The city ended the last year with a million dollar surplus in its primary operating budget — but several of the funds that pay for utilities are in worse shape, and will likely require more utility rate increases.
That was the message city finance director Jay Sweeney delivered to the Sitka Assembly at its meeting on Tuesday night (10-28-14).
Sweeney told the assembly that Sitka ended fiscal year 2014 with a $1.01-million surplus in the general fund, which pays for much of the city’s day-to-day operations, including administration, police, fire, and public works. (It doesn’t include departments like water, electricity, or harbors — they have their own funds, and we’ll get to those in a moment.)
Sweeney reminded the Assembly that the city had expected to end the year about $1.4-million in the red, so Sitka really wound up with about $2.5-million more than it budgeted for.
That surplus came in part from higher-than-expected sales tax receipts (about $657,900 more than expected). The city also spent $860,300 less than expected.
The total general fund budget is about $27-million annually.
The assembly had already decided to devote any surplus to the infrastructure sinking fund and the city’s permanent fund, so the $2.5-million will be split between the two.
But when it comes to the enterprise funds, which pay for specific utilities like water or wastewater, Sweeney said the outlook is less rosy. The wastewater fund in particular is “bleeding cash,” he said — and city staff will likely recommend another utility rate hike to put it on a more stable footing.
“For the next fiscal year, as kind of a pre-announcement, additional planned increases in electric rates, water rates, wastewater rates, harbor moorage rates [are necessary] in order to achieve planned goals,” Sweeney said. “And I’ve mentioned this before, but we should begin to think as a municipality, and I urge this with the strongest possible recommendation, that we should look annually to some type of a rate adjustment in each of our major funds.”
In other words, Sweeney said, the city should be raising rates on all utilities, every year — even if it’s just by half a percent — to keep up with costs and avoid having to play catch-up with double-digit increases.
Sweeney said he’ll bring a specific proposal on rate increases to the assembly later this fall.
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It was a relatively speedy seventy-five minute meeting. In the only other major agenda item, the assembly authorized a contract with PND Engineers of Juneau to begin designing the new transient float planned for Thomsen Harbor.
The Assembly also heard from Jeff Comer, the new CEO of Sitka Community Hospital, about possibilities opening up in telemedicine.
Comer said he’s reaching out to other hospitals in Southeast to consider potential collaborations.
“For example, we need a dermatologist here in this community,” Comer said. “Now we have 8,000 people. We cannot afford a dermatologist in Sitka, Alaska. Juneau really can’t afford one. Petersburg can’t. Ketchikan can’t. [But] when you combine us together, we can afford a dermatologist. Through telehealth capabilities, that dermatologist can really live anywhere. They can be here, they can be in Ketchikan. But the beauty is, we can share the salary with these different hospitals.”
The assembly ended the meeting by assigning roles for the coming year: Matt Hunter was named deputy mayor, a role he filled last year as well.
Assembly member Phyllis Hackett declined to be nominated for deputy mayor. But she couldn’t avoid being drafted into the role of vice-deputy mayor. Her colleagues voted four to two to give her that role, with Tristan Guevin and Ben Miyasato voting for Miyasato, instead.
