Small businesses in Kodiak that have been financially impacted by the coronavirus pandemic could soon be eligible for grant funds from the city. 

The grants would come from the $11.9 million Coronavirus Aid, Relief, and Economic Security Act funding that was awarded to the city of Kodiak. 

This comes at a critical time when, according to a survey conducted by the Kodiak Chamber of Commerce, 6% of local businesses reported that they would be forced to close by June 30 if they did not receive help with funding. 

“We've got direct feedback through surveys that Paycheck Protection Program money and some of the other Economic Injury Disaster Loan funds will run out by June,” said Councilor John Whiddon at a city council work session on Tuesday. He also sits on the Kodiak Economic Task Force. 

Funding for the PPP and the EIDL was made available through the CARES Act, but multiple rounds of funding for the loans have run out. PPP funding is still available for small business owners. 

According to the office of Sen. Dan Sullivan (R-AK), the PPP had $109 billion left as of Tuesday. 

Whiddon said business owners use money from the loans to help cover mortgages, rent and payroll, among other costs. 

Kodiak’s grant program, spearheaded by the Kodiak Economic Task Force, would aim to help resuscitate the island's businesses. 

Saving the island's businesses is important because they improve the quality of life in Kodiak,  and those within city limits make up the city’s tax base, Whiddon said. 

Any locally owned business impacted by COVID-19 on the island could be eligible for grant funds, he said. 

“It could be a bed and breakfast, it could be a home daycare, it could be a bookshop, it could be a coffee shop,” he said, adding that fishing charter businesses, fishing companies and vessels, and nonprofits would also be included.

Whiddon requested $3.5 million for the grant program to provide between two and three rounds of funding to businesses. 

According to City Manager Mike Tvenge, before funds are allocated to the grant program, the city needs more concrete criteria for the expenditures allowed by the federal government as well an assessment of the city’s own needs.

City of Kodiak Mayor Pat Branson said grant amounts could range from $2,500 to $15,000 per business during the first round of funds, with amounts potentially increasing during subsequent rounds of disbursement.  

Unlike CARES Act loans, the grant program would not operate on a first-come, first-served basis. Applications would be evaluated based on criteria that are still being developed. 

To be eligible for funds, businesses would be required to fill out an application, prove that they have been in business since before March, and demonstrate an actual or projected loss of revenue. 

Whiddon suggested to the council that the application could include a hold agreement, which would exonerate the city if the businesses did not adhere to federal guidelines on how to spend the funds. 

The grant money would have to be paid back to the U.S. Department of Treasury if a judge found the funds were spent incorrectly. 

According to federal guidelines, CARES funds may be used to cover costs that are necessary expenditures incurred due to the public health emergency with respect to COVID–19. 

Funds could also be used for expenses that were not accounted for in the budget most recently approved as of March 27, the date of enactment of the CARES Act; or those that were incurred between  March 1 and Dec. 30. 

Whiddon said that to make the process as “blind” and equitable as possible, the evaluation committee, made up of five task force members, would receive the applications with the owner, the business name and the address redacted. 

The five members of the committee cover different sectors, from tourism and banking to fishing. 

The members include Whiddon; Sarah Phillips, the executive director of the Chamber of Commerce; Aimee Williams, the executive director of Discover Kodiak; Mark Anderson, the vice president and commercial loan officer of Northrim Bank; and James Turner, plant manager at Ocean Beauty Seafoods. 

The application would also include a non-disclosure agreement, meaning that any information shared with the task force would remain confidential. 

Whiddon said he hopes that as soon as the city receives the CARES Act funding, the task force can allocate the money to businesses.  

“We are hoping to have (grant) funds released by mid-June,” Whiddon said. 

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