By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at a budget meeting Thursday considered ways to give residents financially affected by the COVID-19 emergency a break on utility bills.
But no consensus was reached on the best way to achieve this, without causing problems with the city budget.
“These are essential services, regardless of the economy,” City Controller Melissa Haley said, speaking about the 2020-21 budgets for enterprise funds. “Really what we’re doing is approving the expense side ... We may have a difficult year but we have to keep providing the services.”
Later in the meeting, City Administrator John Leach announced some short-term help the city was providing to ease pressure on those struggling to pay bills as a result of COVID. The state and federal governments are working on legislation to help businesses and individuals who have lost their jobs or taken pay cuts, but it was pointed out several times at the meeting that some people need help now.
Also at the meeting the Assembly:
– passed on introduction an ordinance to delay the start of the summer electric rates by two months, to help all residents make ends meet during the economic downturn caused by the COVID pandemic. The vote was 6-1, with Richard Wein voting against, but a number of others said they wouldn’t vote in favor of the measure on final passage on second reading because of the costs as they are currently known.
– reviewed enterprise and internal service fund budgets for fiscal year 2020-21, which starts July 1. Enterprise funds (electric, water, wastewater, solid waste, harbors) are intended to run on user fees. Internal Service funds (central garage, IT, building maintenance) are supported by the city departments which are billed for the services they use. There were no changes to the figures in the budget presented by the administrator.
Utility Relief/City
The city announced Thursday that until further notice customers’ utility services will not be shut off for non-payment of bills.
The policy applies only to bills received after the COVID emergency was declared, and the state mandates resulting in business closures and cutbacks.
“This is in alignment with Alaska SB 241 (awaiting the governor’s signature),” the announcement said. “The Municipality is waiving late fees for untimely or partial payment of utility charges (related to COVID-19 impacts) for two billing cycles beginning immediately.”
The news release noted that the bills are not forgiven and must be paid eventually.
“We strongly encourage customers to pay what they are able to pay and to contact our collections manager at 747-1859 if they have any concerns,” the announcement said. “Also, once the emergency ends, any account that becomes past due during the emergency period will be required to agree to a written repayment plan, to be completed in the Finance Department.” The news release said that businesses that are closed can reduce solid waste fees by getting a smaller receptacle.
Enterprise Funds
The first half of Thursday’s Assembly meeting was a review of the enterprise funds for fiscal year 2020-21, and past decisions, which were unchanged. It was pointed out a few times at the meeting that some of the expenses of the city – bond payments, services – have not changed with the pandemic.
The current enterprise fund budgets assume services will continue to be provided at their present levels.
But there was disagreement about whether the FY21 budgets should be adjusted now, or after the summer when the effects of COVID are known.
Assembly member Thor Christianson, who has served previous terms on the Assembly, said the budget is a “crystal ball exercise” in the first place, and will be even more so this year.
“Whether we pass or don’t pass it we’re going to have more budget adjustments than ever before,” he said.
Wein favored taking a look now and “adjusting it to reality,” rather than waiting. But others agreed to leave the enterprise and internal service fund budgets alone for now. The Assembly plans to consider changes to the general fund budget – school funding, police, fire, library, etc. – at its April 9 meeting.
The rate increases proposed in the enterprise fund budgets are:
– 2 percent for electricity. (Average increase $37.44 annually for residential users.)
– 2 percent for water, down from the projected 5 percent increase. ($12.48 annual increase for residential.)
- 2 percent for wastewater, down from projected 5.5 percent increase. ($15.84 annual increase)
– 5.5 percent for solid waste. The rates are largely driven by the charges the city pays to the solid waste contractor, but citizens can get costs down by reducing the amount they throw away, the city finance department emphasizes. The fund has operated in the red since 2013.
– 5 percent for the harbor. A proposal to reduce the rate hike to 3 percent failed on a 2-5 vote, with Valorie Nelson and Kevin Mosher in favor. Steven Eisenbeisz said he voted against because he would like to see a smaller rate hike than 3 percent.
The Assembly plans to review the general fund budget for 2020-21 at its April 9 meeting at 6 p.m., and make adjustments. It’s assumed that the city will see lower revenues as a result of the pandemic, particularly with the expected downturn in the visitor industry.
Utility Relief/Assembly
The Assembly debated the merits of changing the start date of the higher summer electric rates, before passing the ordinance on first reading. Residential electric rates are 19 cents per kilowatt hour in the summer, and 12 in the winter.
If passed on final reading April 14, the start date of the summer rates would advance from the first billing cycle in May to the first billing cycle in July, in order to provide relief to those hurt by the pandemic.
Some members said they likely wouldn’t vote in favor on final reading, given the estimated $1 million cost, but co-sponsors Thor Christianson and Kevin Knox asked that the ordinance be allowed to go forward to the next meeting, while more information is gathered. Christianson said the city may be able to get help to cover the cost through federal COVID relief legislation, but Wein said he did not want to “gamble” that was going to happen.
Mayor Gary Paxton said he was concerned about disrupting the electric fund because of its problems, and efforts under way for federal help with covering the cost of the Green Lake hydro upgrades and the some $140 million in Blue Lake dam bonds.
“The electric fund is our most important and vulnerable enterprise fund,” he said, adding that he would like to consider relief on an “as-needed basis.” “We’ve got to get the electric fund stabilized.”
Steven Eisenbeisz expressed concern about the effect on the general fund, which would have to cover any shortfall in electric fund revenue. The Assembly could then be facing more cuts in the general fund for services that citizens value.
“It has great short-term appeal,” he said, “I’m concerned about long-term.”
Wein pointed out other pressures on the general fund, including expected declining tax revenues, and other effects of the COVID virus.
“We need to think about the health of the general fund,” he said.
Only a handful of people were in the meeting room at Harrigan Centennial Hall: Leach, City Clerk Sara Peterson, Chief Finance and Administrative Officer Jay Sweeney, City Attorney Brian Hanson and KSCT-TV videographer Dan Etulain. Assembly members attended remotely, through the video-conference program Zoom. Written and telephonic public testimony was allowed, but there was none.
In other business, three Assembly members co-sponsored the call for a work session 5 p.m. April 9, before the next special budget meeting, to talk about ways to reduce impacts on citizens affected by the pandemic, including mandates that require quarantines, and limit travel and business operations.
