Daily Sitka Sentinel

Assembly, City Staff Attack Budget Early

By SHANNON HAUGLAND
Sentinel Staff Writer
    The Assembly will hold a special meeting Thursday to continue whittling away at decision points for the city’s fiscal year 2020-21 budget.
    City staff and Assembly members started the process a month earlier this year, in order to get a solid draft budget done by March 1.
    “It’s a completely different approach,” said Interim City Administrator Hugh Bevan. “I wanted to try something different from what we’ve done in the past.”
    He said in previous years the administrator’s budget was due by March 1, when the Assembly had its first crack at it.
    “The Assembly then has to try and figure out what’s in it and how the pieces fit together,” said Bevan, who has served as administrator in the past. “This year, the Assembly is basically participating in developing the budget at the same pace that staff is developing it. They’re actually involved in the step-by-step process the department heads have to go through to get the budget to the Assembly by March 1.”
    Bevan has been administrator since mid-October, filling the position until some time in March, when the new administrator, John Leach, arrives to take over.
    “It would be nice to have the budget in place by the time he starts,” commented Bevan. “My hope is this process will become a model for the future so it’s easier for the Assembly and staff to put a budget together. If we can put it together by April, we can take a break from budget meetings in May.”
    City Controller Melissa Haley said the general guidance city staff has received is to present a “status quo” budget with no significant changes from year to year.
    The governor’s budget, released in December, gave Sitka’s city finance department and administration a number of other assumptions to work with:
    – state revenue sharing will be the same as fiscal year 2020
    – federal PILT (payment in lieu of taxes) will be $600,000
    – fish tax revenue will be $900,000
    – state contribution to school bonds reimbursement will be the same percentage as FY20 (which is a cut from the original reimbursement amount).
    The Assembly also gave general direction in December on items under the city’s control. Those call for:
    – including the Community Affairs position in the FY21 budget and modify the job description to include grant writing.
    – status quo for city staff levels.
    At their last budget meeting, Assembly members reviewed proposed utility rate increases that would be needed to continue providing service at their present levels. Assembly members provided general guidance to keep rates as low as possible while maintaining services. The figures presented were as follows:
    – a 2% increase in electric rates
    – a 2% increase in water rates
    – a 2% increase in sewer rates
    – a 5.5% increase in solid waste rates
    – a 3% increase in harbor rates.
    With school funding, the Assembly has proposed “funding to the state cap” for the local contribution for instructional expenses, plus full funding for the same “non-cap items” as the current year. The net effect is a $333,293 increase from FY20 to FY21. An Assembly meeting to set the city contribution level for schools is set for Feb. 6.
    At the Thursday meeting, Haley said, “We’ll be reviewing and confirming the decisions that came out of the December 23 meeting and making sure we are super-clear. We’re still crafting and putting the budget together.”
    The Assembly was split on a number of the proposed rate increases which will be discussed again on Thursday.
    Both Bevan and Haley said the city’s main challenge is keeping up with needed capital repairs and improvements.
    “It’s always finding enough resources to fund our infrastructure repairs,” Haley said. “That’s our broken-record challenge year after year.”
    She said the city has a solid long-range plan for capital projects, but added, “Just because we have the plans doesn’t mean we have the resources to implement them. ... When you are looking at one year, we’re OK. The challenge comes when we’re looking at big repairs to infrastructure. We’re putting in significantly less than is needed for capital projects. Our deferred maintenance and capital repair needs are growing.”
    Bevan agreed.
    “Generating enough money to make meaningful progress on capital projects – it’s becoming harder and harder to do that,” he said.
    On the positive side, Haley said, the governor’s budget released in December gives the city a better idea of what to expect.
    “Last year it was so dire,” she said of Gov. Dunleavy’s FY20 budget. “We have a lot more information at this time than we did last year.”
    Other items on Thursday’s agenda include reviewing revenue projections, debt structure, and working capital balances; and getting direction on new proposals for 2021.
    Members of the public will have two opportunities to comment, and a special report at the top of the agenda from the city’s lobbying firm, Blank Rome Government Relations LLC is also on the agenda.
    Thursday’s meeting starts at 6 p.m. at Harrigan Centennial Hall.