City holds work session on spending of CARES Act funds

On March 27 of this year Congress passed the Coronavirus Aid, Relief, and Economic Security Act, known as the CARES Act. The idea was to fund state agencies stressed by the economic impact of the Covid-19 pandemic. Governor Dunleavy announced receipt of the funds on April 21 and detailed his plan for the distribution of the money. “This money will go directly where it is needed most into the hands of local communities, small businesses, and non-profits,” said Governor Dunleavy. “My administration stands ready to distribute these needed funds immediately to help mitigate the impacts of COVID-19 in Alaska.”

Nome’s share of the money works out to $5,679,072. The city council has proposed several areas where the money will go and asked the public for input. At Nome Common Council work session on June 16, the public got a chance to weigh in on where the funds will be best spent.

The U.S. Treasury Department stipulates the money can’t be spent on programs which were already budgeted before the pandemic hit. But it can be spent on costs for public safety and health. In many Alaska boroughs and cities the police budget is the biggest item.

“What we have in the plan is salaries which are eligible for coverage,” said Nome City Manager Glenn Steckman, speaking of the proposed list of expenditures. “Unlike many federal loans, they have said anything we spend for police or EMS services is 100 percent covered. That helps to offset other shortages the city may see.” With the police budget covered for the entire year the city has more money to spend elsewhere on items not covered by the CARES grant. “Obviously, this virus has impacted the city in so many ways. Whether it’s services, or people delaying to come to Nome, we will still be able to provide full police and medical services so we don’t have to reduce those because of cutbacks in revenues.”

The reduction in city revenues is significant because of the virus. Monthly sales tax revenue loss is running around $50,000. The city council dropped the extra two percent sales tax charged during the summer tourist season to remove some of the burden from the local tax payer. This season the tourism season took a big hit in Nome. “So for the three months June, July and August we’re going to see a loss of at least $540,000 in sales tax revenue,” said Steckman. “The city is trying to avoid digging deep into its reserves while we’re experiencing this pandemic.” According to latest public health information the pandemic could be around well into next year.

Nearly half of the relief funding is proposed to go to salaries eligible under the grant guidelines. Another Council work session to gather public input was scheduled for Wednesday, June 24.