In October, Haines residents will vote on a proposed $450,000 draw from the borough’s permanent fund to offset unexpected costs associated with school bond debt.

In past years, the state typically paid for 70% of municipal school bond debt with the municipality responsible for the other 30%. Last year, Gov. Mike Dunleavy reduced the state’s share of school bond debt payments to 35%. When drafting this year’s budget, borough staff had anticipated a repeat. The complete loss of state support for school bond debt left the borough with a roughly $450,000 deficit. In the budget passed earlier this month, the assembly offset the reduction using a combination of capital funds and CARES Act money.

Assembly member Zephyr Sincerny, who proposed the measure, said it makes sense to use a small amount of the total permanent fund, roughly 5%, to cover unanticipated costs.

At the time the ordinance was introduced, Sincerny said a draw from the permanent fund would allow the assembly to reverse some of the cuts it had introduced to operating and capital funds this year to cover unanticipated costs associated with school bond debt and COVID-19.

The ordinance approving the ballot measure passed the assembly, 4-2, on Tuesday with members Jerry Lapp and Paul Rogers in opposition.

“We did pass a budget where we did cover school bond for this year. We don’t need to take that out at this time,” Lapp said. Since the debt is already covered, money taken out of the permanent fund would go into the borough’s reserve account where it would stop collecting interest.

Assembly members Brenda Josephson and Gabe Thomas said they supported the ordinance because the decision should be made by voters, but both expressed reservations about depleting the permanent fund. Josephson said the borough should work toward growing the fund through land sales.

At the same assembly meeting, members approved a lease agreement with Alaska Marine Lines (AML) for construction of a new roll-on, roll-off ramp at the Lutak Dock. AML has been using the crumbling Lutak Dock face to unload cargo, but the dock is at the end of its life. The borough has applied for several grants to renovate both the dock face and the roll-on, roll-off facility, as well as submitting a funding request to the Alaska Legislature. So far nothing has come through.

Under the agreement with AML, the company will pay for the construction of a multi-million-dollar roll-on, roll-off facility on a parcel of leased land. In exchange, AML will receive preferential berthing rights at the facility and a discount on wharfage.

The assembly also introduced an ordinance that would place a proposition on October’s ballot to allow police emergency response outside the townsite and use general fund money to reimburse the townsite for police response. If approved by voters, the ballot measure would formalize a resolution passed by the assembly in December. The assembly will take public testimony on the ordinance on July 14.