Some much-needed federal dollars will be arriving soon in Sitka, but local officials remain uncertain where they’ll land.

City administrator John Leach said the city expects to receive the first distribution of federal coronavirus relief —  just over $3.6 million dollars — on May 1st. The federal government stipulates exactly how that money can be spent, and so far, Leach said it looked like making up for lost sales taxes doesn’t qualify. 

“We looked into this more today and we’re not finding a way for lost revenues to be covered by CARES Act money yet. There are a lot of different opinions on that right now and how the language reads,” he said. “It’s a little bit of a moving target, but as we understand now, it cannot be used for lost revenues.”

And that’s not the only federal money the city is anticipating. Around $450,000 in Secure Rural Schools funding should be coming in soon — for the current fiscal year. 

That money can only be spent on schools and roads. Traditionally the city splits it halfway between the city and the school district. But the federal funding isn’t always certain, and the city went several years without receiving the money, before the program was reauthorized in 2018.

The city has already budgeted to give half of next year’s Secure Rural Schools funding to the Sitka School District. But the 2020 round of funding was a bit of a surprise, said the head of Sitka’s Finance Department, Jay Sweeney.

“While we are budgeting for Secure Rural Schools for 21, this isn’t it, it’s 20 money. So the 20 money comes to the municipality, and it’s a general revenue of the municipality, in the general fund,” said Sweeney. “So if it is not expended, it simply passes in the general fund balance.”

Mayor Gary Paxton was interested in keeping the funds in the city’s reserves, but member Kevin Knox wanted to know if the school district had heard about the funding and included it in their FY21 budget, which had passed earlier that week. 

“If we aren’t going the route that we traditionally have in the past and what they’re assuming we are at this point, they’re going to have to go in and make an adjustment to their budget, then?” Knox asked. 

The school district at its April 22 meeting, had budgeted to include half of the FY20 SRS funds in the city’s contribution to the cap for the next year, around $222,000.

But Sweeney said the assembly would have to take additional action if they wanted the school district to have access to last year’s money for this year’s budget. 

Assembly members didn’t come to a consensus on the issue. So for now the money will roll into the general fund unless the assembly takes further action at a future meeting.

In other business, the Sitka Assembly… 

  • Approved the city’s general fund and enterprise fund budgets for FY21 on first reading. Read the story here.
  • Approved the payment of a $4.1 million fine to the Office of Inspector General Anti-Kickback Liability. It passed 4-2 with members Richard Wein and Valorie Nelson opposed, on second reading. Read previous reporting on the fine here
  • Approved an emergency ordinance to abate any penalties and interest for the first quarter sales tax 2020 filing period until June 30, 2020, 5-1 with assembly member Wein opposed, on first and final reading.
  • Approved the addition of the Alaska Remote Seller Sales Tax code to the Sitka General Code. The ordinance passed on second reading, 5-1 with member Nelson opposed.
  • Authorized the administrator to apply for and execute a grant with the “United States Fish and Wildlife Service for $36,000 to support the Peterson Storm Sewer Rehabilitation Project (6-0)
  • Approved a liquor license renewal for Sitka Moose Lodge (6-0) 
  • Approved a month-to-month lease between the city and Maris Inc for space at Sealing Cove parking lot on a 5-1 vote with member Wein opposed.
  • At its April 14th meeting, the assembly voted against appointing Anne Pollnow to a term on the historic preservation commission. At this meeting, the assembly failed to reverse the action taken at that meeting. The vote to rescind the action taken at the April 14 assembly meeting needed a supermajority to pass. It failed 4-2 with assembly members Paxton, Wein, Mosher and Christianson voting to rescind the action, with members Knox and Nelson opposed.
  • Unanimously passed the minutes from the previous April assembly meetings.