Anchorage Mayor Ethan Berkowitz unveiled a 2016 budget proposal Friday that contained a $5 million increase in spending on public safety, as well as a proposal to use increased property tax revenue to help pay for it.
"In some ways, this budget reflects the fact Anchorage is going to pay some price for the state's fiscal crisis," Berkowitz said during a Friday work session with Anchorage Assembly members. The informal session afforded Berkowitz and his administration an opportunity to to present an overview of his first proposed budget.
Berkowitz said the $482 million proposed budget, which will take effect in January, is "significantly" smaller overall than the 2015 budget when adjusted for inflation and population growth.
But the city is projecting about $11.5 million less revenue from nontax sources, which largely stems from cuts in state revenue sharing and a surprise decision by Alaska utility regulators to block Anchorage from collecting millions of dollars in profits from its electric utility.
Earlier this week, Berkowitz said his priority is to increase staffing in the city's police and fire departments, a central tenet of his campaign for mayor. He pledged at a Wednesday press conference to allocate funding in the budget for three police academies in 2016, with about 25 recruits per academy, and for 10 new firefighter positions.
Berkowitz also said his administration had "found ways of bridging" the revenue shortfall and still pay for more cops. He said the administration planned to increase fines and fees, such as speeding tickets, and restructure parts of the city budget.
Changes in fines and fees will only generate about $1 million, according to city budget director Lance Wilber. But budget shifts, payouts from legal settlements, and property tax revenues will also be part of the equation, officials said Friday.
The administration's budget translates into a 1.9 percent increase in taxes for an individual homeowner, or about $50 more in tax for every $300,0000 in valuation.
The Berkowitz administration is also proposing to use $4.5 million in funds from a legal settlement over the value of the Trans-Alaska Pipeline System and its assets. Litigation halted what had been annual payments from the settlement, and while the court decision was pending, three years' worth of funds pooled into what was essentially a municipal escrow account, City Manager Mike Abbott said during the meeting.
Budget shifts
Meanwhile, for the last two months, city department heads have been looking at ways to cut budgets by a .5 percent by the end of 2015 and an additional 2 percent in the 2016 budget.
Proposed reductions for the next year include cuts to professional services in the Anchorage library system and to three part-time positions in the Anchorage Parks and Recreation Department department, Wilber said.
Wilber noted a net gain of two positions overall in the city, with the addition of about 20 positions in the Anchorage Police Department and 10 in the Anchorage Fire Department.
But some positions will be lost: 16 among the external staff involved in the troubled upgrade of the city's SAP data processing system, and 12 in other departments.
The Berkowitz administration has temporarily halted the SAP project while an external review group prepares recommendations on how to proceed. When the project re-starts, it will be paid through a separate capital-expense program and not the regular operations budget, Wilber said. That includes funding for staff, he said.
In the short term, the suspension of the SAP project has decreased the overall budget by about $2 million, Wilber said. The administration has not developed a long-term plan for how the project will move forward.
Wilber said there were also small cost savings associated with restructuring several city departments under a new Office of Community Development.
The budget shifts and money from legal settlements, however, only added up to about $6.9 million, Wilber said, which is why the city is looking to property tax revenue to help fill the remainder of the gap.
In planning for capital projects, the administration is proposing to complete the reconstruction of the north end of Spenard Road with $14 million in new bond funds. Wilber said the administration is particularly interested in roadway, transit and trails improvements across the city.
Assembly members want more detail
Assembly members peppered Wilber and Berkowitz with questions, with several saying they had hoped for more detail. Wilber told Assembly members the complete set of budget documents would be available later in the day.
Assembly member Jennifer Johnston of South Anchorage said her main area of concern was the use of funds from the TAPS settlement to fund operations.
She said she'd like to see a breakdown of the annual income from the settlement, and see the TAPS funding included in the administration's forthcoming six-year fiscal plan.
During the meeting, Vice-chair Elvi Gray-Jackson, asked Wilber exactly how many city employees would be laid off. Wilber said he wasn't sure, and Gray-Jackson asked him to find out.
Gray-Jackson later said she applauded the mayor for a "creative" approach to funding public safety.
Assembly member Amy Demboski of Chugiak-Eagle River, however, said she's unsure about the solutions, and said she's looking forward to getting into the details of the budget. She said she was concerned about the future of the SAP project and about increases in property tax.
"It's all about how you prioritize government spending," Demboski said. "In a city of 300,000 people and a budget of $480 million … I don't think it' s a lack of revenue, I think it's about priorities."
Friday's work session marked the start of a months-long budget process for the Assembly and the new administration. A work session on the city's operating budget, with presentations from department directors, has been set for Oct. 9.
Wilber said the plan is to introduce the budget at the Assembly's Oct. 13 meeting. The first public hearing is set for Oct. 27.