Responding to continuing reductions in major state and federal funding sources and the potential for additional cuts, Haines Borough manager Mark Earnest proposed a handful of service and position cuts to fill a projected $500,000 hole in his $12 million draft budget for the coming year.
Earnest is proposing to cut operation of the pool and museum to nine months per year – a savings of $52,500 – and to reduce the executive assistant to the manager position from full-time to nine months.
In an interview this week, Earnest said he anticipates more reductions next year.
“It is not realistic to assume that the status quo can be maintained... We must approach from the perspective that some combination of reducing existing Borough programs and services, implementing local revenue enhancements and pursuing economic development initiatives will be necessary,” Earnest wrote in a letter explaining his budget recommendations.
Total budgeted expenses increased from $11.3 million last year to a little over $12 million this year. Chief fiscal officer Jila Stuart attributed this to an increase in capital project expenditures, which fluctuate from year to year.
“Some years when we have a big project going we’ll get money from the state for a big construction project, so it tends to fluctuate more than operating expenses,” Stuart said.
Last year, capital projects were budgeted at $594,000; this year, they sit at $1.2 million, Stuart said.
Major projects budgeted for the coming year include $140,000 for deferred maintenance on borough facilities, $100,000 for roads, $110,000 to replace air handling units at the high school, $250,000 for a radio project, and $150,000 for a new dump truck.
Though Earnest is proposing to reduce the mill rate to balance out the recent increase in property assessments, the reduced tax rate would still bring in an additional $111,000 in property tax revenue. Mill rates will be reduced in all 10 areas, with the Riverview and Eagle Vista areas seeing the largest dips, by 2.19 and 2.13 mills, respectively.
Stuart said limiting pool operations to nine months will save about $35,000; the museum cuts will save about $17,500. Curtailing the executive assistant to the manager position will also save a little over $17,500, she said.
Assistant to the manager Darsie Culbeck said he was aware of the change in his position ahead of the budget’s release and that he is fine with it. “I’d much rather have a nine-month job than a zero-month job,” Culbeck said.
Earnest said he will discuss with Culbeck how the 25 percent reduction will work, whether it means taking three months off at once or working shorter shifts year-round.
Museum director Jerrie Clarke said she was surprised by Earnest’s decision. “I was a little blindsided by that, to tell you the truth,” she said.
Last year the museum received $192,860 from the borough. This year, Earnest is proposing a little over $175,000, a 9 percent reduction.
Because the museum is a component unit of the borough, the museum’s board ultimately decides when to close the museum, Clarke said. Earnest’s three-month cut is merely a suggestion in this respect, Clarke said. The board will have to decide how to deal with the cuts and may implement fundraising efforts to try to recoup some of the lost revenue, Clarke said.
The areawide general fund is operating at a $280,000 deficit under Earnest’s budget, but the borough is still waiting to see whether it will receive funding from Secure Rural Schools and Supplemental Revenue Sharing programs.
“We expect that some or most of that ($280,000) will be covered by unanticipated revenue, but we’re also going to be watching it very closely. If neither of those funding sources come though, we may be looking at additional cuts mid-year,” Earnest said.
The borough last year received $180,000 from the Supplemental Revenue Sharing program, and a little under $200,000 from Secure Rural Schools,” Earnest said.
The assembly instructed Earnest to set aside no more than $80,000 from the general fund to be doled out to community non-profits. Earnest has included $50,000 in his budget. He also set aside $48,000 for health and economic development-related non-profits, as contributions to those efforts would not come from the general fund.
The borough awarded more than $150,000 to non-profits last year.
Other changes to the budget this year include $40,000 for a land development plan for cataloguing and assessing potential borough land sales, and the addition of the library as a borough department.
Earnest also proposed the establishment of a new energy efficiency revolving loan fund program. Initial projects financed from the program would include the installation of energy efficient street lights and pool lighting.
“There’s lots of time to dig into this, and that’s why it is published in advance. It’s a way to start the conversation... It isn’t in any way, shape or form a final product,” she said.
The assembly will hold its first budget work session at 4:30 p.m. Tuesday in assembly chambers.