Haines Borough Assembly members got their first look at manager Mark Earnest’s budget for the coming year Tuesday. The $13.9 million borough spending plan is balanced by using $288,000 in reserves and by raising property taxes slightly.
Its total includes spending $2.9 million in state grants for pending improvements to the Port Chilkoot Dock and trestle. The budget does not include grants to community groups and non-profits, which last year totaled $118,500, plus a $175,000 special appropriation for renovation of the fairgrounds’ Harriett Hall.
Earnest described the plan as “fairly status quo,” saying, “It’s not doom and gloom, but key revenue sources are trending downward or are being phased out.” The proposed tax increase of .29 mills is equivalent to $58 more in taxes on a $200,000 home in the Haines townsite.
Tuesday’s meeting was the first of four scheduled committee meetings on the budget, and was dominated by discussion of library funding. Earnest penciled in $334,507 for the facility, a $10,000 increase from last year, but almost $50,000 less than requested.
Library director Patricia Brown said the increase was to cover two positions – a technology coordinator and a children’s librarian – that have been funded by federal grants for about a decade. The grants won’t be renewed, she said.
“This is one of those deals where a grant-funded position becomes a ‘got-to-have-it,’” remarked assembly member Scott Rossman. “That’s why grants aren’t always a great thing. This kind of thing has been happening for years.”
Member Steve Vick defended the positions, saying the library’s children’s program serves almost every family in town and helps keep families here.
“The library is busy not because we’re increasing our funding. We’re increasing our funding because people are using the library all the time. I don’t see that as a problem. I see that as a sign that Haines is doing well,” said longtime library board member Heather Lende.
Lende also cited the borough’s fund balances as a possible source. Earnest’s budget projects a balance of $2.13 million in the areawide general fund and a balance of $1.61 million in the townsite service area general fund as of June 2011.
Earnest said the two funds should maintain a reserve equivalent to what’s needed to run the borough for six months. At current levels, fund balances won’t meet that goal, he said. “We’re below that ideal number. We don’t want to rely on (fund balances) for operations.”
The assembly also discussed proposed funding amounts for the Sheldon Museum ($188,800), swimming pool ($185,000) and Community Youth Development program ($22,646). The contribution to the museum is about $3,300 less than requested.
Assembly members were scheduled to discuss the borough’s contribution to local schools, but a conflicting school board meeting nixed the discussion. Earnest has penciled in a request by school superintendent Michael Byer for a 3 percent increase, raising the borough contribution to the school’s general fund $50,000, to $1.74 million.
In addition, the borough provides money for school programs including community education ($25,000), hot lunch program ($60,000), activities ($110,000) and snow plowing ($15,000), bringing its total project contribution next year to $1.95 million.
Earnest’s budget includes:
· $660 more per employee for increased costs of health insurance;
· a 30 percent increase in fuel costs;
· a 4 percent increase in sales tax revenues, based in part on rising cost of fuel, (worth $156,000);
· a 3 percent increase in property tax revenues (worth $80,000); and,
· a loss of $80,000 to the general fund due to creation of enterprise funds for the Lutak and Port Chilkoot docks.
In a preface to the budget, Earnest said budgeting will become more difficult in coming years, citing reductions in income in federal secure rural schools funds, raw fish tax, and interest earnings.
“The best available information today suggests that total general fund revenues will decline significantly over the next six years… regardless of the desired level of programs and services, revenue enhancements will be necessary. This can be accomplished through a combination of tax and user fee increases, as well as aggressively pursuing economic development opportunities,” he wrote.
Limitations on general fund revenues include the property tax cap, the elimination of the business property tax, and low user fees and fines, he wrote. Solutions Earnest cited included investing in revenue-producing infrastructure, more effective marketing efforts, selling borough land, eliminating or raising the property tax cap, reinstating the business property tax, a vehicle registration tax, increasing the bed tax, reinstituting a tour tax, and increasing user fees and fines.
Earnest said the borough’s backlog of deferred maintenance is “significant.”
He described his proposed spending from fund balances as a “modest amount” to be used for non-recurring, one-time expenditures and to bridge gaps in operations of some funds. “We may have to take additional steps to curtail funding if the economy takes a serious nose dive,” he said.Budget committee meetings are open to the public. The next one is scheduled for 5:15 p.m. April 19.