Skagway Borough Assembly members passed the first reading of the fiscal year 2017 budget on April 21, with two consecutive meetings and public hearings to follow.
A draft of the Municipality of Skagway’s proposed budget lists the general revenue fund at $2,787,909, down more than $300,000 from FY16. The proposed general fund expense, however, is on the rise, increasing nearly $400,000 at $7,798,331 in FY17 as compared to FY16. After property, sales and Commercial Passenger Vessel tax funds are transferred over to cover costs, approximate excess revenue is listed as $95,563, with an ending balance for the general fund listed at an estimated $558,354.
Mill rates for property taxes remain unchanged from last year, with Service Area I having a mill rate of 7, Service Area II a rate of 5.78, Service Area III a rate of 4.62, Service Area IV a rate of 3.01 and Service Area V a rate of 1.26.
The capital improvements budget–which is comprised of the total funding from sales and excise taxes, bonds, and grants–totals $17.4 million. With all potential capital improvement projects, the proposed budget lists a total capital expense of $34.4 million.
During an April 21 meeting, Skagway Borough Manager Scott Hahn presented the assembly with a FY17 reserve fund analysis to showcase a list and cost estimate of proposed projects. The municipality’s estimated revenue for FY17 is $6.94 million, with a total funding to operations cost of $6.98 million. Sales tax reserves, not including investment earnings or loss, is listed at an estimated $12.7 million. After covering the cost balance, the sales tax reserve is left at $7.5 million.
From the CPV excise tax fund, an estimated $4.1 million in revenue is expected with $4,060,943 in expenses. CPV reserve funds are estimated at $13.3 million, but after allocating $200,000 to the Pullen Creek streamwalk and $2 million to the public safety facility, the reserves go down to an estimated $11.1 million.
Attached to the analysis, Hahn provided a list of proposed municipal projects along with estimated costs, including the senior center, Seven Pastures dike, school vocational education building, recreation center expansion, public works facility, RV park, recycling facility, Gateway port development and a school track and field. Hahn said the list continues to grow.
With estimated placeholder figures, the cost for all aforementioned projects would equal approximately $34.3 million. Were the $7.5 million in sales tax reserve used to pay for the projects, the cost would be brought down to $26.8 million.
Skagway’s current debt service fund, or bonds, costs $1.7 million per year. Were the municipality to bond said projects, the amount would rise to $3.5 million per year, according to the manager’s estimate.
Hahn said his intent for the document was to show assembly members that they can’t accomplish everything all at once.
“My worry is that we clearly are not going to have the money, when after conceiving something, we actually have to build it,” he said in an interview. “I’m worried there will be a great gnashing of teeth. We are coming to that point this fall with so many projects being engineered that will need to be funded.”
He recommends the assembly be more realistic and prioritize what’s most important.
Hahn has worked the budget differently than past managers. Previously, all requested projects would be added to the budget, seemingly with no filter. But Hahn said this year and last he has created a staff budget, reviewed it and then submitted it to the assembly, who will change it and eventually pass it.
Numbers for the FY17 budget remain approximate, as additional requests and changes continue to surface. During the April 21 meeting, a $3,000 request was issued from the Boy Scouts, who were funded $10,000 in FY16, an extra $40,710 to the Dahl Memorial Clinic due to the hire of a new contract provider and a transfer of $969,745 from the total sales tax fund to the clinic.
Mayor Mark Schaefer reminded the assembly of a fish hatchery’s importance, estimating a cost of $100,000, to which Hahn issued an audible groan.
Assembly members agreed on a work session to further discuss projects and line items for FY17, scheduled for May 12. The budget then must go through second and third readings at assembly meetings before final passage in June.
The budget is now in the hands of the assembly, but Hahn continues to remind them of one crucial detail.
“They’ve got a lot of cash reserves, so they think they can do everything they want and they can’t,” he said. “They can do anything they want, but not everything.”