The Kenai City Council voted last week to indefinitely postpone an economic stimulus program that would have targeted the city’s tourism and hospitality industries.
The council cited information suggesting that those industries are recovering from the COVID-19 pandemic and no longer need the assistance.
The program, which was approved for introduction by the council at their June 2 meeting, would have used $205,600 to offer vouchers to people who bought a single tourism, travel or hospitality service in Kenai, to be used on a second purchase at that business.
In targeting the program to tourism and hospitality, city administration said those industries were particularly impacted by the COVID-19 pandemic. However, Kenai City Manager Paul Ostrander told the council last week that those industries are doing better than expected.
Kenai Peninsula Economic Development District Executive Director Tim Dillon testified in support of the program during the council’s June 16 meeting and said it would put more money into local small businesses.
“This is another program where you guys are in front of the rest of the state,” Dillon said. “I support this wholeheartedly.”
Kenai City Manager Paul Ostrander said Wednesday that when he first proposed the program to the city council in January, the goal was to provide additional support to industries hit hard by the COVID-19 pandemic.
“We felt strongly at the time that the hospitality and tourism industries were the hardest hit and every indication we had, both in the state … and nationally, is that these were some of the industries that were the hardest hit,” Ostrander said.
However, Ostrander said the most current information suggests those industries are doing OK.
“Occupancy rates are very high, lodges are full, guides are … incredibly busy,” Ostrander said. “Many of these industries that we thought would be impacted more severely by COVID, it appears that there’s unexpected recovery of this industry.”
Ostrander said he had reservations about the introduction of the legislation approving the program during the council’s June 2 meeting and that “internal discussions” and a hefty tourism and marketing grant from the state helped further inform his recommendation to suspend the program.
Council member Jim Glendening said he agreed with Ostrander’s assessment and that additional funding at this point in time would be “redundant.”
“As I look around our city, I can see there’s quite a bit of economic activity,” Glendening said.
The City of Kenai offered multiple economic stimulus programs over the course of the COVID-19 pandemic, including one that incentivized shopping at local businesses and another aimed at helping people buy groceries. Those programs were similar to ones offered in Soldotna and in Seward.
The council voted unanimously to suspend the program by postponing it indefinitely. The council’s full meeting can be viewed on the City of Kenai’s YouTube channel.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
