Juneau Assembly members dealt with a lot of the nitty-gritty in next year’s municipal budget during a long meeting Wednesday night, getting into lengthy discussions about items ranging from setting aside $3 million to continue subsidizing Eaglecrest Ski Area to giving a veterans’ group $2,000 to rent space for events at Centennial Hall.
The five-hour Finance Committee meeting featured lots of talk about sparse funds and 5-4 votes on various budget items. There also was a warning the city’s projected revenue for the fiscal year starting July 1 is about $1.15 million less than expected due to recent state and federal government cuts, which equates to roughly 0.17 mills if residents are asked to make up for that gap, and more setbacks may be ahead.
“There are several unknown risks that are always in the back of our head — Medicaid funding, recessions, grants for some of our social services that the community values, sales tax (and) what might happen to that,” City Manager Katie Koester told Assembly members. She said the city is already facing the loss of $500,000 because Congress failed to extend the Secure Rural School program and another $624,000 in Community Assistance the state Senate has cut from its budget.
Among the notable local budget items approved Wednesday was $1 million (half essentially as a loan) to help the Central Council of the Tlingit and Haida Indian Tribes of Alaska launch a childcare facility at the former Floyd Dryden Middle School. Among the proposals put on hold was $735,000 for site preparation of a playground at the Dzantik’I Heeni campus until Assembly members know specifically what items will be included in a school projects bond measure they are seeking to put on the fall municipal election ballot.
The length of the discussions kept the Assembly members from getting to the biggest items on the agenda — notably a proposed mill rate increase and sending the budget itself to the full Assembly for a final vote scheduled June 9. Instead those items were postponed until the Finance Committee’s meeting next Wednesday.
That potentially sets the scene for some deadlocked 4-4 votes since that is also the final night of the legislative session and therefore Assembly member Ella Adkison may be at the Capitol instead of City Hall since she is a staff member for Sen. Jesse Kiehl (D-Juneau). However, the two buildings are only a few blocks from each other if the need to resolve a stalemate arises.
Eaglecrest seeks millions as it faces extended period of debt
A sometimes grudging willingness to support money-losing operations at the city-owned Eaglecrest Ski Area continued among Assembly members during Wednesday’s meeting as a bleaker situation than recently expected was presented by Eaglecrest Board President Mike Satre. He cited a 40% pay increase for employees to overcome a chronic worker shortage as a short-term cause, and the need to fix aging infrastructure and install the gondola as financial strains during the coming years.
“We already knew going into this budget season — really, for the last two years — that we were going to be looking at negative fund balances to bring summer operations online,” he said. “What we have done — what the board has approved — in terms of the initial ask to the Assembly is to try and address the significant problem that we have with retaining, recruiting and retraining people by addressing the fact that our pay scale doesn’t match what our competitors are doing, especially when we consider the cost of living.”
Satre said updated data shows it’s possible Eaglecrest will have a negative fund balance that may peak at $5.5 million during at least the next five years, but it’s likely the ski area will get out of debt and become self-sustaining by 2032.
The revised scenario of being in debt for at least a couple of years longer than previously suggested was unsettling for Assembly member Alicia Hughes-Skandijs. She said she was OK earlier this spring with the ski area’s fund balance being negative for a time, but “I no longer feel that way.”
“I think the numbers are of such magnitude and it’s not a dip in the road that’s small enough for my comfort,” she said, adding “I want to support what they need to get back on track. (But) this is a much larger commitment if we, without appropriate data, let the unbalance go negative for so long for such a large amount.”
Assembly members after nearly two hours of discussion among themselves and Eaglecrest officials voted to approve setting aside about $3 million for the coming year to ensure the bills for the ski area are covered even if its bank balance goes negative. That amount is lower than the resort’s “full budget,” which includes authorization to hire a larger number of employees.
