The city could see an impact on its bottom line as a result of Governor Mike Dunleavy’s proposed budget. That was the message Chief Financial Officer Jay Sweeney had for the Sitka Assembly at their meeting on Tuesday (2/26/19).
Sweeney presented a memo to the assembly listing both the direct and indirect impacts the proposed budget could have. the direct cuts include the elimination of school bond debt reimbursement, the raw fish tax revenue sharing, and a reduction in base student allocation. That totals just under six million dollars in direct cuts to the city. But that doesn’t include the loss of state assistance in funding the harbors, which varies year to year.
Mayor Gary Paxton said setting the budget is a process and while he thinks this budget pits city against city, he’s hopeful that it will be reworked in the coming weeks.
“This budget doesn’t really make much sense,” said Paxton. “So the thing that we need to do is provide information to our legislators, information on the impact. I suspect there will be some wisdom dispensed in the next 4-5 weeks to change this budget.”
The assembly also heard an update from consultant Sarah Cave- on the negotiations between the city and Southeast Alaska Regional Health Consortium over the sale of Sitka Community Hospital. Cave said that the cuts to medicaid reimbursement included in the proposed state budget could impact the overall value of Sitka Community Hospital, because the hospital receives a large portion of its revenue from Medicaid.
“The proposed purchase price is one that is derived at fair market value,” said Cave. “Fair market value takes all sorts of things into consideration in healthcare. If there were to be a significant game changer as it relates to the state’s reimbursement for healthcare, that could significantly impact the value of the hospital and the transaction.”
The assembly also voted against making appropriations to the FY 2019 budget to the tune of $25,000 that would go toward speeding up the lease review process for projects at the Gary Paxton Industrial Park. The motion failed 3-4 with assembly members Aaron Bean, Kevin Knox, Stephen Eisenbeisz and Valorie Nelson voting against.
They also voted unanimously in favor of a resolution supporting secure rural schools reauthorization- that’s voicing the assembly’s support of federal funding that pumped around $500,000 last year into the Sitka School District. The longtime program was cut from the federal budget in 2015, but was included in President Trump’s 1.3 trillion dollar spending bill in 2018.
In other business, the assembly unanimously approved the sale of a small section of the Sawmill Creek Road right-of-way to the owners of Grandma Tillies Bakery for a parking lot expansion.They discussed the investment committee’s recommendation to diversify the city’s permanent fund portfolio- They also unanimously voted to reappoint Richard Doland and Steve Clayton to three year terms on the Building Department Appeals Board and appointed Stephen Morse to a three-year term on the Library Commission.
The assembly will hold a special meeting to review a draft of the asset purchase agreement for Sitka Community Hospital on Thursday (2/28/19). Raven Radio will livestream that meeting on Facebook at 6 p.m. following Alaska News Nightly.
