CARES Act money will begin to flow from the Kodiak Island Borough, after the assembly voted on an allocation Thursday night.
Of the total, $1.2 million will go to the borough itself, $1.57 million to the school system, $1 million to the Kodiak Economic Development Corporation to distribute to local businesses, $500,000 to nonprofits, and $1.5 million will be held in reserve.
The breakdown changed at Thursday night’s meeting from the first proposal given to the assembly by Borough Manager Michael Powers. Originally, nonprofits were slated to get $1 million, and $1 million was to be held in reserve.
But there were concerns among the assembly that $1 million was too little in reserve.
Part of the issue is there are rules from the federal government about what this money can and cannot be used for. As of today, it must be used for expenses incurred due to the COVID-19 pandemic between March 27 and Dec. 30 that were not previously budgeted.
This means the assembly cannot use the funds to do things it might most want to do, like help pay down debt and keep taxes lower. Assembly Member Scott Arndt said he thought the rules might change in the future and thus wanted to keep more in reserve.
“Here we are just two weeks into our fiscal year and we’re going to spend all but $1 million. I can’t buy into that,” Arndt said. “I would rather wait and see if things change, because we’re looking at raising taxes on people.”
Borough Mayor Bill Roberts and Assembly Member Rebecca Skinner were more skeptical. Their concern was that the borough would not be able to spend the money quickly enough before it expires in December. Some of the things it’s going to pay for, like touchless sinks and toilets in the borough building and school, are in very high demand right now and have significant labor involved.
“We quite frankly need to get off the dime and spend this money or we’re going to have a hard time doing so,” Powers said.
The assembly will also be able to alter the breakdown in the future.
“I think this is just the initial cut. We need to just move this forward,” Assembly Member Duane Dvorak said.
The compromise the group eventually reached was dropping the nonprofit number to beef up the reserves.
“There’s probably not going to be a million dollars of nonprofit requests. I think $500,000 is more reasonable, and that allows that $500,000 to go to reserve,” Skinner said. “I have not heard any traction on the CARES Act rules changing and I think we need to get this money out.”
Ardnt made the motion to amend the allocation as Skinner described. He, Skinner, Dvorak and Dennis Symmons voted for the amendment. Assembly members Julie Kavanaugh and Andy Schroeder advocated for keeping the $1 million in the nonprofit bucket and voted no.
Following the amendment vote, the CARES Act money allocation resolution passed 4-2, with Kavanaugh, Skinner, Dvorak and Schroeder in favor, and Arndt and Simmons opposed.
Thursday night’s agenda was especially full, and the assembly did not make it through everything before adjourning at 11 p.m. The body will reconvene tonight at 6:30 p.m. to finish.