Denali Commission Returns $15 Million to Government

After seven months of uncertainty, the head of the Denali Commission says a long awaited answer about whether the commission would need to return $15 million has been settled. Joel Niemeyer is the federal co chair of the commission. He’s been waiting for months for clarity from both the Office of Management and Budget-OMB and the Government Accountability Office-GAO on how and if, $15 million in carry over funds the commission had on its books had to be returned. Neimeyer says the agency has returned all of the money.

“So of the money we gave back, there wasn’t any specific projects that were ongoing that were harmed, there weren’t any specific projects that were about to start that were harmed. It’s basically lost opportunity so I would say what it really turns out to mean is some projects may have started in FY12 but more likely FY13 aren’t going to happen. Fifteen million dollars worth,” Neimeyer said.

He says within 48 hours of receiving the fy11 money last week, all funds were obligated and $15 million was carved out from various pots and returned.

The issue arose last year when congressional staffers told Neimeyer it didn’t look good for the commission to carry over funds from year to year. It appeared the agency didn’t need the money, even though the commission operates with what is known as ‘no year money’, which means carry over should be fine. But Neimeyer heeded the warning, dutifully obligating funds to future projects– then was told in February, Congress wanted the money returned.

Neimeyer says he’s making changes in how money is doled out and says in the past if projects were languishing, commission members would politely ask the grantee if they could help.

“I think those days are over. I think we’re going to have to start managing those types of funds and if grantees projects are languishing because maybe they thought they had site control and now they don’t, they didn’t get their permits, maybe they didn’t get their funding, or for whatever reason the projects aren’t moving forward, we’re going to have to put them on notice and if they continue not making forward progress, we’re going to have to take back those funds and put them out on other projects,” Neimeyer said.

He says this will be one of the biggest changes going forward. He says he’ll also insist on more frequent billing from grantees rather than waiting for one final billing and they will only carry over required base amounts.

Kathie Wasserman is the executive director of the Alaska Municipal league, the organization that advocates for municipalities throughout the state. Wasserman is also a commissioner on the Denali commission. She says although the commission did nothing wrong, she’s concerned that some congressional members will see the rescission as a black mark.

“I’m sure it doesn’t enhance things. But um, and things are already looking a little wobbly, I know all three in the delegation have been working hard to re-authorize the commission. And I’m sure that this is just one more mark that makes it, makes their job a little more difficult,” Wasserman said.

Wearing her AML hat, Wasserman says she is worried about how small communities will be able to secure funds for big ticket items in the future.

“If you have a huge need in your community and you can’t get an earmark and you can’t get a loan and you can’t sell bonds, how are you going to some of those things purchased? I mean you can save money till the cows come home but it’s just not going to happen, so this probably will put a lot of communities back a bit by not enabling them to just get some of their infrastructure up where they can provide basic services,” Wasserman said.

The commission’s Neimeyer says the types of projects that will be delayed are fuel system upgrades and waterfront improvements. He is optimistic however that the commission is on firm financial ground for future work and new collaborations.

“It means we’ll be doing a lot more collaborations with local communities, with regional partners and with our state and federal agencies to find out how can we leverage our funds to better use. I think my team is up for that and I think our program partners are enthusiastic about that and I think the next couple of years hopefully won’t be as painful as this one was,” Neimeyer said.

Neimeyer says he anticipates fy12 money will be consistent with current year funds. He’s seen no efforts at reductions in base allocations.

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