The Sitka Assembly has taken its last informal look at the 2014 budget, and is ready to move on to a vote.
The assembly met in a third-and-final work session Thursday night (5-9-13) to go over the $25-million General Fund — the account that pays for all city services that don’t charge their own fees, like utilities.
The balanced budget with a $38 surplus is gone, but so is its author, former city administrator Jim Dinley.
Under the guidance of interim city administrator Jay Sweeney — who is also Sitka’s finance director — the assembly gave that balanced budget a reality test, with mixed results.
Before moving to the General Fund, the assembly gave the hospital budget a quick check-up. Admissions are up 18-percent, outpatient procedures up 42-percent, emergency room visits up 13-percent, and 21 babies delivered so far this year, with 23 more on the way.
Hospital CEO Hugh Hallgren worked hard to temper his enthusiasm.
“We don’t want to confuse the illness of the community with the success in the hospitals. Believe me, that’s not the way we think. What we’re thinking is that we’re providing services that mean people don’t have to leave Sitka to get their health care somewhere else.”
This is a significant contrast from the not-too-distant past. Assembly member Mike Reif remembered.
“It wasn’t too many years ago the community was questioning whether it was a viable institution to retain. It was a burden to the city. Under your leadership and the team you’ve put together, there are a lot of compliments coming from me, and from what I hear.”
Halgren called the hospital’s a “Good News Budget.”
Over the next four hours, the news was not quite as good, as the assembly began to dissect a budget that had been balanced to $38 on the day former administrator Jim Dinley left his post last month (April 2013).
First problem: Hiring a new administrator is expensive: $30,000 to recruit and interview candidates, and fly the finalists and spouses to Sitka. Throw in $25,000 for moving expenses, and the budget is in now showing a deficit of $50,000 just to replace the person who wrote it.
Second problem: The school district submitted a budget $67,000 in the red, hoping the assembly might cover it on the better-than-likely chance that Secure Rural Schools funding will be reauthorized in Congress.
There was consensus on the assembly to cover the shortfall in the schools.
But these increases, in a budget of over $25-million, don’t really matter that much. In the words of assembly member Thor Christianson, statistically speaking, “the budget is still balanced.”
Dig a little deeper, and there are bigger concerns. For instance, public works director Michael Harmon has only $200,000 next year to repair and maintain Sitka’s roads. He’s got $313,000 to totally replace two streets. The grand total for roads is half of what Harmon already considers insufficient.
“We’re usually around $1-million. This year combine the two together, we’re at $513,000.”
Harmon said the actual figure to sustain Sitka’ existing street program was more in the neighborhood of $3-million.
The budget was starting to look a lot less balanced to Mike Reif.
“I think we as an assembly have to start asking the serious questions. There are lots of needs. The school is a big need, a very important need. Do we want to go back to gravel? Do we want to tell our citizens? That’s the question we have to ask. We have to be honest with them. We just can’t keep inadequately funding our infrastructure and say we’re balancing our budget. We’re not. We’re fooling ourselves.”
The gap between need and budgeted amount was not limited to roads. Phyllis Hackett was upset that the Community Development fund — the money distributed to local non-profits — was only $120,000. She thought the amount was embarrassing considering the size of the social service network the city relies on.
Jennifer Robinson, executive director of the Sitka Chamber of Commerce, felt the same way about the Sitka Convention and Visitors’ Bureau. She read a resolution asking to boost that organization’s funding to $350,000.
The assembly also identified unmet needs in the Police Department, and some accounting that didn’t seem to add up in Search and Rescue — a $9,700 charge to the internal service fund for information technology services. Basically, a computer network.
Assembly members Phyllis Hackett and Thor Christianson objected.
Hackett – And it doesn’t even seem like they have a place to have that infrastructure physically.
Christianson – They’ve got one laptop, and it isn’t even connected to a network.
Hackett – I think that’s something that’s really misrepresented.
By the time the assembly had reached consensus on adjustments to the budget that they felt were critical, Mike Reif pointed out that they were now in a $500,000 deficit.
Despite four hours of work, members seemed resolved to be more straightforward about the realities of the problems facing Sitka.
“We need to be a lot more creative in either funding, or finding ways to save. Whether that’s combining our maintenance with the schools, combining administration — something. We’re going to have to figure it out, because we’re going to continually get these requests from the schools, the Historical Society, the SCVB, everybody. We’re not getting better. We seem to continually take the dive down. We’re not going to get there this year. We have to be a lot more strategic, and a lot more bold.”
And this is Matt Hunter:
“Our budget is unsustainable. I agree. We can make ends meet next year, but it’s at the expense of future years. I think any leftover money we have beyond these necessities we’re talking about we need to save. Infrastructure sinking funds are a good idea; reserves are a good idea. But this summer and next year I really hope we can have another visioning session. It’s the only time we’ve looked at the future. Because all of us are so busy. Our meetings take four or five hours, and we just don’t have time structured currently to deal with these long-term issues. Maybe we need a long-term planning commission? That’s off the point — I’m just saying we need to change how we operate to face these problems.”
Interim administrator Jay Sweeney called the work session a “first long pass” through the General Fund. He said the Finance Department would try to incorporate some of the assembly’s suggested changes, and present a budget for action at the group’s next regular meeting on Tuesday May 14.