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The Ketchikan City Council started its 2020 budget review this week.
The city has $119 million available to be appropriated, according to a report from City Manager Karl Amylon. The sum includes $46 million in reserves.
The manager is proposing that the city expend $73 million in the new year, which is about $3.5 million less than the current year. The proposed budget would require a $52,190 transfer from reserves.
The proposal calls for staffing to remain the same, except for minor adjustments at Ketchikan Police Department. A cost of living adjustment of 2% is included for both represented and non-represented staff.
The budget also anticipates a 10% increase in health insurance premiums, which would be shared by the city and its employees. Increases in retirement expenses would be limited to salary and wage increases as a result of a compensation plan update, cost of living adjustments and step increases.
The proposed budget shows a 0.5 property tax mill rate increase from 6.6 to 7.1. The City Council would have to approve this increase.
Meanwhile, sales tax would remain at 4%, but the amount of sales tax revenue is projected to increase by more than 3% over 2019. A projected 1.2 million cruise ship passengers in 2020 will affect that figure. That’s over 88,000 passengers more than in 2019. Plus, the sales tax cap will increase from $1,000 to $2,000 on Jan. 1, which will generate about $540,000.
The city also anticipates collecting $250,000 in marijuana sales tax, which is used to address the community’s homeless population issues and other humanitarian causes.
No rate increases are planned for harbor moorage, solid waste services and wastewater utility services.
The city is planning for a 10% increase in its liability and property insurance premiums. Worker compensation costs are expected to remain flat.
As for debt, the city will begin making payments on $1.72 million in new firefighting equipment in the new budget year. The city’s annual debt service will increase to $6.51 million.
Amylon points out to the council in his introduction to the budget that a variety of factors might affect it yet. Those factors include the state’s response to its budget challenges, which created a reduction in revenue sharing with communities and is affecting the Ketchikan campus of the University of Alaska Southeast, the Alaska Marine Highway System headquartered here and the Pioneer Home in Ketchikan.
The city also has depended on the state’s Clean and Drinking Water Loan Programs to finance its water and wastewater utility infrastructure projects, and the state Municipal Bond Bank Authority program to issue debt based on Alaska’s rating, which gives the city better rates than if it had to do it on its own.
The proposed budget is with the council. But it isn’t only staff and council members’ responsibility. It’s citizens’, too.
Meetings continue next week. Citizens have their opportunity to comment now.