The Petersburg Borough Assembly met with department heads Monday afternoon in a work session to discuss the proposed 2013-14 fiscal budget.
“For the 2013-14 budget, the general fund is presented to the Petersburg Borough Assembly as a balanced budget,” Petersburg Borough Finance Director Jody Tow stated. “Property tax revenue is budgeted to increase due to the new library bond and the proposed budget does not include any increase to the base tax rate of the borough.”
Tow also explained that the borough is expecting to receive an additional $193,978 in state revenue sharing in this budget. In addition, there has been a one percent contingency in the amount of $90,000 to the general fund to help provide a more conservative approach to addressing those unexpected expenditures that can develop during the course of a year.
A significant change was made to the Parks and Recreation staffing to address issues related to unscheduled hours.
“In this facility, it is common when someone is on vacation or ill, they must be replaced to cover the scheduled activities in the center,” Tow stated. “This contributes to a common over budget condition by year end.”
To address this issue and improve the efficiencies of the operation, several changes were made which have the net effect of adding 66 budgeted hours when comparing the 2012-13 budget to the 2013-14 budget.
Facility attendant hours will change from 2,808 to 2,108 which is a decrease of 700 hours. The Lifeguard I position hours will change from 2,548 to 2,568 which is an increase of 20 hours but the Lifeguard II position will decrease from 3,308 hours to 2,064 for a total of 974 hours. A facility specialist position that was not budgeted in the previous year at all will be budgeted for 2,080 hours for this year's budget. Groundskeeper hours will increase this year from 1,400 to 2,080 for a total of 680 and a winter temp position will be removed to decrease the hours by 1,040.
“We have also reduced the General Fund's portion of the raw fish tax by $50,000 in favor of returning more of this community wide asset to the harbor to help this enterprise fund begin the process of building additional reserves,” Tow stated. “And the borough's contribution to the Petersburg Municipal School District remained at $1.8 million and the borough reduced the general fund allocation of the Secure Rural Schools allotment by $5,000 while using a portion of this funding to offset a $70,000 renovation to the fire and emergency alarm systems for the school and the community center buildings.”
According to Tow, overall the General Fund budget increased from $9.06 million to $9.368 million an increase of $303,441 or 3.34 percent. This increase is primarily due to using the contingency approach. Negotiated wage and benefit rates increased 4.5 percent from last year due to contract raises and budgeting an additional 15 percent increase for health insurance costs and costs associated with maintenance and operation. These increases include $60,000 for the Rasmus Enge Bridge, $40,000 for a Quarry Plan and the $70,000 alarm system for the school and community center facilities.
Enterprise funds consist of Mountain View Manor, water, wastewater, sanitation, harbors and power and light.
“These funds are generally expected to cover their operations costs as well as at least a portion of their future capital costs or depreciation,” Tow stated. “Due to the past practices where the State of Alaska provided much of the funding necessary for the replacement of assets, Petersburg has not traditionally set the Enterprise Fund rates at a level to fully fund depreciation.
This is a typical and justified practice when State and/or Federal funding is providing for the replacement of these assets.
“However, we can now anticipate that it will be more difficult to acquire State and Federal funding that will pay for 100 percent of these capital projects,” Tow said. “This makes it more important for the enterprise funds to build reserves to leverage for matching grants as well as self-funded projects.”
According to Tow, Petersburg Power and Light is currently working with a consultant on a rate study and water, wastewater and sanitation completed studies in 2012-13, and a more formal study for the harbor is being considered as part of a full Harbor Development Plan.
The electric fund revenues are projected to decrease by .39 percent or $22,826 and total expenditures are forecasted to decrease by 15 percent or $1,172,737. Excluding capital outlays, bond principal and depreciation, the fund is positive at $83,216 and 20 percent of depreciation recapture is equivalent to $134,000.
The water fund revenues are projected to increase by 2.93 percent or $20,750. Total expenditures are forecasted to increase by five percent or $89,403 and excluding capital outlays, bond principal and depreciation, the fund is positive at $301,517 with 20 percent depreciation recapture equal to $161,200.
