Treasury lays out options for city to move forward with controversial property purchases

America's Best Value Inn and Suites
America’s Best Value Inn and Suites is proposed as a transitional housing facility with homelessness resources. Photo taken on July 15, 2020 (Lex Treinen/Alaska Public Media)

Uncertainty over the city’s controversial purchase of properties for housing and support services for people experiencing homelessness seems to be at least partially resolved after the Berkowitz administration met with U.S. Department of Treasury officials this week.

Earlier this month, the Anchorage Assembly approved about $12 million in federal CARES Act money for the building purchases. The purchase plan is structured to address the city’s need for socially distanced housing and homelessness resources during the pandemic. 

RELATED:What are the city’s plans after controversial building purchases in Anchorage? Here’s what we know.

But community members who were opposed to the purchases complained to the Treasury that it was a misuse of relief money. Shortly after, the department’s inspector general advised the city that the property purchases may not be an acceptable use of the funds. 

This week, Treasury officials laid out two options for the city to move forward with the plan. One is to spend CARES Act money on first responder payrolls. That would free up regular municipal funds to go toward the property purchases. 

The other is to go ahead and use the CARES Act funds on the property purchases, but the city would need to get services up and running by Dec. 30, the federal government’s deadline for spending the relief money. It is possible that deadline will be lifted or extended.

RELATED: Anchorage Assembly authorizes city to purchase properties for homeless services

“As we had concluded, it is possible and permissible to use CARES Act money to purchase buildings to provide services and housing for the homeless in response to COVID-19,” said Municipal attorney Kate Vogel.

The assembly flagged several other initiatives in their CARES Act spending plan as needing Treasury guidance, including jobs programs and construction of the Girdwood Health Clinic. Vogel said the Treasury officials neither approved nor objected to those projects, but pointed out it could be simpler to reappropriate the money from the city’s general fund.

“Treasury said, ‘You know, listen, a lot of communities are going into contortions … to try to make their individual small programs fit within Treasury guidance,'” Vogel said. “If the assembly believes that this is worthy of spending municipal funds on, to have that jobs program, then do it through municipal funds that have been freed up by spending CARES act money on payroll.”

It will now be up to the assembly to decide which option to take and potentially reappropriate funds for the project.

“The way that most of the assembly sees it, we want to be able to get these dollars out in the community as quickly as possible,” said Assembly chair Felix Rivera.

Rivera said he hopes to call a special meeting to discuss the appropriation within the next week.