GUEST COMMENTARY: Time needed to ensure best use of CARES Act funds
It’s too early to ask where CARES Act funding has gone, or what impact it has had. We know the various priorities it was allocated to, each at various stages now in their distribution. What’s been common across implementation is that it takes time to design effective programs and ensure that funds meet Alaskans’ needs.
That’s where most Alaska municipalities are: reviewing grant agreements and budgets, developing a common-sense plan to appropriately manage this federal assistance, and listening to local businesses and residents to learn where priorities lie.
Taking on $568 million in liability is not something that local governments do lightly. There is a clear understanding that until everyone has worked through what is allowable and then what is necessary there cannot be action. Ultimately, there can’t be quick action when local governments are working carefully through federal and state restrictions on how funds can be spent.
So where is local government CARES Act funding? Right now, the state has distributed about a fifth of it — and expect as much as half very soon — to nearly 100 local governments. Those local governments are very often placing these funds in separate accounts to ensure proper accounting; they are implementing separate accounting to track expenditures.
Local governments are acting as good stewards, ensuring that they can report back to the state, federal government, and ultimately Alaskans, that these funds have been carefully managed.
While it may not seem like there is quick action, there is definitely action. And it’s really kind of exciting to see cities and boroughs stand up to this challenge. What makes implementation of the CARES Act funding different than other types of funding is that much of it can’t simply help local governments meet their own needs.
Those needs during the public health crisis include significant lost revenues, which isn’t an allowable expenditure. They are able to use these funds on some limited items that will help with public health and safety, and measures that help with mitigating the spread of coronavirus.
This means that for the remainder of the funds, local governments are determining how to meet community needs. We know that many businesses are struggling or at risk of failing, an increased number of residents may be unemployed or furloughed, nonprofits may have been limited in their operations or expanded them; hospitals, schools, the university and so many other essential community assets have been impacted.
Municipal officials are assessing these impacts and developing processes to distribute funds in support of keeping the lights on, at least. It’s also a time to invest in programs like childcare, food and support for vulnerable populations.
Across the state we’re seeing innovative programs that are new and different to many local governments. An estimated 40 cities and boroughs will implement some kind of grant program, redistributing their funds to businesses, nonprofits, and other organizations in the community. As many as 100 more may be considering ways to help offset utility bills, providing subsidies to residents to maintain water, sewer, and electric connections.
Some may be looking at working with AHFC or offering their own rent and mortgage relief programs. Municipalities are assessing barriers to reopening, including childcare, and looking at how to provide funds for those operations.
There are discussions of providing incentives for face coverings, testing, and other public health compliance. Public facilities may undergo transformations so that they can operate and ensure community members can stay safe; that includes pools, community centers, city halls, and libraries. Communities may need to build or purchase facilities for quarantine or emergency operations.
Yes, these will all take time to implement. But local governments are moving decisively to meet the immediate needs of residents and the overall interests of communities. It’s also true that the public health emergency isn’t over; many are preparing to be able to meet additional needs over the course of this year.
There’s a common acknowledgement that while CARES Act funds won’t meet all the needs of local governments and their budgets, right now the priority is to leverage these funds in a way to meet the needs of communities. Keeping communities whole during this crisis — businesses operational, services provided, residents employed, families supported — is how we’ll measure success.
Nils Andreassen is the Executive Director of the Alaska Municipal League, a service organization for 165 city and borough members. AML’s mission is to strengthen local governments. He is also a member of the Juneau Downtown Rotary, a board member of Commonwealth North, and a Commissioner at the Denali Commission.