Anchorage will get an estimated $100 million in new COVID-19 relief funds. Now officials must decide what to do with it.

Update, 7 p.m. Wednesday:

The Assembly’s special meeting planned for Thursday to introduce a resolution to allocate initial federal relief funds has been postponed and will be rescheduled, according to an emailed statement from Assembly Chair Felix Rivera.

The city is still waiting on information from the Department of the Treasury, which has not yet confirmed the exact dollar amount Anchorage will receive.

Original story:

Anchorage will soon get a hefty infusion of money from the federal government through the most recent COVID-19 aid bill, the American Rescue Plan.

City officials aren’t yet sure exactly how much Anchorage will get, but the estimate as of Friday was “just north of $101 million,” Jason Bockenstedt, the acting mayor’s chief of staff, told Assembly members.

City officials are working to figure out the details of how the municipality can spend the money according to the bill’s stipulations, and what should be done with it.

The $1.9 trillion American Rescue Plan includes a host of federal relief programs and money for the state too.

But right now, the city doesn’t know what — or how much — state and federal resources will also be available to Anchorage residents through the relief bill.

Many Assembly members say they want to fill in the gaps between federal and state resources and get money out to the people and businesses that need it as quickly as possible.

And some members want to get that money out in a way that avoids the kind of controversy that arose when the city gave out CARES Act funds last year.

[Alaska will get a massive injection of money from the COVID-19 aid bill. Here’s where it’ll go.]

Here’s what we know so far.

How much is Anchorage getting, and when will the money be disbursed?

The mayor’s office is waiting to hear from the U.S. Department of the Treasury on the final amount that Anchorage will get. Bockenstedt on Friday said that while the city thinks $101 million is a close estimate, it could change.

The total amount will be given to the city in two chunks. The first half should arrive within 60 days of when the relief package was enacted, Bockenstedt said. President Joe Biden signed the legislation on March 11.

The city will get the second half no sooner than 12 months later. So if it gets the first half of the $101 million in April, then in April 2022 it can get the second half.

The city should be poised to give out some funds in an “initial allocation” as soon as it gets the money, said Assembly Chair Felix Rivera.

That means the city wants to get a chunk of money out right away, and will have more money to use later in the year.

The administration of Acting Mayor Austin Quinn-Davidson will hopefully know the final dollar amount on Thursday, Rivera said.

The acting mayor’s office will then submit a proposal as a resolution to the Assembly on how it wants to spend the first portion of the money. Rivera said he hopes to receive that resolution Thursday, and the Assembly will take it up for introduction at a special meeting that evening.

The goal is for the Assembly to vote on that resolution on Tuesday, Rivera said. The Assembly can make amendments to the resolution and change how the money will be used, and how much is spent in the initial allocation.

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The proposal from the mayor’s office could include more money for small businesses, nonprofits, renters or other programs that the city stood up over the last year using CARES Act funds. The city could also start some new programs, or make changes to current ones.

What can the money be used for? How is it different from the CARES Act?

Guidance for how the money can be used is still being hashed out at the federal level.

“There is going to be a ton of federal guidance that is written not only by the Treasury Department but a lot of other federal agencies over the coming weeks that will further inform our understanding of this legislation,” Bockenstedt said.

But the legislation does lay out some specific intents for the funds. They can be used to:

• Respond to the COVID-19 public health emergency and its negative economic impacts.

• Provide premium pay for people performing essential work during the COVID-19 public health emergency, or grants to employers who have people doing that essential work.

• Make up for reductions in the city’s revenue due to the public health emergency, in order to provide government services.

• Make necessary investments in water, sewer or broadband infrastructure.

The requirements of the American Relief Plan are much more flexible than the CARES Act, Bockenstedt said.

“My understanding is that the Treasury Department will again read these in a very flexible way that allows local governments to respond best to the situation in their community,” he said.

What programs will the money go to? And how will the city decide?

The Assembly is reviewing some of the previous spending of its $156.7 million from the CARES Act. Members say that’s to help it decide what programs are working, which new programs Anchorage might need and which of the city’s businesses, residents and organizations are hurting most.

