CARES Act money is coming, but use is still unclear

Exactly how the money can be used may change

Federal relief funds from the CARES Act are on their way.

The Legislative Budget and Audit Committee on Monday approved Gov. Mike Dunleavy’s proposal for distributing the coronavirus relief money.

But how that mostly federal money will be able to be used is still an open question. Additional guidance on how to spend the funds has been issued by the U.S. Department of the Treasury, City and Borough of Juneau Manager Rorie Watt said, but there were still ambiguities within that guidance.

The City and Borough of Juneau Assembly Finance Committee will discuss eligible use of the funds at its Wednesday meeting, Watt said, and he had already prepared a memo to detail some of the issues with the federal guidance.

“The Guidance says that funding can be used to meet payroll expenses for public safety, public health, health care, human services and similar employees whose services are substantially dedicated to mitigating or responding to the COVID-19 public health emergency,” Watt wrote in the memo. “How does a government determine whether payroll expenses for a given employee satisfy the ‘substantially dedicated’ condition?”

[Legislative committee agrees to plans for coronavirus aid]

Before money can be received, municipalities have to sign and return a compliance letter to the governor’s office, according to Jeff Turner, deputy director of communications for Dunleavy.

“Compliance letters are still being drafted by the Department of Law and not all the details have been finalized,” said Glenn Hoskinson, special assistant to the commissioner at the Department of Commerce, Community and Economic Development, who answered a question on behalf of the governor’s office.

City leaders across the state have said that without the ability to use federal funds to make up for lost revenue there would have to be massive cuts to services. However, Senators in Washington, D.C., including both of Alaska’s Republican Sens. Lisa Murkowski and Dan Sullivan, have introduced legislation which would expand the use of CARES Act funding to include lost revenue.

“We believe this legislation is fairly likely to pass, which would significantly broaden the scope eligible uses,” Watt wrote in the memo. “However, uncertainty rules the day.”

Hoskinson said once the letters are drafted they could be signed and returned electronically, but a date for the letters’ release has not been set.

There are some areas where the use of federal funds is clearly permitted, Watt said, such as rental assistance, small business loan programs and payroll for essential city personnel such as police officers and fire fighters.

Contact reporter Peter Segall at Follow him on Twitter at @SegallJnoEmpire.