The State of the City 2013 - Sitka Mayor Mim McConnell
By Mayor Mim McConnellMay 1, 2013Greater Sitka Chamber of Commerce Presentation*“Providing for today… preparing for tomorrow”
*• FY14 Operating Budget• Our Strengths• Plans for the Future• Comments and Questions“Providing for today… preparing for tomorrow”
“Providing for today… preparing for tomorrow”**We’re in amazingly good shape compared to othercities around the country and in Alaska.*The City and Borough of Sitka has been operatingin the “Black” for years.*Our unemployment rate in 2012 was a low 5.6%.*Sales and Bed tax revenues have slightlyincreased.*We have a motivated citizenry interested increating a healthy, sustainable community.
“Providing for today… preparing for tomorrow”*Decision points to make and a fresh perspective.*What level of sustainable governmental services areyou willing to pay for?*What level of support are you willing to provide theSchool District?*As a community we need to holistically look at allcritical needs together (education, publicsafety, social services) as opposed to only within theconfines of each institution.Future Balanced Budgets
*City expenses are increasing from:*increased health insurance costs,*and general costs of doing business that everyone elseexperiences.*We are currently undergoing collective bargainingnegotiations with two of the three unions representing theMunicipalitys employees. The outcomes of thesenegotiations will have an impact on overall Municipalwages and benefits that we will need to accommodate. Wealso have some employees not represented by unions andwe must also provide for equitable wages and benefits forthem as well.“Providing for today… preparing for tomorrow”Expenses
*Other impacts to the Budget:*School District increased costs and reduced revenueimpact the City budget. The School Board chose totake $900,000 out of reserves which is unsustainablebeyond this year.*Municipal infrastructure continues to rapidly age.*Costs are increasing while our municipal revenues arebasically flat; much of this is due to severelyshrinking State and Federal assistance.“Providing for today… preparing for tomorrow”Expenses
“Providing for today… preparing for tomorrow”**The FY14 budget has been balanced byseverely curtailing spending oninfrastructure repairs.*Key appropriations that should be made inFY2014 for repairs have been deferred.*This is unsustainable and costly in the long-term.Cuts
“Providing for today… preparing for tomorrow”**We will continue to adequately provide for a multitudeof basic and special services for our citizens.*While some service levels may be reduced, no majormunicipal service areas have been eliminated in theirentirety.*Should actual revenues fall short, then we will be atthe decision point to consider expense reductionspossibly including decreased staffing.Cuts
“Providing for today… preparing for tomorrow”**The City staff and Assembly are addressingunder-funding of several of our sinkingfunds.*Various Master Plans call for future feeincreases.*Rate increases will be seen forwater, wastewater treatment, harbor, andelectric (partly for bond covenants) utilities.Planning
“Providing for today… preparing for tomorrow”**The City and Borough uses the ClimateAction Plan and adopts itsrecommendations when feasible.*The Assembly has had two visioningsessions during the current fiscal year andplans to continue working on goals thatwere identified.Planning
“Providing for today… preparing for tomorrow”**Blue Lake Hydroelectric Dam project: largestinfrastructure project in the history of the City andBorough of Sitka.*Replacement of ANB Harbor;*Renovation of the Centennial Building and its parkinglots;*Resurfacing of the airport runway;Major Infrastructure
“Providing for today… preparing for tomorrow”**Construction of a new breakwater in the WesternChannel;*Resurfacing of our State Highways, both HPR andSawmill Creek Rd.*These projects are funded from varioussources, Federal, State and Local, and all areexpected to provide a short term stimulus to ourlocal economy.Major Infrastructure
“Providing for today… preparing for tomorrow”*Consolidated Operating Budget contains operating budgets for*Sitka General Fund and Permanent Fund;*8 Enterprise Funds (Electric, Water, Waste Water, SolidWaste, Harbor, Airport Terminal, Marine Service Center, andSawmill Cove Industrial Park);*3 Internal Service Funds (Management InformationSystems, Central Garage and Building Maintenance);*4 Special Revenue Funds (SE Alaska EconomicDevelopment, Revolving LID Fund, Guarantee Fund, andLibrary Endowment);*1 Fiduciary Fund (Rowe Trust);*all Capital Projects Funds;*and the Sitka Community Hospital.Funds
“Providing for today… preparing for tomorrow”**Each Enterprise Fund and Internal Service Fund ofthe City and Borough is a separate and distinctbusiness element and should stand on its ownfinancially.*The General Fund should finance the expendituresfor general government services in line withprojected revenues.*Each operating budget has been balanced forFY14, through a combination of operatingrevenues, expenditure reduction, and workingcapital balances.Financial Philosophy
