A press conference on Monday is scheduled for Mayor Ethan Berkowitz, who will discuss and defend the CARES Act funds and where his administration and liberal Assembly members are planning to allocate it. The press conference will come immediately after the mayor gives a presentation to the Anchorage Chamber of Commerce on the same topic.
The press conference will also feature Jason Bockenstedt, Berkowitz’ chief of staff; Chris Schutte, the Director of Economic and Community Development; Felix Rivera, Assembly Chair; and Austin Quinn-Davidson, Assembly Vice-Chair. The presser starts at 1 pm. No members of the public or press are allowed into the mayor’s conference room on the 8th floor of City Hall, per the orders of the Mayor. All will be watching on Facebook or Channel 9, and providing their questions by phone.
Assembly Chair Rivera is already on record saying the CARES Act money the city has been granted must be used to address racial inequality. The mayor is on record saying that the city may very well end up spending the CARES Act money on his homeless project because after the November election, Donald Trump may no longer be president.
Quinn-Davidson and Rivera are on record saying public testimony against the plan was racist.
The Inspector General of the U.S. Department of Treasury has cautioned the municipality, and last week all but warned Anchorage against its plan to use the COVID-19 relief money to purchase buildings for the care and feeding of street people.
Berkowitz said that he is not concerned because he doesn’t know which White House he’ll be dealing with after November, so he thinks the city will just go ahead with the plan, in the expectation that the Treasury Department, under Joe Biden, will allow the Berkowitz Homeless Hotel plan to go forward.
“We’re proceeding as if it’s going to be authorized,” he said.
However, the money that Anchorage was given — $156 million — has to be spent by December or it must be returned, something reporters did not ask him about during his Friday press briefing.
Rivera last week asked all Assembly members to provide him with their statements regarding the Assembly’s decision to use the money for the Berkowitz Homeless Hotel plan. It’s unclear if Rivera intends to include them in the press conference on Monday, which will be broadcast from the mayor’s Facebook page.
Rivera’s own statement reveals his disappointment over the Inspector General’s curbs on the plans to buy three out of four properties around town for shelters for street people and drug treatment centers.
“Today the Inspector General’s (IG) Office, after preliminary discussions with the U.S. Department of Treasury, talked with municipal officials and I regarding the purchase of three of the four properties within AO 2020-66(S) as approved last night by the Assembly. According to the IG’s interpretation, the property purchases would not be an allowable use of Coronavirus Relief Funds … The next step is to request policy guidance directly from Treasury, the final decision maker on allowable uses. While I am disappointed in the conversation today, I remain hopeful that further discussions with Treasury will resolve the issue. Regardless, we must never stop making progress to assist our houseless population,” Rivera wrote.
Jamie Allard, a member from Eagle River, provided Must Read Alaska with her statement. In it, she said the Berkowitz plan is a misappropriation of taxpayer money:
““The CARES Act provides that payments from the Fund may only be; used to cover costs that are necessary expenditures incurred due to the public health emergency with respect to theCoronavirus Disease 2019 (COVID-19); were not accounted for in the budget most recently approved as of March 27, 2020 (the dateof enactment of the CARES Act) for the State of government; and
were incurred during the period that begins on March 1, 2020 and ends on December 30, 2020.” (US Department of Treasury Guidance for State, Territorial, Local and Tribal Governments Updated June 30, 2020)
“Expanding the use of the federal CRF is in direct violation of the US Treasury Guidance. Federal regulation may be further restricted, but not expanded. “Funds may not be used to fill shortfalls in government revenue to cover expenditures that would not otherwise qualify under the statute. Although, a broad range of uses is allowed revenue replacement is not a permissible use of Fund payments.” (US Department of Treasury Guidance for State, Territorial, Local and Tribal Governments Updated June 30, 2020)
“Eligible expenditures include, but are not limited to, payment for: Medical expenses; Public health expenses; Payroll expenses for public safety, public health, health care, human services, and similar employees; COVID-19-related public health measures; Economic support in connection with the COVID-19 public health emergency; Small businesses; the function of government.”(US Department of Treasury Guidance for State, Territorial, Local and Tribal Governments Updated June 30, 2020)
“Nonexclusive examples of ineligible expenditures: Expenses for the State of Medicaid; Damages covered by insurance; Payroll or benefits expenses for employees whose work duties and not substantially dedicated to mitigating or responding to the COVID-19 public health emergency; Expenses that have been or will be reimbursed under any federal programs, such as the reimbursement by the federal government pursuant to the CARES Act of contributions by States to State unemployment funds; Reimbursement to donors for donated items or services; Workforce bonuses other than hazard pay or overtime; Severance pay; Legal settlements.”(US Department of Treasury Guidance for State, Territorial, Local and Tribal Governments Updated June 30, 2020)
“The MOA does not have the authority or the responsibility to exploit perceived “loop-holes” in the congressional appropriation for the CRF. It is not the federal government’s responsibility to underwrite the MOA’s failures to be fiscally responsible for local taxpayer dollars. The US Treasury Department will hold the MOA liable for all misappropriation of the CRF,” Allard said. “Recoupment of the misappropriated CRF will conceivably double the community’s tax burden to $312 million plus interest, penalties and legal fees. Of the estimated 110K household in the MOA, the per household tax burden would increase by over $2,800. Granted, these figures do not include the burden assumed by our local businesses, and how this will affect the local labor market. For an economy already struggling this is an unacceptable risk. We need to be good stewards of tax payer money.”
The Office of the Inspector General (OIG) is continuing its investigations into questionable expenditures by the Berkowitz Administration, including:
- First Responder Payroll Reserve
- ASD blended Pre-K classrooms
- RuralCap weatherization Jobs Program
- Construction of a new Girdwood Health Clinic
- Public Lands Jobs Program to hire individuals to help improve or expand softsurface trails and other shovel-ready projects in Girdwood and Eagle River
- Energy Efficiency Jobs Program
- Nine Star’s Net-2-Ladder Project
- Covenant House Expansion Program
- AWAIC Expansion
- Child Care Assistance Program