“I think we’re doing a lot to show our support for Eaglecrest here and put in a lot of resources without a lot of information about where we’re going,” Assembly member Christine Woll, the committee’s chair, said. “And I would rather see the impacts slowly over (time) — as we get better at this 40% personnel increase, that’s going to make a big difference — I’d like to check in on where we are in a year.”
Getting into penny-pinching detail
Among the 5-4 votes Wednesday was cutting by half a $500,000 increase in the $1.8 million provided to the Juneau Community Foundation for grants provided for a range of local purposes. Many split votes occurred on about 15 other pending line items, with proposed amounts being reduced and/or designated as one-time rather than recurring funds by Assembly members urging fiscal prudence.
A 5-4 vote also put the Dzantik’I Heeni playground funds on hold, with opposing Assembly members arguing the project is widely supported and preparatory work should proceed even if plans for the remaining funds are not finalized.
The level of scrutiny Assembly members got into was exemplified near the end of the marathon meeting with two of the smallest items in the proposed budget.
One was a $5,000 request from The League of Women Voters Juneau for a largely volunteer program that brings local public school students to the Alaska State Capitol and Juneau Courthouse for educational tours. Deputy Mayor Greg Smith said the original request was $10,000, but officials with the organization told him they were OK with a $5,000 allocation and willing to raise the remainder.
But Assembly members — despite hours of previous emphasis on cost-cutting — voted 6-3 to increase the allocation back to the original full amount.
“This is a really excellent program,” Adkison said. “I see it firsthand quite a bit. I understand we have a lot of budgetary pressures, but we’re really getting to the point of pinching pennies. And I don’t know that a $5,000 would make that much difference to our budgetary circumstance, but it’ll make a very large difference, I imagine, for this group of volunteers doing this good work.”
Considerable back-and-forth discussion also occurred regarding a $2,000 request by American Legion Auke Bay Post 25 to host a couple of events honoring veterans during the coming year at Centennial Hall. Smith expressed concern supporting that request would result in a multitude of other nonprofits also seeking to have their events funded by the city. Assembly member Neil Steininger said there are many other organizations that are “equally sympathetic” as the American Legion.
“I think if we want to address this we should think about addressing the nonprofit rate as a whole instead of an individual grant,” he said.
However, Mayor Beth Weldon spoke in favor of the funding — in this one instance — before the Assembly members approved it by a 5-4 vote.
“The only reason I would vote for this is because it’s for veterans,” she said. “I can tell everybody who’s a nonprofit right now: don’t try and ask me to give you a break on anything else. I’m just doing it for veterans. And as the mother of an active duty Marine, I would be proud to support this.”
Heading toward the final vote
The main components of the total City and Borough of Juneau spending plan are a roughly $140 million municipal government budget, $152 million budget for Bartlett Regional Hospital, $95 million Juneau School District operating budget and $60 million in capital improvement projects. The total budget of about $537 million also covers Juneau International Airport, docks and harbors, Eaglecrest Ski Area, public works and utilities operations, and various grants and awards to community organizations.
CBJ’s biggest revenue sources are slightly more than $200 million in fees for services and more than $140 million in taxes. A year ago the Assembly reduced property taxes from 10.16 mills to the current rate of 10.04 mills — the lowest in decades — but members are looking at increasing the rate to 10.19 mills due to extra costs such as taking over three buildings from the school district after its consolidation during the past year.
Residents will get a chance to testify on the final drafts of the budget and mill rate ordinances before the Assembly votes on them at the June 9 meeting.
The proposed rate means property owners would pay $10.19 for every $1,000 in taxable value of their properties — equating to $75 more on a $500,000 home.
Among the financial matters the Assembly still has to resolve are proposals for a seasonal sales tax increase — which is part of next Wednesday’s Finance Committee agenda — and bond measures for school projects and upgrades to utilities infrastructure. The Assembly will need to introduce ordinances for ballot items by their June 9 meeting and approve it by July 28 to put the question on the fall ballot, according to City Finance Director Angie Flick.
• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.
