Assembly overviews borough operating budget

Finance Director Jody Tow presented highlights from the operating budget for fiscal year 2015-16 at Monday's regular assembly meeting.

Borough Manager Steve Giesbrecht included a letter with the budget that gave an overview of the borough's financial position. Giesbrecht said that the budget is balanced, but decreased funds from the State and Federal governments are anticipated and the budget reflects that with an overall 1.5 percent decrease from the FY2014/15 budget. Though there will be no changes to services offered by the borough during the next fiscal year, Giesbrecht said this may not be the case in the future.

Overall, the budget was well received by the Assembly. A portion will be further examined by the Assembly in a special meeting tomorrow morning at 8 a.m. (see sidebar).

General fund budget

The general fund budget is down 2.59 percent from last year. The biggest changes come from state grant and state shared revenue, which are both anticipated to be down considerably from last year. Tow said proposed budget numbers reflect that. The line-item State Revenue Sharing is budgeted this year at 50 percent of last year's actual, $254,847 versus $534,000 last year.

"I don't know if anyone listened to the governor's state of the budget, but he said that they will be starting to phase out the community revenue sharing. So 50 percent is definitely a conservative number for revenue," Tow said.

Giesbrecht said that 50 percent cut is an estimate by the borough, and it's possible that more monies will be allocated by the state this year.

"What we've heard the governor say, and what we've seen, is actually a lesser cut than 50 percent for this year," he said. "But the legislature hasn't weighed in yet."

Regarding the general fund, one of the biggest budget increases is for the borough attorney. Some $65,000 is budgeted under the FY15/16 proposal, up 44 percent from last year. Tow and Giesbrecht explained that there are increased expenses associated with the transition from the City of Petersburg to Petersburg Borough, including several ordinances which must be looked at by the attorney in accordance with the charter.

Departmental budgets

Tow explained a change that lead to shifting funds for building maintenance from a centralized fund to the budgets of several departments.

"This year the building maintenance department was dissolved and they're being billed to other departments," she said "So you're going to see in some of the other departments-like Parks and Rec, the library and elderly housing and community development-an increase to their payroll budgets because we shifted that staff to those other departments."

Of note, the Public Works budget increased $83,000 for personnel related to the changes. And the Community and Economic Development budget increased $113,000 for personnel to account for building inspector Joe Bertagnoli's new position. Several other departments saw higher budgets for building maintenance supplies as a result of this change.

Giesbrecht said the change was more about increasing efficiencies than saving money. Certain departments have greater maintenance needs and the change will give department heads more ownership over the maintenance staff reporting to them.

A proposed $16,000 budgeted for communications upgrades at the library gave some assembly members pause. Giesbrecht and Library Director Tara Alcock explained that the wifi at the library is being taxed especially by users accessing it with their mobile devices. Overall usership at the library is up as well.

"And what we're hearing is, primarily lots of complaints from people with mobile devices that are using our wifi up there, that it goes really slow," Giesbrecht said.

The $16,000 would allow for additional routers to improve the speed of the current service. Assembly members Bob Lynn and Kurl Wolhueter asked about securing the network with a password to prevent automatic downloads on mobile devices or the possibility of requiring a small fee to access the wifi.

Alcock said 80 percent of their communications costs are subsidized by E-Rate, a federal communication subsidy, which requires the internet services to be free to users.

Enterprise Funds

Tow also reviewed the budgets for each enterprise fund. Two of seven enterprise fund's unrestricted fund balances-the sanitation fund and the assisted living fund-fall below the desired range outlined in the budget policies approved by the assembly last November. The budget policy established reserves for each fund should equal six months of operating expenses at a minimum.

The sanitation fund currently has a $307,340 unrestricted funds balance, almost $317,000 shy of their six-month operating expenses. The unrestricted funds balance in the assisted living fund is about $389,000 shy of their target.

A scheduled rate increase of 2 percent a year until 2020 will help increase the unrestricted fund balance of the sanitation fund. As will efforts to continue increasing the amount waste sent out as recycling, which costs considerably less, versus baled waste. Non-critical projects will also be deferred until the fund balance is increased.

The other five enterprise funds-electric, water, wastewater, harbor and elderly housing-met or exceeded the goals set out in the budget.

Approved by the assembly

• After being amended to address only Mitkof Island, an ordinance providing two new sections of municipal code governing parking regulations and fines for violations was passed unanimously on its third and final reading.

• On its second reading, the assembly unanimously approved an ordinance providing for a Joint Thomas Bay Power Advisory Committee with Wrangell. The committee will be assembled and called upon to advise on future power projects affecting both communities.

• Discussion of an ordinance that would exempt the owners of certain farm structures from paying property taxes on those structures will be postponed until June.

“I propose to postpone further discussion on this ordinance until the first meeting in June given the way it is written right now—it’s inclusion of people growing and producing marijuana that would include them—in hopes of waiting for the state to potentially rule in legislative session on this,” said assembly member Jeigh Stanton Gregor, who proposed the ordinance in a meeting last month.

The motion to postpone passed 5-2 with members Nancy Strand and John Havrilek opposing.

• Known changes to the FY2015 budget for the Public Library and Petersburg Municipal Power and Light (PMPL) were unanimously approved on first reading by the assembly. Some $8,000 for professional services and $3,000 for continuing education was approved for the library, monies which will come from donations and grants. PMPL requested $25,000 for a needle valve emergency repair at Blind Slough Hydro and a transfer of $5,000 into a hydro substation upgrade.

• The assembly unanimously voted to authorize a professional services agreement with PND Engineers for $59,974 for engineering services on the Scow Bay pump 1 station upgrade project. Funds for the project will come from a forthcoming $400,000 loan from the Alaska Department of Environmental Conservation, the application for which is in the final stage of review according to Chris Cotta, assistant public works director. In the meantime invoices can be paid through the Wastewater Department’s reserve funds, which currently total $1.2 million.

In a letter to the Borough, Cotta explained the pump station was buily in the early 1980s and “is being pushed beyond its design capacity resulting in a need to bypass the station during period of heavy flow.” He also cited upgrades are needed to the pumping system and controls.

• As part of the consent agenda, the assembly authorized four 5-year annual lease rate renewals with long-term lessees based on the current assessed values of the land. The annual rate for Curt and Kristi Birchell dba AK Chevron was adjusted down from $4,100 to $3,890 for their tidelands lease of 4,183 sq. ft. on portions T-37 and T-38. Stikine Services annual rate was adjusted down from $5,200 to $4,960 for the tidelands lease plat # 2000-5. The aforementioned were adjusted down due to changes in the assessed value of the land.

The new annual rate for Marwin, Inc. was increased from $2,847 to $4,170 for the tidelands lease Parcel A on plat 95-7. For the tidelands Parcel B of plat 95-7, the rate for lessee Yancey L. Nilsen was increased from $1,482 to $1,932. The increases reflect changes in utilities services.