The Assembly has balanced the FY17 budget by drawing from savings, increasing rates, and making cuts. But the solutions for closing the deficit may not be possible next year. (Flickr Creative Commons)

Times are tight in Sitka, but the Assembly has managed to balance the budget. The deficit was as high as $700,000 in March, but shrunk like a candle over the subsequent months to zero. How? Through combination of cuts, rate hikes, and money in reserve that may not be around next year. KCAW’s Emily Kwong has more on this year’s budget balancing act and why next year will be even trickier.

Downloadable audio.

(Sound of cash drawer being opened)

You are now inside the cash register of the City of Sitka and I’m going to take you on a little tour.

(Sound of change being counted)

The Assembly has been noodling around in here for nearly two months, holding four special meetings and building off six months of work by the Citizens’ Task Force to close the FY17 budget gap. The good news? They’ve done it!

But, as Assemblyman Matthew Hunter said at their May 3rd meeting, it’s not without some casualties. “We’ve cut 3 positions this year. We’ve cut some services. And it’s been emotionally hard for me, which kind of surprised me. I like to think I’m logical, but it hurts to make those cuts and see jobs disappear. Even if they’re vacant, those are jobs in Sitka. Those are futures, people living here, making money and raising families,” Hunter said.

Now by cut, what the city really did was consolidate. The positions of Parks and Recreation Manager and Buildings and Facilities Manager, previously held by Lynne Brandon and Chris Wilbur, were merged. Sitkan Michael Colliver is the new hire. The Assembly won’t hire a new Assistant Fire Chief in Al Stevens stead. And one police officer is being reassigned as a detective, going down to half time.

The draft budget also reduces non-profit support by $89,000, snow removal, janitorial, and other public works operations by $250,000, and zeroes out funding for the Ride (which faced a major shortfall last year).

Connie Sipe is with the Center for Community, which oversees the largely grant-funded public transit system. Right now, the Ride runs buses from 6:30 in the morning until 7:30 at night, but those hours may be cut down. “We may have to half hour in the morning or a half hour at night. That’s the first thing we’ll do, is not eliminate the service, but figure out how we can shave a little bit,” she said.

A few special requests did make it on to the till, however. That includes $65,000 for the assessing department to hire a temporary employee. Assessor Wendy Lawrence estimates that Sitka is missing out $1 million a year from undervalued property. Until the city can afford new software, she needs another set of hands to help bring taxes in line with market value.

Speaking the backlog of undervalued properties, Lawrence told the Assembly, “What we have now is a car without an engine. I have a system where I can put things into, but it’s all done manually and I’m the engine.”

The Assembly also voted “yes” on $40,000 to rebuild the community playground in Crescent Harbor, reasoning it was a deferred maintenance issue, and $40,000 for rewriting Sitka’s comprehensive plan.

The Assembly voted “no” on a new phone system. Assemblyman Steven Eisenbeisz, who runs the outfitting store Russell’s, said, “At my business, I wish I had phones that were 13 years old. Mine were made in 1992.”

Electric rates will increase by 5% and both water and wastewater fees by 1%. But it was a citizen, Matt Donohoe, who waited over two and a half hours for persons to be heard, who turned the tide on a proposed 6.2% increase in harbor rates.

Mayor Mim McConnell: Any public comment? Thanks for waiting Matt.

Donohoe: Thank you guys for your service. This is excruciating. I think that in the next five years you’re going to see a very different fishing fleet here in Sitka. It’s going to be vastly changed. It’s going to be because of the actions like this, the 6.2% increase.

It will take an ordinance, but the Assembly voted to curtail the rate increase to 5%. They also approved a recommendation by the Citizens’ Task Force to transfer $100,000 from the city’s share of the raw fish tax to the harbor fund.

The city won’t be imposing any furloughs. That proposal didn’t gain traction in union negotiations.

Over the phone with KCAW, City Administrator Mark Gorman said that local government will definitely have a smaller footprint on July 1st. “I hope when individuals encounter those diminished services they will have an understanding of why they’re no longer there,” he said. The biggest reason for this, of course, it’s the state’s fiscal crisis. Sitka will receive 35% less state funding than last year.

But the second reason is simple math: Sitka cannot afford the cost of its infrastructure. To close the FY17 budget gap this year, some significant transfers took place: $1.6 million from the general fund to the electric fund to stabilize rates, $1.3 million from previous years appropriations for capital projects, and $1.1 million from the public infrastructure sinking fund for public works. That’s a lot of money for patching holes — money that won’t be there next year.

Due to this, Gorman said FY18 deficit will be even more difficult to overcome.  “If the tealeaves are correct as we read them in City Hall, next year is going to be twice as tough. So, we can’t really stop right now and take a deep breath and say, ‘We’re done.’ The heavy lifting is about to begin.

But, Gorman added, while walking down the street last week (the sun was out after all) he was pleased to see Lincoln Street bustling and stores open. “We’ve got a great community. We’ve got tremendous assets here and we’ve got a can-do attitude. So, we’ll get through this. But there’s going to be a couple rough years,” he said.

Mayor Mim McConnell said that, although the Assembly has made several budget decisions already through these special meetings – in years past, all this discussion happened during the regular meetings – the public is still welcome to weigh in. She said, “Just because we’ve made these decisions, doesn’t mean we can’t change our minds.”

She added, “I definitely expect people to speak up because, after all, it’s their city.”

The Assembly will have their first reading of the FY17 budget tonight at 6 p.m. at the Sealing Cove Business Center. Assemblymen Matthew Hunter and Bob Potrzuski will be absent.