Sitkans can now pull back the curtain on the city budget, thanks to new tools available on the municipality’s website.

City Administrator John Leach and Finance Director Melissa Haley joined KCAW for the Morning Interview on November 17. Leach said he has been hoping to make city finances more transparent since he interviewed for his job several years ago. A new dashboard on the city website allows users to see the numbers almost in real time, or as Leach said, “live financial information in your face.” 

However, it only goes so far.

“You’re not going to be able to drill in and find out, you know, how much gas we put in truck number 446 last Tuesday,” said Leach.

Haley said the new tools are both a way to keep city finances transparent and a window into her professional world.

“I live this detail every day,” Haley said. “So it’s nothing kind of new and exciting for me. But it’s detail that people haven’t been able to see before.” 

In addition to the Open Finance tool, a new “Balancing Act” tool allows users to run a simulation of the budget using real numbers. Leach said this should give residents insight into the give-and-take of managing the city’s finances – and share any advice they may have. 

“So they could say I think that the administrator should have less in his budget, and they can click and lower that and they can increase another department,” Leach said. “Or they could decrease all of them. They can really mess around with the numbers there and then submit that simulation to us on it with their recommendations.” 

KCAW’s Erin Fulton contributed to this story.

In the first work session of 2022, city finance director Melissa Haley told the Assembly that things were starting to look a little brighter on the city’s budget front. 

“We’re going from the really significant impacts of the pandemic to a recovery,” Haley said. While the city isn’t financially ‘whole’ yet, Haley said some numbers have started to look more typical over the last year – particularly the city’s main source of income, sales tax returns. 

“Our pre-pandemic levels were close to $5.3 million, and we are at $5.1 million for the third quarter,” Haley told Assembly members. “So you know, that’s pretty impressive considering that our cruise season was very abbreviated last year.”

But predicting how much revenue the city will bring in for Fiscal Year 23 isn’t that easy. Haley said while the city is in recovery, there are still uncertainties – like how much money will Sitka score from the recent federal infrastructure bill? And will the community really see 480,000 cruise passengers this summer? 

View Haley’s presentation here

“Right now we’re hearing in the news every day that cruise ships are being significantly impacted by outbreaks,” she said. “On the ships, we don’t know what our cruise season is going to look like.”

“I would say that right now, what we have proposed here, it’s optimistic as in…we think the recovery is going to continue. But it’s conservative at the same time,” Haley continued. “This budget does not assume a windfall that cruise passengers flood downtown and buy everything out.”

City staff are also concerned with rising costs– the city has a long list of projects to complete, many to repair or replace aging infrastructure. With inflation at historic levels, nationally, the budgets for those projects will rise. 

“So just doing what we do now, without a doubt is going to cost more next year,” Haley said. “It’s already costing us more. We’re also seeing related supply chain issues that that mean that we might not be able to get what we need to get to keep doing what we do. So there’s going to be challenges there, or to get it, we’re going to have to really spend a lot more.” 

And the city has its employees to think about too- all of the city’s labor union contracts are up for renegotiation this year. The city employs around 150 people- 107 are union employees. Haley said those negotiations are coming at a time when the city has, like the rest of the country, struggled with staff retention and high turnover. 

Since it was just a work session, the Assembly didn’t make any budget decisions on Tuesday, but the group will meet several times over the next few months to go over different aspects of the city’s budget in greater detail. It will hold its first special budget meeting on January 27 at 6 p.m.

Editor’s note: This script was amended from the version originally broadcast to include more context around the general fund budget and clarify where money to cover the projected $1.9 Million dollar deficit may come from, including a $1.5 Million surplus from last fiscal year.

The draft of the city’s budget for next year is finally out, but a lot could change between now and when the budget is finalized later this spring. And last week, the Assembly was informed of a mix-up on school funding.

When the Sitka Assembly met on Thursday (3-4-21), the group took a peek at the 66 page document full of fund balances and spreadsheets. The budget is always a lot to digest, but Finance Director Melissa Haley laid out the big question. 

“The bottom line is a $1.9 Million deficit. I think one of the most core decisions we have to make is are we going to be moving forward with the existing level of services and hope that we start seeing recovery to revenue, or do we make significant cuts now?” she asked.

Haley said, as it stands, they’ll have to rely on reserves to balance the city’s general fund budget next fiscal year, and a $1.5 Million surplus from last fiscal year could cover most of the deficit, if approved. The current budget includes very few capital projects, and the deferred maintenance costs for city infrastructure will continue to grow. She said lots of things can change between now and when the budget is finalized, and more concrete information about federal stimulus money and tourism could lead to additional changes.

And those changes can happen unexpectedly. At its last meeting, the Assembly voted to fund the Sitka School District to the “cap” or the maximum allowed by state law: $7,764,150.

In years past, “non-instructional” costs, like activities and travel and maintaining the Blatchley Pool, were funded separately from the cap because they aren’t subject to the same state funding limit. But due to a clerical error, some of the non-instructional funding needs weren’t accounted for in the school district’s full request to the city. So now the schools are short over $500,000 in funding. Superintendent John Holst said that meant travel and extracurricular activities could be on the chopping block. And he apologized to the assembly for the miscommunication around the school district’s funding needs. 

“It’s on me that I didn’t go back and check those numbers inside of that motion that was made on Thursday night,” Holst said.

“I feel badly that we’ve gotten to this point. I think our board members were very much enjoying the relationship that seems to have developed. And we’re certainly not wanting to do anything to jeopardize that. That probably is more important than the budget, frankly.” 

One bit of good news–Holst said they were relieved to discover earlier that day that their insurance costs would not increase this year after all. The district is anticipating laying off teachers and dipping into reserves to cover next year’s budget deficit.

School Board President Amy Morrison said they were trying to figure out other solutions to shore up the difference. They’re hopeful that more federal stimulus money could provide some padding. 

“We are trying to figure out how to go forward from here. We don’t want to just come to you and say ‘Please give us more money.’ We want to figure out what other options we have,” she said.

The Assembly made no changes to the general funding budget or school funding on Thursday, but it will have several opportunities to review the budget and make changes over the next two months. The budget will likely be finalized in May.