The wastewater fund revenues are projected to increase by 4.78 percent or $31,500 with total expenditures forecasted to decrease by .48 percent or $4,875. Excluding capital outlays, bond principal and depreciation, the fund is positive at $107,998 with a 20 percent depreciation recapture equal to $67,400.
Sanitation fund revenues are projected to increase by 1.97 percent or $22,000 with total expenditures forecasted to decrease by 1.22 percent or $14,314. Excluding capital outlays, bond principal and depreciation, the fund is positive at $25,993 with a 20 percent depreciation recapture equal to $12,000.
The harbor/port fund revenues are projected to increase by 8.79 percent or $128,926 with total expenditures forecasted to decrease by 3.58 percent or $74,957. Excluding capital outlay, bond principal and depreciation, the fund is positive at $548,834 with a 20 percent depreciation recapture equal to $171,000.
The elderly housing fund revenues are projected to increase by 4.06 percent or $14,976 with total expenditures forecasted to increase by .61 percent or $2,929. Excluding capital outlays, bond principal and depreciation, the fund is positive at $64,821 with the 20 percent depreciation recapture equal to $13,768.
The assisted living funds revenues are projected to increase by 6.46 percent or $71,187 with total expenditures forecasted to increase by 11.45 percent or $125,465. Excluding capital outlays, bond principal and depreciation, the fund is positive at $178,576 with a 20 percent depreciation recapture equal to $21,400.
Internal service funds include the motor pool and debt service.
“These funds provide services to a wide range of specific departments,” Tow stated. “In the case of the motor pool fund, annual expenditures are budgeted for each department that utilizes vehicles and equipment, such as trailers, portable generators, heavy equipment and service vehicles.”
According to Tow, the expenditures are calculated by evaluating the useful life of existing equipment and the expected replacement price.
“This allows the borough, as a whole, to accumulate the reserves necessary to purchase required equipment and vehicles as needed without incurring additional debt,” Tow stated. “This fund accounts for the ongoing maintenance costs of maintaining the fleet in optimum condition.”
The current balance of vehicles and equipment in the motor pool fund is 29 service vehicles, 13 emergency services vehicles, 22 heavy equipment and 36 other, such as trailers, generators, boats, forklifts, etc that are in service now.
The debt service fund accounts for the general obligation bonds issued by the borough.
“These general fund related bond issues include the new library, the aquatic center, school deferred maintenance and the vocational education building,” Tow stated. “Expenditures are budgeted and then paid with the allocated property tax revenue.”
According to Tow, this is a revenue neutral fund where the revenues collected are specifically matched to the expenditures associated with the specific bond payments.
The capital project and special revenue funds account for specific revenues and projects that are funded through grants, allocated surcharges and State and Federal Programs such as the National Forest Receipts and the borough transition revenues and expenditures. This is also where the borough tracks expenditures from the economic development account.
“The borough is engaged in an aggressive capital improvement program that touches almost every aspect of the community,” Tow stated. “This includes being the sponsor for many non-borough projects such as the Compass Theatre, Sons of Norway Hall and the Clausen Museum.”
Current capital projects in progress are the North Harbor Reconstruction which has been funded and the bid awarded; Police and Jail Facility which has been partially funded and design is underway; Commercial Drive Down Dock and Crane Dock which has been funded and design is underway; Library has been funded and construction is underway; Petersburg Medical Center Roof has been funded and bid awarded; Stedman Elementary Siding has been tentatively funded; Pump Station 5 has been funded and bid awarded; Pump Station 1 has been partially funded and design is underway; Water Plant has been funded and construction is underway; Petersburg Shooting Range has been funded and construction has been scheduled; Sandy Beach Shelter and Bathrooms have been funded and construction has been scheduled.
This proposed budget will be brought before the Petersburg Borough Assembly at noon Monday, May 6 for its first