On Tuesday, the Haines Borough Assembly introduced the budget for the fiscal year beginning July 1 and began discussion of changes necessary to reflect the stark revenue realities of COVID-19.
Borough manager Debra Schnabel’s budget estimates a 40% reduction in sales tax revenue for this year and makes a series of cuts to offset the reduction, including a one week furlough of all employees, reduced hours for a number of positions, a travel freeze, summer closure of the pool, a 20% cut to HEDC funding and closure of the Mosquito Lake Community Center. Even with cuts, the roughly $13 million budget requires hundreds of thousands from savings accounts to cover expenses.
At past meetings, several assembly members had expressed dissatisfaction with the current draft because it does not account for a greater reduction in sales tax revenue and does not cut enough to compensate.
At Tuesday’s meeting, assembly member Brenda Josephson introduced a motion to direct borough manager Debra Schnabel to create an alternate draft of the budget that accounts for a 50% reduction in sales tax revenue without making adjustments to other revenue sources. The motion passed unanimously.
Josephson said she was initially planning to ask for a 60% reduction, but she wanted to remain hopeful. She said she thinks creating a new budget “from the ground up” will allow borough staff to view cuts in a holistic manner, which is a better way to find efficiencies than having the assembly make cuts to the existing budget.
Several assembly members asked that Schnabel keep in mind the distinction between essential and nonessential services when looking for areas to cut.
Assembly member Gabe Thomas said he would like to see the budget maintain essential services, like public safety, at a high level. He said other expenditures, like the Haines Economic Development Corporation, could be cut.
Assembly member Paul Rogers said he would support increases to critical emergency response services.
Other assembly members pushed back against this concept.
“A lot of the services that might not be considered essential as far as basic infrastructure are seen as essential parts of living here,” assembly member Zephyr Sincerny said. Services like the library, pool and museum offer employment opportunities and offer the community activities in the winter. Sincerny said although he recognizes the need for cuts, finding a way to keep these services in the budget is important to many in the community.
Sincerny asked that Schnabel provide the assembly with an assessment of what level of property tax mill rate increases would be required to fund services including the library, Chilkat Center and Mosquito Lake Community Center.
Motivated by coronavirus-related budget concerns, the assembly approved a hiring freeze by a vote of 5-1 with assembly member Stephanie Scott the sole “no” vote.
The hiring freeze requires that the manager receive assembly approval before filling vacant positions. The measure is set to expire at the end of the current fiscal year on June 30.
Rogers, who introduced the motion, said personnel costs tend to be one of the largest expenses for government. He said the assembly should examine the necessity of each new hire through the lens of the borough’s current budget challenges.
Scott said she did not think it fell within the assembly’s job description to oversee borough hiring. “We need to behave properly and not tell the manager who to hire.”
After approving the hiring freeze, the assembly voted unanimously to allow Schnabel to proceed with the hiring of Max Jusi as the fifth officer on the police force.
The assembly’s next budget meeting will take place on Tuesday, May 5.