City of Sitka faces tough choices, cuts in FY19 budget

Springtime in Sitka has telltale signs: the return of 7 a.m. sunrises, schools of herring, and city staff to the budget table. The fiscal year begins July 1st and the city is facing tough choices, like how to close a general fund deficit of $855,000 and how to manage millions of dollars in capital needs down the road.

Downloadable audio.

Though the budget process this year is the same as always, the challenges are as unique as ever.

At their first budget meeting Thursday night (03-15-18), the city finance department projected a line graph showing state and federal support to Sitka over time. Cast over the heads of the Assembly, it looked like a mountain range — rising and then steeply plummeting from 2015 on. That’s when the price of oil began dropping and the state slid into recession.

Mayor Matthew Hunter told the crowd that this is the biggest obstacle to budgeting in Sitka: How can the city maintain the same levels of service with millions of dollars less in revenue?  

“We’re down $5 million from 2015 in state and federal help. We’ve increased local sales tax and property taxes by about $1 million, or so, in that time. We’re barely making ends meet. When I was first on the Assembly [in 2012] this looked a lot nicer than it does now. You can look at local stuff and make commentary about how our local government is run, but we’re running a much cleaner machine now and doing it with much less outside support than we have in the past,” Hunter said.

In the past three years, the city has cut 8 full time positions. This year, there aren’t any layoffs planned within city hall. Instead, City Administrator Keith Brady has proposed two additional full time employees, one for the library and another for an assistant fire chief.

This bothered Assembly member Steven Eisenbeisz, given the potential for layoffs of within the Sitka School District to close their spending gap. “That causes a lot of heartburn, to know that we’re adding people while they’re subtracting…that doesn’t add up to me. That’s really hard in this budget,” Eisenbeisz said.

City Administrator Keith Brady countered the two positions would alleviate heavy workloads on the shoulders of current staff, especially Library Director Andrew Murphy and Fire Chief Dave Miller.

Miller told the Assembly Thursday night,”Is it a needed position? I wouldn’t come to you unless I thought it was.” He added, “I try not to come up here and ask for money. Never have really, I don’t think. But I think this is one of those things that, if we don’t have it, we’re going to start feeling the pinch in the things we do as the fire department.”

Sitka is at a tipping point. Most of the cuts so far, except for the closure of the library on Sundays, have been invisible to members of the public. But if the city wants to balance the books this year without using savings, they will have to reduce services. The cuts will be visible. The question facing the Assembly is how to balance quality of life in Sitka with the cost of living. Hunter made this plain during a special call-in show hosted by Raven Radio Monday night.

“If we found ourselves unable to pave the streets and unable to mow the grass, we can survive. But it’s just a question of what you want to give up. We could go to an all-volunteer fire department. Well, now it’s another 5-10 minutes before the ambulance shows up. I can think of a few people who would be dead if we had that personally, through my ambulance work. If you don’t pay for the services, you don’t get the services,” Hunter said.

It’s a simple math equation, but a tough choice to make and a different Sitka to live in. Alongside Hunter for the call-in was Chief Financial and Administrative Officer Jay Sweeney and Brady, the new city administrator.

Listen to Raven Radio’s call-in show about General Fund budget here

Part 1 (Monday, March 19th, 6:35 p.m. to 7:17 p.m.)

Downloadable audio.

Part 2 (Monday, March 19th, 7:26 p.m. to 8:01 p.m.)

Downloadable audio.

After working with department heads to trim their budgets internally – a process known as “decrementing” – the spending gap they’re trying to close is $855,000. A third of that is to purchase new air packs for the fire department, approved unanimously by the Assembly the March 15th meeting. The Assembly also voted to eliminate a lobbyist position within the electric department, a $40,000 savings.

Here is the list of cuts so far: FY19 Initial Decrement List -1

Brady stressed on-air that though the deficit seems small, Sitka is facing long-term challenges in the order of millions. Roads need repaving and harbors need repairs, but there isn’t enough money to replace all this aging infrastructure at once. “I believe this year we have about $4.5 million in maintenance we would like to do. We only have $2.3 million to do it. So the rest of it just rolls over to the next year and the next year,” he said.

Sitka faces a snowball of deferred maintenance. Several listeners called in  and wrote in with ideas for new revenue, from a motor fuel tax to a simultaneous raise in property tax and sales tax, but it would ultimately take the action of an Assembly member to bring any of these things forward. Hunter shared he’s working on some revenue ideas currently.

For now, the Assembly will focus on the money they do have. There are three more budget meetings planned into April, every Thursday at 6 p.m. at Harrigan Centennial Hall.

• Budget Meeting #2: Enterprise funds and user rates – March 22nd
• Budget Meeting #3 : Special revenue and trust funds – March 29th
• Budget Meeting #4: Sitka Community Hospital – April 5th 
• A final budget ordinance is slated to appear before the Assembly for first reading on Tuesday, May 8th.

All meetings are open to the public. 

The Assembly must also decide how much of a contribution to make to the Sitka School District, which is the general fund’s biggest expense. On Wednesday March 21st at 6:30 p.m., Raven Radio will host a budget hearing with leaders of the Sitka School District. Superintendent Mary Wegner and members of the school board will be in the studio with KCAW’s Robert Woolsey to take listener calls. E-mail your question to news@kcaw.org or call 747-5877.