By SHANNON HAUGLAND
Sentinel Staff Writer
The Assembly at a short special meeting Thursday continued its review of the general fund budget for the next fiscal year, but made no changes to the budget as presented.
Revenues are expected to be up, mostly from the expected increase in sales tax income. Expenses are up, too, mostly from the inflation that has raised the cost of goods and services, but also from an increase in capital projects following a backlog of projects and cautious capital spending during the pandemic.
“I think one of our big challenges right now is we don’t know what our new level of capital funding is going to be,” Finance Director Melissa Haley said. “We’re still kind of finding what our new normal is. ... It’s great to be able to make a dent in our deferred capital this year but we also know deferred capital grew over the past couple of years.”
The draft budget for the general fund for fiscal year 2024 is $42.6 million, up from $38.4 million for FY23, which ends on June 30. That includes a $2.5 million increase in capital spending from the $3.4 million in the current year.
Increased collections from online merchants, and a robust visitors season brought in more sales tax than budgeted for 2023. The total is expected to be $19 million for this year, and $19.6 million in FY 2024.
In 2020 sales tax income was $12.1 million; in 2021 it was $13.1 million, and in 2022 it was $16.4 million.
Revenue from property tax is also up, but only slightly, compared to sales tax, since increased assessments are being offset by increased exemptions, the city finance office said. Revenues are expected to come in at $7.2 million for FY23 and $7.4 million for FY24.
The Assembly touched on some areas of concern, including rising costs, deferred capital maintenance, the difficulty of recruiting and retaining staff and in obtaining appropriations for emergency repairs.
Some changes may be proposed at future budget meetings, including incentives or bonuses to help with employee recruitment and retention.
The human resources department director, Valarie Ruff, reported on the compensation study underway, but nothing was proposed for the budget at this time along those lines.
“It’s the start of a conversation,” Mayor Steven Eisenbeisz said Friday.
Eisenbeisz said he doesn’t feel like there’s “fluff” in the budget, but is concerned over the rising bottom line, particularly over the eight years he has been on the Assembly.
He mentioned expenses added after citizen input, including the new Parks and Rec department, and the $750,000 line item in the 2024 budget for a study to identify likely places to build housing, which Assembly members agree is a pressing need.
“I’m particularly excited about land behind the high school,” Eisenbeisz said. “That hasn’t been studied in the recent past and has potential.”
At the last meeting on the budget, Assembly member Crystal Duncan proposed a $50,000 one-time contribution toward the new cabin community neighborhood on Jarvis Street that will be built for un-housed people in Sitka. It’s currently in the draft budget, under Donations, which includes contributions to such nonprofits as The Ride and Sitkans Against Family Violence.
First reading on the budget ordinance is scheduled May 9.
The general fund covers such general services as the police and fire departments, city administration, legal and finance departments, the library, recreation, maintenance, streets and Harrigan Centennial Hall.
The 46-page draft for the general fund budget can be viewed at cityofsitka.com under the Assembly meetings tab, and under the March 2 Assembly meeting.
Enterprise funds, including water, wastewater, electric, sewer and harbors, are supported by ratepayers, and higher rates are proposed for most. Internal service funds, such as garage and IT, are funded by the city departments using the services. Ordinances on budgets for the enterprise funds will be introduced May 9.
One of the largest expenses in the general fund is support for the Sitka School District. The amended city budget for the current year is $8.19 million; the figure set for 2024 is $8.53 million, which is the cap for local funding allowed by the state.
