The Haines Borough has been awarded a million dollars in federal money for childcare, but some say spending restrictions may prevent it from addressing the most pressing childcare needs.

The funding has been specifically granted for an “early childhood education building,” according to an April 28 letter to the borough from the United States Department of Housing and Urban Development. The funding was provided through the federal earmark process, where requests are made to members of the congressional delegation — in this case Senator Lisa Murkowski — who then may decide to advocate for the requests in federal budgeting.

The award follows months of discussion about how to address a childcare shortage in the Chilkat Valley.

The original earmark request was made in February 2025, mayor Tom Morphet said, soon after he got the idea from regional childcare expert Blue Shibler. Because the deadline to request funds was only a week after his conversation with Shibler, Morphet said, the request did not go before the borough assembly.

Elected officials, local providers, and experts like Shibler have all described challenging economics of childcare, with revenue unable to keep up with rising costs of staffing and permitting requirements.

In theory, the new million dollars should be a boon: it dwarfs the amount of money the borough currently has to support childcare businesses, with the assembly spending hours this winter discussing a $17,000 injection of cash to local providers.

Mayor Tom Morphet said the million dollar award could fill a need for more space. That’s half of a two-part equation — “more cash and more room,” he said — for increasing total childcare slots.

Morphet’s ideas for the money included refurbishing the current SEARHC clinic as a Haines Borough School District-run childcare facility, or partnering with the Chilkoot Indian Association to refurbish a CIA-owned building on Main Street as a general community childcare center.

There’s disagreement about whether those ideas are possible, and if so, whether they would be effective. On the intergovernmental partnership, Morphet said CIA officials had discussed the idea with borough officials and had “expressed interest,” but didn’t have the money for the project. Those discussions, he said, served as the main impetus for the funding request.

Sheri Loomis, who had been a part of a working group on childcare in the Chilkat Valley, said the partnership idea had been discussed by the working group and the mayor. But it was her understanding that there was confusion over whether the grant, as it had been received, could fund such a partnership. oMorphet this week maintained that the grant could be used for those purposes, and said he believed the grant language “was pretty broadly worded.”

But in a statement Tuesday, CIA tribal administrator Harriet Brouillette wrote that “the grantor does not allow the funds to be ‘passed through’ to another organization.’”

“The mayor may have found a way around that provision,” Brouillette added.

Brouillette also said that CIA has partnered with the borough on a grant to fund childcare planning meetings in June, but “has no formal agreement beyond that.”

Borough staff seem to have less clarity than either Brouillette or Morphet.

At an April assembly meeting, assembly member Eben Sargent asked borough staff about what kinds of limitations were on the funds — whether they were limited only to constructing a new facility or whether they could be used more broadly.

“I’m hopeful that we don’t have to build anything new, and we can use it for at least maintenance on a building. I’d love to use it for childcare services, like funding salaries, because that’s the need,” Sargent said.

Assembly member Alekka Fullerton responded that the limitations on the funds wouldn’t be clear until the borough received a grant agreement.

In an interview this week Fullerton said the borough still needs to officially apply for the funds even though they’ve been awarded, and that the grant agreement wouldn’t come until that application was approved. Fullerton said she did not know the deadline for the application.

As for whether new facilities would be an effective solution to the childcare shortage, Chilkat Valley Preschool executive director Tammy Iund said she had “real frustration when the discovery was made that the million dollars was for a building and not for the logistics of helping create childcare opportunities.”

The current shortage, as it’s been described, has a specific chokepoint. Chilkat Valley Preschool in fact has been suffering from low enrollment, not overenrollment, at the 3-7 year-old age range it currently serves. The preschool has had no more than 9 students enrolled this year, even though it has capacity for up to 18, Iund said.

Rather, many, including both Morphet and Iund, say the shortage lies in care for babies and toddlers, which requires different licensing and facilities than the preschool currently has.

The preschool is currently “pivoting,” Iund said, to providing that care, including acquiring the new licensing and required equipment. Supplementing the costs of those changes, as well as general startup costs for new providers, would be a more effective use of funds, she said.

All the different parties on the issue, including borough officials, CIA officials, and providers like Lund, are set to come together during the June meetings jointly hosted by the two governments.

While there may be disagreement now, there’s hope that those meetings will offer some path forward. Morphet said he sees those meetings as a time to decide how to use the million dollar grant.

“That’s going to be a topic of the meetings in June, seeing if we can get everyone on the same page for how to spend that money,” he said

Iund said something similar. “I do appreciate all the support from the borough,” she said. “Everyone’s working hard on this problem, we just have to figure out some way to come together and get consensus.”