The Haines Borough areawide general fund is earning more and spending less than budgeted this fiscal year, according to a recent financial report for the first three quarters of the fiscal year, July 1, 2020 through March 31, 2021.
“For the first seventy-five percent of the year, our areawide revenues are eighty-one percent (of budget) and that’s due in part to the fact that sales tax has been better than anticipated,” chief fiscal officer Jila Stuart said at a May 25 Haines Borough Assembly meeting. “The expenditures for the areawide general fund are at sixty-eight percent of budget.”
The end result will be less deficit spending than previously anticipated, according to Stuart.
Last year, the draft budget released by then-manager Debra Schnabel anticipated a 40% reduction in sales tax. The assembly at the time had Schnabel redraft the budget with a 50% reduction, but so far, sales tax for the year is tracking closer to Schnabel’s original estimate.
“I do think no one knew how bad things would be in (the current fiscal year),” Stuart said in an interview Tuesday. The pandemic had just started at the time the assembly was drafting the budget in 2020.
“It was new territory for everyone. As it turns out, sales tax revenues are higher than expected,” Stuart said. Factors that may have bolstered sales tax include CARES Act funding, large construction projects last summer and the shift to collecting sales tax from online sellers, she said.
Other borough revenues are lower than expected as a result of the COVID-19 pandemic.
“Rents are down from budget primarily due to Chilkat Center rents which are budgeted at $20,000 for the year but only $5,340 was collected in the first three quarters,” Stuart said. Similarly, library and pool user fees are lower than expected. Both facilities were closed for an extended time during the pandemic.
“Business license fees are down due to tour permits,” Stuart said. Haines saw no cruise ships in 2020 and few independent travelers as a result of COVID-19 travel restrictions. The borough didn’t collect tour permit fees that summer.
Borough investment income is down, the result of very low interest rates which are also fall-out from the pandemic, according to Stuart.
Areawide spending is lower than expected, primarily the result of position vacancies. For the past fiscal year, borough clerk Alekka Fullerton has also been serving as interim manager with a 20% pay increase.
“Payroll expenditures were roughly $110,000 less than budget as a result of the vacant clerk position,” Stuart said, adding that other contributing factors included the planning and zoning tech vacancy, under-budget building maintenance and repairs, and work orders charged out to FEMA.
Both revenue and expenses are on track to be higher than budgeted for the borough’s townsite service area fund, according to the same financial report. By the end of the third quarter, the borough had brought in 84% of the revenue budgeted for the year, largely due to better-than-expected sales tax revenue. Expenditures by the end of the third quarter were 81% of the amount budgeted for the year due, in part, to increases in standby and overtime hours for police.
The current fiscal year ends June 30.