City officials say they also need to consider which state and federal programs will be helping with the city’s needs. For example, the federal government is standing up a $28.6 billion Restaurant Revitalization Fund that will provide grants to restaurants, targeting smaller mom-and-pop establishments nationwide. It’s also rolling out a mortgage assistance fund to help homeowners.

“We’re in a whole different ballgame right now, just in terms of how the feds are going to allocate the funds and what actually comes directly to us,” Assembly member Crystal Kennedy said.

Kennedy and several other Assembly members said they would prioritize stabilizing the economy, small businesses and the tourism industry.

Kennedy and Assembly member Meg Zaletel both said the Assembly will also need to focus on transitioning out of using the congregate homeless shelter at the Sullivan Arena, which the city created as an emergency shelter during the pandemic.

Data and testimony presented to the Assembly on Friday show that the city’s needs are deep, and the pandemic’s economic effects will be ongoing for years.

“The need is bottomless,” Julie Saupe, president and CEO of Visit Anchorage, told the Assembly on Friday. Saupe testified about Anchorage’s tourism relief grants.

Saupe said that the industry is looking at 2024 and beyond for a full recovery.

[Alaska’s tourism businesses see reasons for hope in 2021 — even without the cruise ships]

Gabe Layman, Chief Operating Officer for Cook Inlet Housing Authority, said that there has been “very dramatic need” for the city’s program giving grants to small businesses.

“As of today, we have almost 1,000 small businesses still remaining on our waiting list,” he said.

Some Assembly members said they would like to see at least half or all of the waitlist cleared in the first round of funding. That would take about $9.8 million, Layman said.

“It’s a nice chunk of money,” Bill Popp, president and CEO of the Anchorage Economic Development Corp., said of the coming American Relief Plan funds. “But in the greater consequences of what is going on in our state and our city, you’re going to have to be very targeted in thinking about how you’re going to spend these funds — because they’re not going to go very far.”

How did the city spend relief money last year?

The Assembly, over the course of last year, approved several rounds of spending for its $156.7 million in CARES Act funds.

This money went to a wide swath of programs, including rental and mortgage relief and multiple rounds of grants for the hospitality industry, the tourism industry and small businesses. The city also used some money for various jobs programs and gave grants to “cultural pillars” such as the Alaska Native Heritage Center and the Anchorage Museum.

[Federal government approves nearly $50M in pandemic aid for Alaska’s fishing industry]

The city provided a spreadsheet of its CARES Act allocations to the Assembly that is accurate as of March 12, according to Bockenstedt. Some of the money is still being spent. As of March 12, there was about $17 million still being given out through ongoing programs.

At a Friday meeting, some Assembly members said they want to try to avoid further tension in the community over how this next round of relief funding is spent. Controversy arose when the city proposed spending some CARES Act funds on purchasing three buildings for homeless and treatment services.

It prompted protests and lengthy testimony in the Assembly chambers from residents worried that their neighborhoods would be negatively affected and residents who said that the funds should have been used only for economic relief.

The Assembly eventually approved spending $12.5 million — about 8% of its total CARES Act funds — on the project.

After receiving citizen complaints about the Assembly’s plan, the U.S. Department of the Treasury’s Office of Inspector General intervened to review the use of the funds.

It then referred the city to the office of the U.S. Department of the Treasury’s secretary, which gave the Assembly two options. It could use the CARES Act funds for building purchases, but the funds would have to be spent by the Dec. 31 deadline laid out in the legislation. It could also spend the $12.5 million on first responder payroll instead, and use money that would have gone to that payroll from the city’s general fund for the building purchases.

The city chose that more flexible route, and paid for some of the other relief programs the same way, Bockenstedt said.

The single biggest total expense of the CARES Act funds, $23 million, went to first responder payroll.

None of the three buildings have been purchased with the CARES Act funds to date.

The Assembly will hold another public work session and town hall on the American Relief Plan on Friday at 5 p.m.

Correction: A previous version of the story incorrectly said that the U.S. Department of the Treasury’s Office of Inspector General declared the use of the CARES funds ineligible and gave the city two options to use the funds for the building purchases. It referred the city to the office of the U.S. Department of the Treasury’s secretary, which then gave the city the options.