Where an extra $151,000 for borough employee wages and benefits will come from is a concern for some assembly members, though Haines Borough manager Mark Earnest said the municipality would be able to sustain the increases if the assembly approves a recently renegotiated union contract Tuesday.
The assembly will decide Tuesday whether to approve a package of raises and health insurance compensation for unionized borough workers that would increase the budget by about $151,000 in the current fiscal year.
Earnest said the money would come out of several fund balances, including the townsite service area fund, areawide general fund, ambulance/fire funds, water/sewer funds, ports/harbors fund, and economic development/tourism funds, all of which are running deficits in the present fiscal year.
But assembly member Debra Schnabel said in an interview this week taking money out of the fund balances is not an option for her. “I’m not willing to pay for ongoing operating costs out of fund balance,” she said.
Schnabel said the assembly asked last year that the budget process be synchronized with the union negotiations to avoid a problem like the present one, but that request went unheeded.
“During strategic planning, we acknowledged the budget process was not in sync with the negotiations, but we’ve done nothing to try and synchronize them or streamline it. And now we’re in a position where we passed the budget without accommodating for increases,” she said.
Earnest said the administration knew before the union negotiations started that there would be increases. “We did recognize there were going to be increases... It was acknowledged internally that there would be some adjustments that would come out of this. I think in the grand scheme of things, they’re pretty minimal in terms of the cost impact to the borough,” he said.
Schnabel said Earnest should “get creative” in finding an alternative to dipping into the fund balance for coming up with the $151,000. Wherever that money comes from, it needs to be sustainable, she said.
“In my opinion and my financial philosophy, you do not pay for salaries and wages out of fund balances or non-sustainable revenue sources,” Schnabel said.
Assembly member Norm Smith said coming up with an extra $151,000 after budgeting was a “real blow.” When asked if he believed the raises are justified, Smith said the question was irrelevant. “What are we going to do, say no and everybody quits and sues us?”
“We closed the pool because we didn’t have enough money to keep the pool open, and now we’re going to spend $151,000 on raises?... Maybe we’ll close the library and take the $151,000 out of that,” Smith mused.
Assembly member Dave Berry said the $151,000 in extra costs was news to him. “That’s frustrating. We passed the budget to find out we have to increase (it by) $151,000.”
The assembly will review the negotiated agreement at a finance committee meeting at 5 p.m. Tuesday before the assembly meeting.