Municipal budget season is always fraught with uncertainty, but even more so as cities grapple with the unanticipated, and difficult-to-predict, additional costs that a global pandemic could add to their bottom line.
That’s what the Sitka Assembly discussed in a special meeting on Thursday (4-2-20), when it met in a video conference, to review the city’s enterprise fund budgets.
The assembly typically passes a budget in May for the following fiscal year. But now that schedule has been pushed back a couple of weeks, and some of the numbers are likely to change. Controller Melissa Haley said they’re anticipating revenue to be down, while the cost of providing services remains the same.
“While we fully acknowledge that in some cases the revenue, those projections, those budget numbers are not going to be on,” she said. “Really what we’re doing here is approving the expense side. We may well have a deficit year in many of our enterprise funds but we still have to keep providing the services.”
And the city is hoping they can reduce the cost of some of those services to Sitkans, at least temporarily. The assembly voted to extend the winter seasonal electric rate through July 1, in an effort to keep Sitkans’ electric bills from rising while many may be suffering loss of employment during the COVID-19 pandemic.
The extension will likely cost the city $1 million in electric fund revenue. Sponsor Thor Christianson hoped to make that money back with federal aid.
“Because of the language of this that is has specifically tied to the COVID-19 pandemic, we have a decent shot of getting this back,” he said, then added, “There’s no sure thing right now, everything is changing moment to moment. And we may have a little more information on that by the next meeting.”
Without federal dollars, however, the electric fund could require a subsidy from the general fund to pay for the dip in revenue. That didn’t sit well with some assembly members, including member Richard Wein, who said the move could cost ratepayers more in the future.
“I understand how it’s a wonderful gesture, I feel that the downside could be even worse and even precipitating even more rate increases down the road,” he said.
And Mayor Gary Paxton said he would vote for it on first reading but may not on second unless the assembly could figure out where to get federal funding.
“I would like to see it in a more limited capacity where it was just an ‘as needed’ kind of deal,” he said. “I sort of agree with Dr. Wein, we’ve got to get the electrical fund stabilized.”
Ultimately the ordinance to ease Sitkans’ electric bills passed on first reading 6-1 with Wein opposed. It will come before the assembly again at the regular meeting on April 14th. The assembly will hold another special budget meeting on Thursday, April 9.
Editors Note: For utility customers who have been economically impacted by the coronavirus, the city has suspended all disconnections for non-payment of utilities and is waiving fees for late or partial payments for the next two billing cycles. Read more about the new policy here.