With a fourth and final reading on June 21, Skagway’s Borough Assembly approved the Fiscal Year 2018 budget with a property tax millage rate of 7.00 in Service Area I and 5.78 in Service Area II.

Numbers given in the operating budget are the projected costs and revenues, not actual. Revenue for the General Fund, which covers municipal services like the fire department, public works and the library, comes in at $2,803,689. Incorporated in that number, real property tax revenues are projected to come in at $1,911,000.

Expenditures in the General Fund are projected at $7,129,438. An additional $98,095 of allocated expenses is also there. To smooth out this offset, $2,775,690 was transferred from the Commercial Passenger Vessel Excise Tax Fund. According to Borough Treasurer Heather Rodig, that transfer to the General Fund will be used to cover operations that are directly impacted by cruise ship passengers, including police, fire, public works, etc. An additional $1,451,964 in sales tax was transferred in to balance the General Fund.

The Debt Service Fund, which contains a laundry list of the borough’s active loans and bonds – such as for the Public Safety Facility and library – has expenditures of $1,666,916. A matching number made up of sales tax and a transfer from the Permanent Trust Fund was used to cover this.

Revenues in the Permanent Trust Fund sit at a projected $78,970; expenditures in the fund are at $44,000. A transfer of $101,122 was made towards the bond fund, leaving a negative $66,152 in this fund.

For the Health Clinic Fund, revenues of $1,165,377 combined with grant funds of $1,273,437 for a total of $2,438,814. That grant money had been a topic of discussion earlier in the year, with the Dahl Memorial Clinic’s Board of Directors working with the assembly on changes to municipal code. The changes were required by the Health Resources & Services Administration, and were made on the cusp of the March 15 application deadline for the grant.

Expenditures for the Health Clinic Fund are projected at $3,132,647, with allocated expenses of $45,498. A transfer of $719,358 was made, leaving an excess $20,000 in expenses in the fund.

Solid Waste had revenues of $431,000, expenditures of $589,588 and allocated expenses of $15,961. A $174,549 transfer from the CPV Excise Tax Fund balanced the fund.

In the Water and Sewer Fund, expenditures ($931,530) almost doubled revenues ($466,608), with allocated expenses coming in at an additional $17,923. A $482,845 transfer from the CPV Excise Tax balanced the fund. Enterprise funds like Solid Waste and Water and Sewer highlight an interesting problem for the municipality, due to the abundance of visitors the borough enjoys during the tourist season.

Borough Manager Scott Hahn said these funds are supposed to be run like a business, with revenues from fees covering expenditures – rather than being subsidized with CPV Excise Tax funds or sales tax revenue.

Some of the services feeding these enterprise funds may be facing an adjustment to rates, Hahn said.

The municipality can’t just build to support the average usage, Hahn said, it has to build according to peak use.

“That’s true with all of our services,” Hahn said.

In the Tourism Fund, a total revenue of $205,950 stands against expenditures of $518,193. A $312,243 transfer of sales tax was made to cover the difference in this fund. The municipality’s Port Commission Fund rang in with revenues of $127,200 from the White Pass & Yukon Route Railroad lease, and expenditures of $95,300. And additional $5,133 came from allocated expenses, for a total positive excess revenue of $26,767.

The Small Boat Harbor is also expected to end up with an excess revenue. Revenue/expenditures for the Small Boat Harbor Fund were $336,490/$304,565, respectively, with allocated expenses of $13,580 for an excess revenue of $18,346.

The total sales tax revenue projected for FY 2018 is $7,404,880. A $1,421,124 chunk of that is budgeted towards school funding, another $525,667 is to be spent on school activities and $50,000 is going towards an investment advisor.

All but $39,731 of the remaining $5,408,089 in sales tax is projected to cover deficiencies in other funds and capital improvement projects.

The municipality is also budgeting a total of $6,396,359 in capital improvement projects for the 2018 fiscal year. This includes projects such as senior center engineering for $420,000, an expansion of the Molly Walsh Restroom for $300,000 and State Street water and sewer upgrades for $1,800,000. The capital improvement projects are funded as follows: $1,319,000 from sales tax, $435,000 from CPV Excise Tax, $3,453,693 from loans, $888,666 from federal grants and $300,000 from state grants. Skagway Mayor Mark Schaefer said the budget process this year highlights the need to work towards accommodating larger cruise ships in the harbor.

“The budget is a real good example of why we don’t want to lose any piece of our tax revenue, meaning losing a ship in 2019, or another one in 2020, we can’t afford it,” Schaefer said. Some of the biggest pieces removed to make the budget balanced were capital improvement projects.

“They are things we need, they are going to be put off,” Schaefer said. “This is directly tied to the port, meaning that we need to keep this business rolling on.”