By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly reviewed the status of the city’s enterprise and internal service funds Thursday night at the latest of its special meetings on the 2022 budget.
Included in the overview were issues of rate increases, capital projects, long-range plans and fund balances in the electric, water, garbage, sewer and harbor accounts, as well as those for the airport terminal, Gary Paxton Industrial Park, and city-owned cold storage/marine services center on Katlian Street.
Also reviewed were the internal service funds – IT, central garage and building maintenance, which are paid for in the budgets of other city departments.
In the discussion at the end of the financial review, Mayor Steven Eisenbeisz suggested holding off on all rate increases until the city completes long-term plans for capital projects and rates.
“I just wonder if we don’t wait to set rates until we see what the plans come back with,” he said. Once the long-range plans are completed there may be opportunities to lower rates, or show justifications to citizens about why rate hikes are needed, he said.
Valorie Nelson agreed and said the public would appreciate this, given the increases over the past several years. She said most citizens in the private sector do not get incremental increases in wages in line with inflation.
But the prevailing opinion of the Assembly was that there wasn’t enough time for rate studies before the deadline for passing a budget, and that matching rate increases with inflation would stave off the need for “spikes” in rate increases.
“One of our general goals is to avoid spiked increases,” clarified Finance Director Melissa Haley today. Most of the rate increases are around the rate of inflation with the exception of harbors and solid waste, which will see larger hikes this year.
Thor Christianson said he would be open to cutting rates once the studies come back, but “we have a good idea of what we need for this year, projects we need to do ...If we hold off it’ll hurt the balances of the funds.”
He said he doubted the studies would recommend lowering rates.
Kevin Knox agreed. “This is not the best time to do it,” he said.
Rebecca Himschoot said it appears best at this time to “stay the course,” and adjust the rates down if rate studies show this can be done.
In the review of enterprise funds, the finance department touched on the effects of the pandemic on some of the funds, such as airport terminal.
The finance department recommends rates for enterprise funds based on operations and plans for capital projects. Some of the long-range plans have not been updated in recent years.
City Administrator John Leach said information is still coming in on how much funding Sitka might receive in the American Rescue Plan just passed by Congress, and how the funds can be used.
“It looks like $3.4 million could be coming to the city and borough,” Leach said. “There are two pots of money ... we’re a city and a borough: there’s a pot of money for the municipality and a pot of money for counties. Similar to Juneau, we qualify for both of those but there’s still some treasury review that has to happen, and some rules around it.”
He said this relief could be used for revenue replacement but the city has to jump through some hoops to show it has lost revenue as a result of the pandemic.
The major blow in 2020 was to sales tax revenue with the loss of the cruise ship season and fewer independent travelers and charter fishing clients.
The city is also hoping for economic relief for infrastructure, but that amount and how it can be spent is not known at this time, said Haley.
“It’s going to be very much like the CARES funds, where the rules are going to be evolving - so it’s really too soon ... a few things (heard on a recent webinar) raised concerns about how easy it’s going to be to spend,” Haley said. “It’s going to be one of those things where we have to wait to get information to know what the possible uses are.”
Of the $1.9 trillion in economic relief provided in the American Rescue Plan, some $350 billion is targeted for state and local governments.
The $14 million the city received in the first round of CARES money was distributed to citizens, for-profit and nonprofit businesses, social programs and schools, with a small amount going toward COVID-19 mitigation measures (hands-free equipment at city hall, new internet technology options).
From the public, Richard Wein, representing the Sitka Community Health Council, told the Assembly about various programs under way at SEARHC, including the expansion of the “interventional pain therapeutics.” It includes both diagnostic and therapeutic injective- type therapies, he said.
The council was created following SEARHC’s purchase of the Sitka Community Hospital business and the disbanding of the hospital board. As an advisory group. the council has representatives from Sitka Tribe of Alaska, SEARHC and Sitka at large. The council meets quarterly with one meeting open for public comment.
