Soldotna’s City Council will be voting Wednesday on the city’s proposed plan for distributing $4.5 million in COVID-19 relief funds to small businesses and nonprofits within the municipality.

Resolution 2020-034, if adopted, would approve the Soldotna CARES Relief and Recovery Grant program, which is intended to provide financial assistance to eligible organizations in two separate payments, or phases, according to the guidelines submitted to the city council on July 1.

Phase one of the grant program, if approved, would distribute $1.5 million to local businesses and $750,000 to nonprofits out of the $7.375 million that the federal government allocated to Soldotna as part of the national coronavirus relief package. Phase two of the grant program is slated to begin in October and would distribute similar amounts to businesses and nonprofits.

The grants would be distributed to all eligible applicants, so the individual grant amounts may be prorated based on the number of applications received and the amount of funds available. If demand for business grants in phase one exceeds $1.5 million, an additional $500,000 will be allocated from phase two.

The application period for phase one will be open for two weeks and will begin after the resolution is adopted.

Applicants that have received funding through other forms of state, federal or municipal relief will be eligible for the Soldotna grant as long as they demonstrate financial needs that have not been addressed by the other funds.

Eligible uses of grant funds include payroll expenses, rent, mortgage payments, utility payments and other similar expenses.

Phase one funds must be spent by Nov. 30. Recipients will be required to submit an expenditure report to the city by Dec. 30.

As part of the resolution, businesses are encouraged to spend grant funds locally whenever possible.

Local businesses

To be eligible for a Soldotna CARES grant, businesses must operate out of a physical location with the boundaries of the city of Soldotna. This includes brick and mortar establishments, farmers markets and other physical spaces that depend on foot traffic for business.

Businesses must have been in operation with a valid Alaska business license on or before Jan. 1, 2020 and must plan to stay in operation through the end of 2021.

Businesses are also required to have had a minimum of $25,000 in annual gross sales for the 2019 calendar year in order to receive a grant.

People who own multiple businesses within city limits can apply for a grant for each business as long as each business meets the eligibility criteria previously listed.

Business owners will be eligible to receive up to 5% of their business’s 2019 gross sales, capped at $15,000.

Nonprofits

Nonprofit organizations will be eligible for the Soldotna grant if the organization provides services to Soldotna residents on a regular basis, the organization has been in operation since at least Jan. 1, 2019 and a majority of the organization’s board of directors or local advisory board are Alaska residents.

All IRS-certified 501 nonprofits are eligible, including faith-based nonprofits, as long as the funds are used for services that are accessible regardless of religious affiliation.

Nonprofits that are engaged primarily in political or lobbying activities are not eligible.

Eligible nonprofits who apply within the deadline will receive up to 10% of their 2019 gross revenue — or another metric determined appropriate by the city manager — for a maximum amount of up to $25,000.

If adopted on Wednesday, Soldotna will be the third city on the Kenai Peninsula to establish its municipal grant program, following the cities of Kenai and Homer. The window for applying for Kenai’s grant program closed on June 19, but Homer’s program will be open until Sept. 25.

Soldotna’s City Council meeting will take place on Wednesday, July 8 at 6 p.m.

Reach reporter Brian Mazurek at bmazurek@peninsulaclarion.com.