Sitka has its first budget dispute — even before the official opening bell of the next fiscal season.
The conflict is over $500,000 in potential revenue from the “Secure Rural Schools” program. The on again/off again federal funding looks like it could be on again next year. Traditionally, the money has been split between the city and the school district, but when the Sitka Assembly met for its first special budget meeting on Thursday (12-19-19), there was no consensus about how the funding should be shared — if at all.
Thursday’s meeting was meant to be a 30,000-foot view of the 2021 budget- this early in the game there are still many unknowns. Nevertheless, the Sitka School District remains the biggest expense on the city balance sheet, just ahead of public safety.
Each year the state sets a maximum that cities can give school districts, called the “cap.” It’s up to the assembly how close they want to get to that number- and if they want to give additional money beyond the cap in “non-instructional” funds. This year city staff estimates the cap will be around $7.2 million.
Assembly member Thor Christianson said, in addition to funding Sitka’s schools to the cap, all of the extra anticipated federal funding should go to the school district.
“Expenses are going up yet flat funding is actually- that’s going to wind up costing a teaching position or something,” Christianson said. “So if we wanted to we could say, ‘Okay, if and when Secure Rural Schools comes around, we’re not going to split this with the school district, we’re just going to let them have it.’ We have that freedom as well.”
Steven Eisenbeisz said he didn’t know how they could make that happen.
“While I like that idea and it does remove two or three meetings of the assembly and school board bickering back and forth on what level to give,” he said, “it scares me a little bit only because I don’t know where the money is going to come from.”
Eisenbeisz said giving the full amount as opposed to half to the school district meant $250,000 less for things like critical infrastructure maintenance. Christianson argued that the city wasn’t counting on the Secure Rural Schools money in the budget right now. However, Mayor Gary Paxton said that any funding coming the city’s way will help.
“We’re already under-funding what we should do in terms of capital priorities and taking care of infrastructure,” Paxton said. “Listen, I am pro-school and for funding them so they can operate, but we also have to know that the general fund has some significant challenges as well.”
In other budget business, the city saved money on staffing this year. The city is currently understaffed, with several vacant high level positions open or temporarily filled: Two vacancies in Finance, one in Planning, and eight vacancies at the Sitka Police Department. Some of those positions will soon be filled- interim administrator Hugh Bevan said they hired a new Planner 1 this week.
The assembly also discussed rate increases. Many of the city’s enterprise funds saw no rate increases last year- a decison made by the former assembly that was intended to give rate-payers a temporary break. Member Kevin Mosher was glad Sitkans had a year off.
“I think that was necessary because, as Steve pointed out, we’ve had some hefty rate increases, and I think that that had a psychological impact on the town,” said Mosher. “Taking a break for a year was necessary to say that we’re hearing people. But I do agree that 2 percent [increase] would be appropriate to keep up with inflation. The way I see it, it’s preventing larger increases in the future.”
Currently, the city is considering a 3 percent rate increase in the Harbor Fund, as opposed to the 5.8 percent scheduled increase; 5.5 percent for Solid Waste; either a 5.5 or 2 percent increase for Wastewater; 2 percent increase in water rates; and 2 percent electric rate increase.
The Sitka assembly will hold its next special budget meeting on Thursday, January 23rd.
