10 Of 98 CARES Act Grant Applications Denied By City Of Unalaska

Aug 7, 2020

 

City councilors are scheduled to discuss the CARES Act and address any concerns and/or appeals at their meeting on Aug. 11.
Credit Hope McKenney/KUCB

The City of Unalaska has processed 98 applications from local businesses and nonprofits for CARES Act funding. 

In late May, city councilors unanimously authorized the city to sign a grant agreement with the State of Alaska to accept more than $13 million to help mitigate the impact on local communities, businesses, and nonprofit organizations that have or will be affected by the COVID-19 pandemic. The funding comes from the federal Coronavirus Aid, Relief, and Economic Security Act — or CARES Act — but passes through the state. Unalaska has received more than $5.4 million thus far, but must spend at least 80 percent of that first installment in order to receive the second disbursement.

Out of a total of 98 applications from local businesses considered essential and non-essential, as well as 11 community nonprofits, 10 applicants were denied, according to Bil Homka, director of Unalaska's Planning Department. Those 10 applications amounted to a total of more than $3.6 million in requested aid. 

One local business applicant was denied because they didn't have a city business license issued prior to the City Council's deadline of March 12 — which is when the city opened its Emergency Operations Center in response to the coronavirus, according to Homka. Five applicants were denied because they are new businesses and had no tax return or prior income to calculate aid based on the city's funding formula. Two businesses submitted applications past the noon deadline on July 24, and two applicants (one business and one nonprofit) were denied because they are not in the scope of the CARES Act, Homka said.

"Our office was given somewhat stringent formulas that you either fit into or you don't," he said. "We had two applicants that applied late. We have one application from the [International Longshore and Warehouse Union Unit 223] that was denied, because even though it's a nonprofit, it's not a charitable type of organization. And the other problem that we had is if [a business] did not have any kind of income in 2018 or 2019, we had nothing to use in the formula. So those folks were denied."

The City Council voted last month to allocate 40 percent of the city's share of CARES Act funding to grants to support local businesses and nonprofits, 50 percent towards the city's response and prevention of the coronavirus, and the remaining 10 percent to be set aside to use for grants, should the need arise.

In total, the city approved more than $5 million in aid for 88 applicants, $900,000 of which is for 11 nonprofits, which were granted their requested amounts in full. 

While the council directly approved or denied the requested amounts from nonprofit organizations, for businesses, the Planning Department directly calculated their aid amounts by entering applicants' past gross income into the council's funding formulas. The formulas differ for non-essential businesses, which were mandated to close for approximately 80 days after the pandemic hit Alaska in March, and essential businesses that were impacted but remained open.  

The allocation process, according to Homka, has been complicated and lengthy, largely because a grant like the CARES Act has not been issued before. He also noted that the government doesn't consider some of the convoluted business models unique to Alaska, which makes granting funds even more complex.

"There has been some back and forth because I think we have some unique businesses out here, and how do they fit with the state mandate? Is it essential or non-essential? And I think some people — even though they feel they're essential or non-essential, they don't fit that description by the state," Homka said. "And so there's some confusion amongst a few businesses where they've definitely felt impacted, I mean, everyone has been impacted, but we're kind of bound by what the council has set forth in its resolutions."

The City Council allocated $5,381,580.80 (40%) of Unalaska's CARES Act money for use in the grant program for local businesses and nonprofits. Thus far, the city's CARES Act Grant Program has awarded a total of $5,072,066.39 per council directives and formulas.  

Councilors are scheduled to discuss the CARES Act and address any concerns and/or appeals at their meeting on Aug. 11.