“Providing for today… preparing for tomorrow”**The overall financial condition of the City and Borough ofSitka is projected to remain satisfactory, with an adequatelevel of combined working capital (both restricted andunrestricted) for all of its funds.*Cash flow and liquidity is also projected to remainsatisfactory.*General Fund and six of our Enterprise Funds –Electric, Water, Waste Water, Solid Waste, Harbor, andSawmill Cove Industrial Park – have insufficient revenuesand working capital to provide for the long-termmaintenance and replacement of their physical plants.Financial Condition
“Providing for today… preparing for tomorrow”**Needed repairs and infrastructure replacement willcontinue to require a combination of increased user ratesand debt financing.*Of greatest concern is* the rapidly declining condition of our municipal road systemand our inability to financially keep pace with the costs ofrepairs.* Other significant concerns are the potential loss of Statefunding sources for water and wastewater infrastructurerepairs coupled with insufficient working capital to financesuch repairs internally.*The City and Borough retains a sufficient level of generalobligation bonding capacity in order to meet future needs.Financial Condition
“Providing for today… preparing for tomorrow”**The Administrator submitted a balanced budgetwhich includes reduced Federal and State ofAlaska revenue and no new taxes or service feeincreases.*Federal and State revenue sources arebecoming even more uncertain.*The ballot measure in October asks to have twoold school bonds currently paid for out of theGeneral Fund be paid for from the 6% sales tax.Revenue
“Providing for today… preparing for tomorrow”**A property tax levy of 6 mills, unchanged from lastyear, is being budgeted again this year; this is thecurrent maximum allowed by the Home RuleCharter.*Sales taxes will again be levied at 5percent, adjusted seasonally to 6 percent fromApril thru September with the extra proceedsdedicated to school-related general obligationdebt.Taxes and Other Revenues
“Providing for today… preparing for tomorrow”**Sales taxes are anticipated to rise by 2.36% incomparison with fiscal year 2013 projections;*this rise is due to the increase of the taxable sales taxlimit to $1,500 per transaction,*and, to the removal of the sales tax exemption onalcohol and tobacco sales to senior citizens.*Municipal Revenue Sharing (no Supplemental RevenueSharing this year) and School Bond Debt reimbursementby State of Alaska.*Interest revenue earned by the Revolving and GuaranteeFunds.Taxes and Other Revenues
“Providing for today… preparing for tomorrow”**The General Fund budget is essentiallybalanced, with a minimal excess of revenues overexpenditures ($38.00).*Reduction of the Capital Improvements Program willlead to increasing levels of deferred maintenancewhich will create greater financial difficulties in thefuture.*No new taxes or tax increases have been plannedfor.*It has not been planned to utilize any of theGeneral Fund balance (i.e. reserves) to balance thebudget.Balanced Budget
“Providing for today… preparing for tomorrow”**We’re an island community that appreciatesresourcefulness and being good neighbors.*We’re good at volunteering in all aspects of our liveswhether it’s health and wellness, sports, thearts, reading, learning, investing, the list goes on.*Sitka’s not-for-profit community is alive andwell, providing millions of NEW dollars worth of jobsand services to Sitka and beyond.*Downtown Revitalization is happening.*Affordable housing and a shelter are works in progress.
“Providing for today… preparing for tomorrow”**We have a thriving Sheldon Jackson Campus with theSitka Fine Arts Camp and its Campus partners withscience, music and arts programs that are world-renowned.*A City-wide Branding/Marketing Project with SignageSolutions is in the works.*The City and Borough and Sitka Tribe of Alaskaintergovernmental relationship is in good workingorder.
“Providing for today… preparing for tomorrow”**The historical nature of our town contributes to ourcommunity’s sense of place and is recognized around theworld, drawing visitors that contribute to our economy.*The City has created lots of construction & jobopportunities.*We have exceptional municipal services and dedicated Cityand Borough employees.*Our economy has its challenges but we’re in pretty goodshape.*We can keep it that way, and improve it, by workingtogether and planning for a better tomorrow.
“Providing for today… preparing for tomorrow”**Hire a new City Administrator.*Adopt the ordinance that creates the Health Needsand Human Services Commission.*Discuss ways to increase City and Borough revenueand reduce expenses through a multi-facetedapproach, including visioning and operationalplanning combined with financial analysis.*Develop our economy by finding new ways toenvironmentally and sustainably “provide for todayand prepare for tomorrow.”
“Providing for today… preparing for tomorrow”**Please read the handout that is on your table for moredetails concerning the FY14 Operating Budget. This is theBudget letter written to the Assembly by Jim Dinley andJay Sweeney.*The next Budget worksession is tomorrow, 6pm and willcover all the enterprise funds. The following week will beon the General Fund.*If you would like to contact me about ideas for the futureor other issues, I can be reached firstname.lastname@example.orgPhone: 747-2860 or 738-2888or on Facebook: www.facebook.com/mim.mcconnell