HEDC proposes job creation program, asks feds for more money

 

April 23, 2020



The Haines Economic Development Corporation is taking steps to address the economic fallout of COVID-19. At a meeting last week, board members approved several recommendations for assembly consideration, including a summer job creation program.

Every year, the borough hires seasonal employees in the public works department to do projects like park maintenance and trail development in exchange for roughly $20 an hour, HEDC executive director Margaret Friedenauer said. The recommendation HEDC forwarded is that the borough use roughly $200,000 from the leftover fund balance in the capital improvements budget to hire a larger seasonal workforce this year. The program would offer employment for locals in need of summer jobs, and a larger workforce would allow the borough to take on more involved projects that are harder to do in normal years when the town is full of visitors.

At the meeting, board members raised the question of whether the hourly pay would be enough to attract workers given recent increases in unemployment benefits.

Friedenauer said the motivation behind the program is not just to give people money but to give them a way to earn it. The program would create a structure for people to receive compensation in exchange for contributing to their community.

At the same meeting, the HEDC board authorized Friedenauer to send a letter to Alaska’s federal delegation advocating for more robust funding for seasonal businesses through the Economic Injury Disaster Loan (EIDL) program.

The Small Business Administration recently announced that it has stopped accepting applications for both the EIDL and the Paycheck Protection Program (PPP), two programs offering economic assistance to businesses impacted by COVID-19. The SBA will not accept new applications until the federal government approves more stimulus funding. 


The PPP is a forgivable loan designed to cover eight weeks of expenses including payroll, rent and utilities. If a business uses the money for these expenses, the loan will be forgiven. If not, the PPP funds remain a loan due in two years. The PPP received roughly $349 billion in funding from the federal government through the CARES Act.

The HEDC letter, addressed to Sen. Lisa Murkowski and dated April 20, explains that while the PPP is helpful for many businesses struggling to keep workers on payroll in the short-term, it is not well-suited for seasonal businesses.

Because of the timing of the outbreak, many operators are “having to refund money that may or may not have already been spent gearing up for the season,” Alaska Mountain Guides owner and HEDC member Sean Gaffney said at the meeting. Businesses in this situation would likely not qualify for the PPP as a forgivable loan, he said.  


The EIDL, a loan program that existed before the CARES Act and received $10 billion in funding through the bill, is a more long-term loan. Its structure, with a term of up to 30 years, makes it better suited for seasonal businesses that weren’t in full operation this winter and may not be up and running again for over a year, Gaffney said.

Alaska has a seasonal economy that is unique among states, Gaffney said. Because of this, it is imperative that Alaska’s federal delegation advocate for more funding for the EIDL program. 

Other economic considerations raised at the HEDC meeting included the possibility of taking advantage of incredibly low bond rates by bonding for larger borough projects like the restoration of Lutak Dock, and the question of whether there exists public support for accessing the Haines permanent fund this year given the borough’s unprecedented fiscal situation. Members voted to forward these questions to the assembly for consideration.

The HEDC board also voted to create a food security task force headed by member Sue Chasen with the goal of addressing long-term food security questions.

Recommendations passed at the HEDC meeting will go before the assembly at its meeting on April 28.

 
 

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