Transition documents expose big staffing, financial problems across Anchorage city government, threatening core services

As Anchorage Mayor Suzanne LaFrance’s administration takes over city operations, a transition report from former Mayor Dave Bronson describes significant challenges across the municipality’s departments and agencies.

The 153-page document is a compilation of summary reports from each city department and division. It covers basic functions, budgets, accomplishments and the problems facing dozens of local services.

Across dozens of the summaries, core themes emerged: Keeping staff and filling vacancies is increasingly difficult, crippling the operations of some departments. Major fiscal problems, along with old and failing vehicles, equipment and software, will soon start jeopardizing basic services that residents depend on.

LaFrance’s chief administrative officer Bill Falsey called it “a very candid and very sobering take on the current state of the municipality.”

“We know we have some big challenges in front of us when it comes to staffing up, getting our finances in order, and delivering better government to the people of Anchorage. The transition report really highlights these themes,” LaFrance said in a statement.

Some city services, like the fire and police departments, have hundreds of employees and nine-figure budgets. Others have just a handful of employees carrying out low-profile work to keep the city running.

Maintenance and Operations Director Shay Throop reported the city could see the “imminent collapse of the ability of the Municipality to provide basic government services (APD, Street Maintenance) due to the aged state of the fleet without additional funding replacement.”

For example, the city has 30 graders for snow removal, some which are now 13 years old, Falsey said. Over half of them have 10,000 hours on the engine, by which point, according to best practices, the engine should be rebuilt, he added.

In some cases, service disruptions have already begun.

“The ability to recruit, retain or reclassify staff...in a timely fashion is threatening our ability to meet our essential community service levels and eroding staff morale and leading to burnout and a significant backlog of work,” wrote Mark Corsentino, General Manager of the Anchorage Water and Wastewater Utility.

The same challenges were echoed by nearly two dozen other departments and entities.

“Staffing continues to drop as hiring is not significantly increasing,” wrote former Anchorage Police Department Chief Designee Bianca Cross. “The lack of manning presents morale problems and diminishes proactivity.”

As of early July, the police department had 85 vacancies, including about 50 unfilled sworn officer positions out of the 415 budgeted, Falsey said.

In her transition report, Cross outlined a number of ways police officers are struggling to keep up with workload. But also pointed out that personnel shortages in other parts of municipal government are hampering the department’s efforts.

“Misdemeanor crimes are unlikely to be prosecuted due to low attorney staffing. This adds to morale issues as officers see repeat offenders free,” Cross wrote.

Likewise, several department heads noted that bottlenecks and low capacity across departments and agencies were costing the city time and money.

Steve Ribuffo, who heads the Don Young Port of Alaska, said that staffing shortages in other departments that handle work like legal contracts and purchasing were causing lags that are slowing the port’s modernization project.

Empty leadership positions

Jobs are vacant up and down the career ladder, from entry-level employees to directors. Again and again in the transition report, department heads noted that the municipality is not paying salaries that are competitive with similar jobs in the private sector, and is failing to attract new workers or incentivize current employees to stay.

“(Solid Waste Services) has several vacancies in the department. While working to fulfill all positions, SWS has been unable to compete due to low hourly wages,” wrote Kelli Toth, acting director of the city’s trash utility. “The department needs to fulfill key roles including the Director, Expediter, Chief Engineer, Working Foreman at the Landfill, Mechanics, Utilitymen, Journeyman, Customer Service representatives, laborers, etc.”

SWS has about a 17% vacancy rate, with 21 unfilled positions out of 123, Falsey said.

Several directors also cited the lack of remote work options for municipal employees as a hindrance on hiring, particularly since the Covid-19 pandemic upended expectations around office jobs.

“Pay scale in the private sector typically starts at where our pay scales top out,” wrote Planning Department Director Craig Lyons. “Several good candidates have either not accepted positions or left the Planning Department due to inability to work a hybrid schedule.”

Numerous leadership positions across the city have remained unfilled for several months to a year or more. At least seven agencies lacked a permanent director at the time of the report.

“Lack of stable leadership in the director role has caused strain on the department across programs,” Toth said in the report.

A dozen departments reported seeing an exodus of expertise with departures of longtime employees, either from retirements or resignations, and several are anticipating a coming wave of retirements.

Falsey worked as municipal attorney and then as city manager in the administration of former Mayor Ethan Berkowitz and left the job in late 2020. Only two of the city attorneys who were working at the Department of Law’s Civil Division at the time of Falsey’s departure now remain, he said.

“When an entire department turns over, there are just things that walk out the door with them, and whole systems that have to either be reinvented or that get lost. And so this level of churn and turnover and vacancy presents a real organizational challenge,” Falsey said.

There are a total of about 2,800 budgeted staff positions at the municipality, including seasonal and part-time roles, according to Falsey, who estimates there are “hundreds” of vacancies. He is working with department heads and human resources to determine precise vacancy rates.

Parks and Recreation has a 23% vacancy rate for it’s year-round positions, while about half of it’s 160 spring through fall seasonal staff spots are not filled.

“There’s always some amount of vacancies that the municipality is always carrying. I would say, in my experience, the current level is much larger than what I’m used to seeing,” he said.

Vacancies in the Finance Department, and particularly burnout and high turnover in the Controller’s Division, contributed to the municipality falling a full year behind in its annual financial audit for 2022. That caused a cascade of problems and jeopardized millions in grant funding and the city’s certificate of self-insurance from the state, according to the report.

In its report, the Fire Department said that delay “rendered it impossible to comply with reporting deadlines established in state regulation” for SEMT funds — a Medicaid reimbursement program through the state that funds ambulances. The department receives about $23 million annually.

Chief Fiscal Officer Alden Thern said the audit was completed Monday and necessary paperwork for self-insurance submitted to the state just before the final deadline. It’s unclear yet whether the fire department’s funds will be impacted, and whether or how the city’s bond ratings would be impacted, he said.

The auditing process for 2023 is just now beginning, about three and a half months after it would usually begin, he said.

Capital investment delays

Several departments outlined growing problems caused by delayed or deferred capital investments in buildings, vehicles, and technology. One driver of that trend is inflation: municipal budgets have not kept up with rising costs, particularly as they’ve shot up in the last several years. Other causes are less capital coming into the city: state lawmakers have drastically reduced the amount of money they’ve allocated to local governments, and the municipality is restricted on much it can raise taxes or issue bonds to cover funding gaps.

Project Management and Engineering reported that the city’s capital needs exceed $2 billion for basic maintenance and upgrade work.

“Loss of state grant funding has adversely affected our ability to address deferred maintenance and new infrastructure requirement,” wrote Acting Director Melinda Kohlhaas. “The municipality received $512 million in state grants for project management and engineering and drainage projects between 1997 and 2014. Since then, it’s received $2 million.”

The Bronson administration’s report has been helpful, allowing the LaFrance team to immediately begin working with directors and division leaders to find potential solutions, Falsey said.

“The transition report underscores the magnitude of the significant challenges that we’re walking into and and that has created an acute need to do an immediate fact finding with the people who are here, the folks who know these issues the best,” he said.

He acknowledged that many of the problems “are not wholly new” and that the city has had challenges with its fleet and vacancies. The difference is the scale.

He declined to say exactly why the problems have grown so large, adding that he is focused on the future and solutions.

In her statement, LaFrance said she wants to “set the tone for a positive work culture” in City Hall and all city work sites.