its funding, within guidelines developed by the U.S. Treasury Department following congressional passage of the $2 trillion appropriation. The state added few additional restrictions as it shared almost half of its $1.25 billion with cities and boroughs.

Governments may not use the money to replace tax revenue lost from the economic shutdown caused by the COVID-19 public health emergency, but they can use it for expenses related to the emergency, such as police and fire payroll, and they can distribute the money to businesses, nonprofits and individuals hit by the economic shutdown.

The Skagway borough assembly voted to distribute most of that community’s CARES Act money to individuals, at the rate of $1,000 per resident per month through December. The first checks went out June 26. That same day, lines formed outside the post office and Skagway’s only bank as residents collected their first payment.

Borough treasurer Heather Rodig said 899 individuals were approved for the June checks, about 199 more than anticipated. The municipality had expected about 700 individuals to apply, based on the number who applied for a borough-funded emergency assistance program in April that gave $400 to each adult and $200 to each dependent.

“You start talking $1,000, that’s an incentive,” borough manager Ryan told The Skagway News.

Ryan said he considers the first month of distributing CARES Act funds directly to residents a success.

“I hear people talk about the spending that happened right after,” Ryan said. He believes the money will help local businesses and “offset people’s mental burdens.”

But the higher-than-expected turnout for the first checks put a strain on the anticipated budget for the program. After distributing a second payment of $1,000 in July, the municipality will scale back the check to $500 for August, Ryan said July 6. It plans to return to the full $1,000 in September.

It will be easier to afford the full $1,000 for September through December as some residents will head south for the winter, Ryan said. Applicants must apply each month and be living in town to continue receiving the checks.

To ensure they are living in town, the borough will require starting in August that people pick up their checks at city hall instead of getting them in the mail, Ryan said. The borough will set up a day and time for people to come by and get their checks with safe social distancing.

Skagway’s $1,000 checks are unique in Alaska. “I don’t know of anyone else with as broad an approach,” Nils Andreassen, executive director of the Alaska Municipal League, said in an email July 6. “Most are focused on distribution through utility accounts in smaller communities. That might have the same effect, but isn’t just cash.”

Sitka, for example, established a utility subsidy program with some of its CARES Act money, providing a one-time credit of up to $1,000 per residential account and up to $3,000 for each business utility account.

The Sitka assembly approved spending $4.5 million of its $14 million in CARES Act funding on the utility subsidies, along with subsidies for boat moorage fees. It plans to distribute $5 million as grants to businesses and nonprofits.

Skagway received $7.4 million in CARES Act funding, half as much as Sitka, which has more than seven times the population. The state’s allocation formula was heavily weighted to sales tax revenues, where Skagway excels. The community collected more than $9 million last year from sales taxes versus $13 million in Sitka.

Haines collected about $660,000 last year in sales and lodging taxes. Its allocation under the state CARES Act funding is $4 million, with some going to ambulance services and other expenses, in addition to its grant program.

In Skagway’s case, the more funds that are used for direct individual payments, the less that will be available for a business grant program being put together by the assembly Finance Committee.

If the municipality receives close to the same number of applications for the individual grants through to the end of the year, the program could consume more than two-thirds of the $7.4 million in CARES Act money that Skagway has to spend.

The town’s economic development organization, the Skagway Development Corp. (SDC), had asked the assembly for $2.5 million for businesses. The current plan awards them $1 million, with the hope of more funds in the future.

Beth Smith, who owns Station Bar & Grill, Happy Endings Saloon and Morning Wood Hotel in Skagway, said it “feels a little lonely” to be a business owner. “Neglected,” Smith said. “I’ve talked to a lot of people and that word has come up quite frequently.”

Smith is advocating for the municipality to award the full $2.5 million requested by SDC. Smith noted that individuals can get unemployment but none of the federal aid programs were designed for Skagway’s unique business model, where year-round businesses stay open off-season at a loss.

Mayor Andrew Cremata said the municipality is working hard to aid businesses and is especially concerned about the few businesses that stay open during the winter, but said there is a limited amount of money.

“There’s no way to make up for the $160 million we lost this summer,” Cremata said of the spending that disappeared with cancellation of this year’s 1 million cruise ship passengers.

The $1,000 monthly payments are available to anyone who lived in Skagway as a permanent resident as of June 4 and can show economic harm from the public health emergency and its economic consequences. Applicants have to provide receipts or invoices to show they need the money, such as for rent or mortgage payments, utilities, insurance, groceries — as well as spending that stimulates the local economy, such as spending at restaurants.

Kelly Jennings, who works at Skagway Hardware and has two children, lost a large portion of her family’s annual income when her husband had to suspend his tour company for the season. “This is how we will afford to stay in our beautiful town,” Jennings said. “I am beyond grateful.”

The two-page application makes clear: “The purpose of the program is to assist residents with the means to meet financial obligations and remain in Skagway through the upcoming winter.”

-With reporting by Melinda Munson of The Skagway News