Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

Budget: Use savings for economic group, 5th police officer

 


Haines Borough Interim Manager Brad Ryan on Tuesday proposed a budget for the coming year that relies on a hopeful projection of state support and about $500,000 in savings to cover additional police and economic development, using only a smidgen of a tax increase.

Ryan penciled in $95,000 for the new Haines Economic Development Corporation and a 29 percent increase for the police department budget. The increase – $152,000 – includes funding a fifth officer, additional standby hours and overtime hours, and officer pay raises approved by the assembly last July.

Ryan and chief fiscal officer Jila Stuart presented the budget to assembly members Tuesday evening. Here’s a look at the fiscal year 2018 budget highlights:

General fund deficit decrease

What earlier this year was expected to be a $500,000 budget deficit in the borough’s general fund has shrunk to an anticipated $113,664, which will be covered by savings.

The Alaska Legislature is on track to fully fund school debt reimbursement. A veto by Gov. Bill Walker in mid-2016 axed $225,000 in school debt retirement funds that were headed for Haines, forcing the borough to dip into the general fund for that amount.

The state also reduced the amount of community revenue sharing to municipalities across Alaska, an anticipated cut to Haines of $125,000. The Alaska Legislature, however, has proposed a program called “community assistance” that would deliver $406,000 to the borough – around $85,000 more than was received from revenue sharing last year.

Current funding projections are based on budget decisions by the legislature and subject to change. Another unknown is a bill in the state Senate (SB 96) that would cost the Haines Borough School District $175,000. Ryan’s budget is built on keeping the borough’s contribution to the school on par with last year, $1.77 million.

Ryan also said he expects sales tax revenues to increase due to a larger labor force working on borough projects, an anticipated 25 percent increase in cruise ship passengers and two large conferences scheduled to be held here.

Spending from fund balances

The borough has drawn around $500,000 from several fund balances to pay for expenditures this year. Draws will come from the economic and tourism development fund ($81,544), the medical service area fund ($66,113), the areawide general fund balance ($113,664) and the townsite service area fund balance ($240,087).

Given the amount borrowed from the townsite service area fund balance, assembly member Ron Jackson questioned the necessity of the proposed 0.1 mill rate property tax increase in the townsite. The tax will raise an estimated $18,000.

“We’ve taken two pretty big chunks out of the townsite fund balance – almost $500,000 in two years. It just seems you have to start stemming the flow at some point,” Stuart replied.

Although Ryan characterized borough fund balances as healthy, he wrote in an introduction to the budget document, “These fund balances are not going to last if we, as a community, do not foster economic development and increase revenue generating streams.”

Personnel

Ryan is proposing to hire a fifth police officer in an effort to decrease turnover on the force. He also proposes a 50 percent increase in officer overtime hours (100 to 150) and nearly doubling standby hours (265 to 500). Wages and payroll increases make up $146,000 of the $152,000 increase of the department budget, set to hit a historic high of $672,304, not including dispatch.

The borough reduced the force from five to four officers two years ago. “When the borough maintains a small police force, officers are perpetually on duty or on call, which doesn’t allow them the freedom to go out the Haines Highway or to Chilkoot Lake with their family,” Ryan said.

Assembly member Jackson questioned the overtime and standby time, noting that the police sought a fifth officer to reduce the number of overtime and standby hours officers put in during the past year.

“That’s kind of fuzzy to me because my thought was if you had another officer you’d have less overtime and people would have a better work-life balance,” Jackson said. “You’re actually adding more overtime with an extra officer budgeted.”

Ryan said officers pushed 300 hours of overtime this fiscal year, which forced the assembly to amend the budget to make up those hours. “The point is that was the budget, that’s not what happened,” he said.

Ryan didn’t refill a part-time office assistant in the administration building and is letting a public works position go unfilled.

Will Hickman, who was hired last fall as public works superintendent, previously worked as the department’s mechanic. Hickman will now do both jobs.

Economic development

Ryan budgeted $81,000 from the economic development and tourism fund balance to help pay for a $95,000 request from the Haines economic development corporation.

Cruise passenger vessel tax

Ryan budgeted $100,000 to continue progress on an interpretive trail.

Revenue generation

Tuesday’s budget discussion also included increasing revenue sources. At the direction of the assembly, Ryan reported the following scenarios:

- alcohol and marijuana tax (estimated income at $60,000 per year with a 3 percent alcohol tax);

- tobacco tax (estimated income at $50,000 per year with an 8 percent tobacco tax);

- tour tax (a four percent tour tax was repealed in 2003, but is estimated to bring in $250,000 annually if reinstituted);

- ambulance fee for service (Haines currently doesn’t charge for ambulance service. Skagway charges $350 and Petersburg charges $300 for an ambulance call and brings in $40,000 annually for those fees); and,

- severance tax (could include taxes on renewable and non-renewable resource extraction).

At the close of the meeting, Lende suggested the assembly discuss closing local bars earlier.

“Right now our bars are only closed from 5 a.m. to 8 a.m. by law. That’s the state law…I kind of wonder if it lines up at all with the police calls or domestic violence calls or whatever’s going on if it’s in those time frames. It might also be worth looking into,” Lende said.

In an interview after the budget presentation, Jackson said he’d like to see the assembly discuss some of those revenue-generating methods, specifically a cigarette and alcohol tax. He also said he’d like to hire a new police officer.

“In general I’m willing to try it out and see how it works and if we don’t like it we can always change, but give it a year’s try and see what kind of results we get,” Jackson said.

He doesn’t want to approve the mill increase and said he’d rather take the difference out of the fund balance.

Jackson, along with Lende, said they want to know more about what the Haines economic development council would do with $95,000.

Lende said she had concerns about the police budget. She said it’s not clear to her how more money in the police budget will solve problems such as alcohol and opioid abuse, addiction, the lack of a trooper and social service positions.

“I don’t want to pay for more guns and trucks,” Lende said. “I don’t think that’s going to solve those problems.”

Assembly member Tom Morphet also was critical of adding police. Morphet said the police had a five-member force here for decades, and that didn’t stop a high rate of turnover.

Fiscal officer Stuart said at the end of the fiscal year starting in July, the areawide fund balance is expected to be $2.5 million. The townsite service area is anticipated to be $972,147.

The assembly will have an opportunity to discuss and make amendments to the budget. At least two public hearings will be held on the budget.

 
 

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