Several months after the Alaska Legislature appropriated $4 million to treat chronic inebriation in Anchorage, there’s still stiff competition surrounding where exactly that money should go.

If you ask Fairview residents and business leaders, who traveled to Juneau to lobby legislators for the grant dollars, the money needs to be spent on more detox and rehab programs. Local social service providers — including the Rural Alaska Community Action Program — are pushing to put the funding toward supportive and transitional housing.

In both cases, the current supply isn’t enough to meet the municipality’s growing demand.

And according to RurAL CAP, recent Medicaid billing changes have led to a crippling budget shortage that could reduce local housing options even further.

The issue surfaced earlier this month at an Anchorage Assembly committee meeting addressing drug and alcohol abuse among the municipality’s chronically homeless. Bill Evans, the committee’s chairman, said the group planned to gather information from various sources before making a final policy recommendation to the full Assembly. At its second gathering Sept. 4, the committee heard from representatives from Bean’s Café, Brother Francis Shelter, RurAL CAP, the Fairview Business Association and other local organizations.

Mary Beth Bragiel, deputy director at Catholic Social Services, outlined the scope of the problem.

In 2013, Bragiel said, approximately half of the Brother Francis Shelter’s more than 3,500 guests had stayed there, on and off, for at least three years. More than a quarter had stayed at the emergency shelter intermittently for at least 10 years. Bragiel told Assembly members she believes nearly all of the shelter’s chronically homeless face mental illness or substance abuse issues; possibly both.

The number of people utilizing the shelter increased by 12 percent over the past five years, she said. According to data from the U.S. Department of Housing and Urban Development, over the last year the number of Anchorage homeless battling chronic substance abuse issues increased by 55 percent.

Bragiel said the shelter isn’t equipped to handle those numbers alone.

Both Bragiel and Lisa Sauder, executive director at Bean’s Café, asked Assembly members to consider backing more supportive housing in Anchorage. They said the city needs at least 100 more beds; space reserved for those whose substance abuse problems contribute to their long-term homelessness.

At the same September meeting, RurAL CAP supportive housing director Corrine O’Neill told Assembly members about a looming $700,000 budget deficit that threatened to shutter transitional housing services at Safe Harbor Inn.

The program – with facilities in Muldoon and west Mountain View – provides more than 100 units of transitional housing for homeless families and individuals facing mental illness. RurAL CAP took over operations at Safe Harbor this winter after its previous operator, a nonprofit called Anchor Arms, Inc., ran the program into the red.

Now, without an immediate infusion of operating dollars, O’Neill said the inn would be forced to close its doors to its current clientele.

She said RurAL CAP was depending on Residential Support Services payments to fund $700,000 in operating costs at Safe Harbor. The Medicaid mechanism also pays for services for 22 clients at Karluk Manor, RurAL CAP’s supportive housing facility in Downtown Anchorage.

O’Neill told Assembly members the budgetary crisis followed a July Medicaid compliance audit and issues between RurAL CAP’s billing partner, Alaska Community Mental Health Services, and the Alaska Medicaid Program.

At the end of the day, she said, the state put RSS billings on an indefinite hold.

Without that funding, O’Neill said Safe Harbor would turn into an affordable housing facility. She said Karluk Manor would be forced to scale back the array of services it provides to Alaskans battling acute alcoholism and chronic homelessness.

At the Sept. 7 Assembly committee meeting, O’Neill asked the Assembly to support Medicaid rate reform in the state of Alaska. Without it, she said it would be impossible to expand supportive housing services to meet the need.

And she said RurAL CAP intends to request some of the recent $4 million in state grant funding to fill the looming budget gap at Safe Harbor Inn.

It was unwelcome news for those who hoped to put the funding toward a new approach.

“One thing we promised the Legislature is this would be a coordinated, case-managed program that would address the substance abuse, the alcohol problems and the things that are at the root of the behaviors,” said Paul Fuhs, a project manager with the Fairview Business Association.

Anchorage’s struggles with chronic alcohol abuse and homelessness are all too familiar for Fairview. It’s home to Karluk Manor and other social services and adjacent to the Brother Francis Shelter and Bean’s Café.

The neighborhood business association has been working to solve its alcohol-related problems through a combination of efforts.

While Fuhs acknowledged the need for more supportive and transitional housing in Anchorage, he said that approach hasn’t done enough to reduce chronic homelessness and inebriation. He pointed to some of the most recent deaths on Anchorage streets – including several people who lived at Karluk Manor. There needs to be a different approach to the underlying problem, he said.

“We just have to take a stand as a community — this is unacceptable to us,” he said.

That means more detox beds and more rehab programs for people who need to cut alcohol out of their lives, Fuhs told Assembly members. Currently, according to DHSS, there are only 12 beds in Anchorage for people seeking a medically supervised alcohol detox. Fuhs said that fact alone can make it impossible for people to end the cycle of addiction and homelessness.

“If you’re coming off of heroin, you’re going to be miserable,” he said. “If you’re coming off of alcohol, you’re going to die.”

Fuhs said the grant money – which will ultimately be distributed through DHSS — should be used with that deadly fact in mind.

In a paper submitted to the Legislature this past session, the Fairview Business Association outlined a broad plan for the $4 million appropriation including outreach, detox and residential rehab programs. The funding is listed in the state’s final capital budget as “competitive grants for chronic inebriate anti-recidivism treatment programs.”

While O’Neill said those grants could help Safe Harbor Inn provide a temporary safety net for hundreds of Alaskans trying to escape homelessness, Fuhs said that’s not the point. When it comes to successfully fighting addiction and homelessness in Anchorage, he believes funding sobriety is the first step.

“You have to keep the safety net from becoming a caught-in that people can never escape from,” he said. “You’ve got to get an escape hatch out; that’s what that money’s for.”