Through the CARES Act, municipalities are receiving millions of dollars to help recover from the COVID-19 pandemic.
But governments can only use the money for direct costs related to COVID-19, like paying emergency responders or buying protective equipment. In Alaska, the biggest economic hit to local governments has been lost revenue, primarily a drop in sales taxes, which isn't an eligible use of CARES money. Cities and boroughs can’t use most of the money they’re being given.
So, municipalities are coming up with ways to pass CARES Act money on to their communities. The city of Kenai has developed a grant program that is becoming a template for other municipalities in the state.
The Kenai City Council approved the program at its meeting June 3.
“One of the things we really focused on is what is the intent of this money,” said City Manager Paul Ostrander. “So we went back to the original CARES Act intent language and it essentially says they wanted immediate support for business and individuals to help the country in its economy resiliency. So it was about getting the money out quickly and it was about going to businesses and to individuals.”
Of the $7.7 million coming to Kenai, the city’s plan is to distribute a little under $1 million to nonprofits providing direct assistance to Kenai residents. Another million will be spent on capital projects meant to mitigate the impacts of COVID-19. The city will keep $2.5 million for emergency response costs and $300,000 for direct COVID expenses.
The remaining $3 million will be divvied out as grants to small businesses and nonprofits. Grant amounts range from $2,500 to $10,000 for businesses, depending on their gross sales in 2019. Nonprofits could get up to $50,000, based on their annual income.
“This money should be used for businesses that potentially won’t make it through this public health crisis. So, those businesses that may have to close their doors because of this,” Ostrander said. “A $10,000 or even a $2,500 grant for some of these might be the difference to allow them to bridge that gap. And our focus really has been, ‘How can we make sure, when we’re at the end of this, when this country eventually comes out of COVID-19, how can we assure, to the best of our ability, that our tax base will be close to what it was before we when entered this?’”
Businesses have to be in Kenai and nonprofits have to provide services here to be eligible. There are a couple of other stipulations but for the most part, it’s a quick and easy application process. Be aware, though, that recipients of city grants might not be eligible for other state and federal aid programs.
The grant application period opened June 5. The deadline to apply is June 19. The city plans to get checks out the door by June 30 and could end up putting more money in the grant program depending on how many applications they get.
“If it’s obvious that there is significant additional needs for our small businesses in town, council could make the decision at that point to move money back into this bucket and have a second grant program that would provide additional funding for small business,” Ostrander said.
For more information on the grant program and application forms, visit kenai.city. Or call Larry Persily at 283-8226.