The City and Borough of Juneau Finance Committee had a last-minute addition to its agenda Wednesday night, a proposal — eventually narrowly defeated — to allot $250,000 to begin studies for the AJ Mine.
Deputy Mayor Merrill Sanford proposed the idea, while the committee was having its last meeting to approve specific fiscal year 2012 funding requests.
Committee Chairman David Stone moved to sit in the audience and recused himself from discussing the appropriation due to a conflict of interest. Mayor Bruce Botelho also was absent.
Ultimately, the vote came down in a 4-3 vote in favor of allotting the funds, however the committee needs a majority vote of at least five to take action. Assembly members Doll, Mary Becker, Karen Crane and Sanford voted in favor; Jonathan Anderson, Johan Dybdahl and Danner opposed.
“This has come to us at the last minute, Monday night as I reviewed and looked over Appendix ‘F,’ there are a lot of things the committee recommended us doing,” Sanford said. “That’s going to cost a lot of money to do that. That would get us into looking at our water system and pulling together all of the different plans we’ve had in the past. It would also help pay for a half-time employee, the manager would look at who would be doing that.”
That $250,000 would likely have come out of the sales tax reserves.
As far as staffing, engineering department director Rorie Watt, who served as liaison to the AJ Mine Advisory Committee, told City Manager Rod Swope he would be interested in continuing to work on the project. Swope asked him how he’d continue running his department. Watt estimated he would spend half his time doing that and half on the AJ Mine, so the city would need to re-create a deputy engineering director. That would have to come from the Assembly.
Swope said if the Assembly does move in this direction, he would recommend it treat the fund as a Capital Improvement Project so funds remaining at the end of the year would not go back to the general fund automatically.
Anderson asked if the water department could take on the water supply study or if that entire cost had to come externally. Swope believed the water department could handle most of that undertaking, but would likely still need additional help from an outside firm. He also pointed out that time the water department spends on that would normally naturally be paid for out of utility rates. Swope recommended that not happen in this case so people weren’t seeing an increase in their water bill because of it.
“It would be a good thing for CBJ to be looking at its water sources and analyzing what are the potential threats, needs of the future regardless of where the AJ mine project goes,” Anderson said. “I see the vote as setting up a CIP, the Assembly needs to be very conscious, this is saying we will go forward with this project. This is a real decision point and technically we’ve been quibbling over $4-5K and its impact on collective bargaining. Now we want a quarter of a million.”
Dybdahl said they just got the mine report from that committee. He said before they move forward he wants to see a specific plan come out of the manager’s office on what should be done and when.
“I just don’t feel like I can support this for $250,000 right now without seeing a better plan, a long range plan,” Dybdahl said. “I just don’t feel comfortable just throwing $250,000 and hoping for the best.”
Becker said she was initially inclined to agree with Anderson and Dybdahl, but said if they don’t set aside money to begin these studies and plans, they’re not going to get to the point of sending out a request for proposal.
Sanford said he wanted the issue to come to the committee for an open, public discussion.
Anderson later said he didn’t feel it was a very open process because aside from those who showed up for the items already on the agenda, there was no public present and the issue wasn’t on the agenda prior to the meeting.
Anderson said that if they approved spending that $250,000, it essentially would have set a policy to move forward and the city wouldn’t have been obligated to have public hearings on those funds.
“We don’t have public hearings for all these things we have in the budget, they’re already appropriated,” he said. “If this had passed, there would be no public hearing because there is no public ordinance.”
The funding items that were listed in the board’s agenda passed unanimously, including $434,500 for the Alaska Committee and $250,000 in core funding for the Juneau Economic Development Council.
The most contentious point of the discussion centered around the additional requests: $125,000 more for JEDC, $4,550 for the Juneau Human Rights Commission and $25,000 for partial funding of the Juneau Afterschool Coalition.
Swope cautioned Assembly members on approval of the extra items. He said the fiscal forecast for FY13 and FY14 shows about an $11 million deficit between the two years. Swope said that he’s had to tell the police chief he can’t rehire a lieutenant. There’s also a senior planner position that’s being held open.
The tight budgeting outlook comes from an Assembly directive, but it’s also his directive to maintain and grow a budget reserve. A 1990s study showed the city should have $10 million in reserves. With inflation, Sanford pointed out they should likely have between $15 million and $20 million. The city had grown a reserve to $10 million, but because of the last budget shortfall it is now down to about $7 million.
Assemblyman Bob Doll said he wouldn’t suggest taking money from that fund for other things, but he said they shouldn’t necessarily be setting aside every extra dollar to go into reserves just because that’s what they’ve always done. He said the financial climate is such that they do need to look at spending those extra dollars on some of these items, like ones discussed Wednesday night.
Sanford said that would be a more detailed policy discussion they should have another day.
Swope said he designates all unbudgeted revenues to the reserves unless there is a deficit.
Doll said it was a good assumption for Swope to make, but the Assembly can still choose to spend it.
“The money in the reserve, you always retain the right to spend it,” he said. “I don’t. Whether it’s here or there. Whether you want to spend it however you want, as much as you want, that’s your right. That’s not my ability.”
Swope also pointed out if the Assembly ultimately decided to spend funds on extras, it would send a message to other departments and citizens that the city isn’t truly cutting back on spending. He said it would also negatively impact labor negotiations, where the city is aiming to have a zero cost-of-living increase for FY13 and FY14. Employees would still get merit increases.
Assemblywoman Ruth Danner said she planned on approving Swope’s recommendation as presented, but wanted to discuss all sides of the issues. Danner at a previous meeting said it’s time to cut down on government. She said that while they have a balanced budget, it’s not a sustainable budget.
“I believe that there is a certain obligation we have in addition to balancing budget to invest in the future,” she said. “Some money we’ll spend will make money for us as a group. I don’t know how to distinguish between the AJ project proposal and the addition to JEDC. Because I know for a fact that some of the things we would do with the JEDC investment would also increase money to this municipality. I’m not sure how to measure that.”
Ultimately the Finance Committee approved funding for the human rights commission and the after school coalition, but did not pass extra funding for JEDC.
• Contact reporter Sarah Day at 523-2279 or at firstname.lastname@example.org.