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By Dan Rudy 

State cuts looms over borough budget

 


With rock bottom oil prices pushing the expected deficit to as high as $4 billion, Alaska's financial crisis understandably cast a pallor over Tuesday's City and Borough Assembly meeting.

Speaking with city finance director Lee Burgess on Monday, one of the key areas of concern for Wrangell moving forward will be an impending drop by thirds each year to state revenue sharing commitments. This year funds came to $568,000, but could taper off to $417,000 the coming year, less than $300,000 after that, followed by no funds at all by the middle of 2018.

Cuts to the ferry system notwithstanding, other areas for concern will be state allotments for community jail funding, which already fell sharply this year, and for capital projects, upon which a $10.7 million replacement of the facilities at Shoemaker Bay Harbor currently hinges on.

On the state budget, Borough Manager Jabusch reported to Assembly members the Alaska Municipal League has been paying close attention to negotiations in the Legislature. While it indicated much of the budget is now in place, details will likely be unavailable until the last few days of the session. City department heads and the finance director are working on a budget draft as well, which should be ready to present by late April.

The wider region has also been nervously awaiting a final state budget. Assembly members Mark Mitchell and Julie Decker returned from Southeast Conference's Mid-Summit Session last week with unpleasant news about the budget crisis and its expected impacts.

“The message is pretty bleak in Juneau,” Decker said. One of her larger concerns is political, she pointed out. It being an election year, legislators seemed hesitant to tackle unpleasant but necessary revenue increases to balance the state budget.

“I don't know if it's a completely foregone conclusion that they'll take no action,” Decker said. However, she was not hopeful.

Mitchell's takeaway from SEC was that the toughest cuts to services and new taxes would likely wait until after the coming budget cycle to take effect.

“We'll just have to buckle down and contend with it,” he said.

In his report to the Assembly, Jabusch cited data from the state assessor's office which indicated Wrangell would be in a relatively better position than some of its neighbors to handle such future constraints. Per capita, the city's general obligation debt was by far and away the lowest, at $644. The next lowest were Craig at $1,511 and Sitka at $2,924, with a high of $20,863 per head in Skagway.

Over the last 15 years, Jabusch emphasized the city had undertaken more than $100,000,000 in capital projects, with very little debt incurred. Meanwhile, taxes collected on property, sales, raw fish, alcohol and other areas were the lowest in Wrangell, with an average burden of $1,800 per resident. By contrast, residents in Ketchikan and Juneau bore a respective $3,209 and $2,839. And while economically less diverse than the larger boroughs, Wrangell's boatyard and medical services sector both give the community a sturdier footing than some.

“There's some doom and gloom, but hopefully there's a ray of hope at the end of that,” Decker said hopefully.

Tuesday's meeting was prefaced by a budget workshop with members of the school board and district. Superintendent Patrick Mayer explained their current incarnation of the budget was not substantially different from this year's, but a final calculation would depend on education funding levels agreed on by the House and Senate.

While the Base Student Allocation increase by $50 proposed by the governor's office made it into drafts put forward by both legislative chambers, whether the state's contributions to teacher's pensions would drop remained unclear.

Reporting on projects, Jabusch said most of the final items on the city dock refurbishments have been bid out and signed, including railings along the dock approach, an additional summer float on the south side and its gangway. Only electrical remains for the project, which should ready to bid out by the month's end.

While the paving of Evergreen will not happen this year, Jabusch reported the city will make completion of paving at Wood Street a priority before its grant runs out in June 2017. On Monday and Tuesday Public Works patched up the potholes at the Shoemaker Bay Harbor parking lot, filling and grading the surface to reduce water retention.

He also wanted to remind homeowners that assessment notices are heading to postal boxes, and that residents have until April 20 to file an appeal. Because assessments are not especially detailed, residents are encouraged to file an appeal if they have any questions.

“That's part of the assessor's job, to meet with everybody,” Jabusch explained. Forms to file an appeal are available at City Hall.

Contaminant remediation continues at the Byford yard, with a project manager with the Department of Environmental Conservation due to visit this Wednesday. Mitchell queried whether Jabusch knew if the Byford cleanup was turning out to be more extensive than first expected. He responded he had not heard anything to that effect.

“We'll find out something tomorrow but we're certainly not in a position to do anything,” he told Mitchell.

Speaking earlier this month, DEC expects to have the bulk of its work complete by the end of this summer. The cost could potentially run in the neighborhood of $3.9 million, to be paid for through the state’s Oil and Hazardous Substance Release Prevention and Response Fund.

Assembly members approved on second reading an ordinance amending municipal code to allow them to fully participate in meetings by phone. The change is based in part on Sitka's code. Out of a new need from this decision, the Assembly also approved the addition of $950 to the clerk's budget for the purchase of a new teleconference phone for City Hall, to come from General Fund reserves.

It also approved a noncompetitive purchase of four 1,440 Volt outdoor primary switches for Wrangell Municipal Light and Power in the amount of $64,113. The money matches funds being put up by Southeast Alaska Power Agency to proceed with work at the substation near the power plant.

The Assembly issued a resolution opposing Senate Bill 198, which proposes imposing a 12.5-percent royalty on seafood production.

“What has been proposed by one of the senators is to treat seafood like oil,” said Decker, who is also executive director of Alaska Fisheries Development Foundation. “It's craziness. It's a relative increase of over 500 percent.”

The Assembly also approved cancellation of its scheduled May 10 meeting, so members will be free to participate in a memorial service. The Royal Canadian Mountain Police will be performing a small headstone ceremony for Constable Spencer Heathcote, who perished with another colleague while on patrol in 1901 when their boat sank near Wrangell. Heathcote's body was recovered and buried, though the location has since been lost.

“We're assisting them with their ceremony,” explained Jabusch.

The cancellation will not

conflict with budget season, with a workshop likely to be scheduled on or around May 9.

“We'll still have plenty of time to do that,” Jabusch said.

 

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