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City and Borough of Juneau projects $12 million shortfall

Forecast earlier this month was $5 million

Posted: March 20, 2014 - 5:40am
City Manager Kim Keifer and City Finance Director Bob Bartholomew speak about revenue shortfalls to the Juneau Assembly during their finance committee meeting on Wednesday.  Michael Penn | Juneau Empire
Michael Penn | Juneau Empire
City Manager Kim Keifer and City Finance Director Bob Bartholomew speak about revenue shortfalls to the Juneau Assembly during their finance committee meeting on Wednesday.

The city’s operating budget will be about $12 million in the red over the next couple years, the City and Borough of Juneau finance department predicts.

At its Wednesday night meeting, the CBJ Assembly finance committee heard an update from city finance director Bob Bartholomew, who announced a predicted $4.9 million shortfall at a Committee of the Whole meeting earlier this month.

Since then, his staff has found that although the FY2015 shortfall will be $4.9 million, the FY2016 deficit will be an additional $7.1 million, bringing the total to about $12 million.

Bartholomew said the numbers he presented at the earlier meeting were “very preliminary ... it was probably worse than that.”

His department missed the extra $7.1 million because it hadn’t yet run the numbers through the city’s budget system. Creating the early rough estimate was “basically an attempt to accelerate the process (by) producing information outside of our budget system,” he said.

According to Bartholomew’s report, the budget deficit grew after previously negotiated and allocated wage and benefit increases were added.

It “drove the numbers to be a significantly higher need-slash-shortfall when we prepare the 15/16 budget,” he said.

Two major factors led to the shortfall: declining budget fund balances and no city property tax or sales tax growth, the budget report stated.

A portion of the existing fund balance is going toward $3.1 million in wage and benefit increases. And although the FY2014 budget predicted a 2.5 to 3 percent increase in sales and property tax revenue, actual revenue is higher than it was in 2013 but about $1.5 million below budget.

According to the report, the city is predicting no change in tax revenue for FY2015, and a 1 percent increase in FY2016. Tourism is expected to decrease by 2 to 3 percent.

City Manager Kim Kiefer, along with Bartholomew and his staff, is tasked with balancing the budget, and provided a list of scenarios to take away from the shortfall.

Ideas for saving money included using the rest of the city’s fund balance and budget reserve, raising property tax rates by varying degrees and making significant cuts to city services and programs. Kiefer presented four options which can be found online at www.juneau.org/clerk/ASC/FC/2014/documents/BudgetShortfallPacket.pdf.

Some members of the Assembly voiced concerns about cuts to services and programs. Assemblymember Kate Troll asked if “very real programs will be going away.” Kiefer said that, because city government has been funded at a flat rate for years and is down to the essentials, it’s time to make “major cuts.”

“We’ve been ‘little-piecing’ since 2009 and we don’t have any little pieces left,” Kiefer said.

She said she’ll immediately begin to put together a list of potential cuts.

“What that list will be I’m still working on to get to the dollar figures,” she said.

Committee chairwoman Karen Crane said everything — including the school district and Eaglecrest Ski Area budgets — should be considered for cuts.

“We have to factor that information into everything we’re receiving,” she said. “As far as I’m concerned, everything is on the table.”

Kiefer will present a balanced budget to the Assembly finance committee — including details on which city services and programs could be cut — on April 2. The final budget must be adopted by June 15.

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Frank Heart
602
Points
Frank Heart 03/21/14 - 07:17 am
6
0
Lets have a debt audit.

Lets have a debt audit.
Are all the debts legit?
Who is financing our debt?

"Municipal bonds are extremely profitable for investors because they are tax-exempt and, like mortgages, can be packaged into securities."
"Why should the 99 percent honor their debts when the 1 percent have walked away from theirs without remorse?"
"debtors are a class, a collective “we” that can decide when enough is enough."
"abolition of the current profit-centered debt"

Interesting concepts in the article: Cities in the Red: Austerity Hits America and
@ - Strike Debt

My interest is in finding ways: to NOT cut “essential” services, to NOT put this debt burden on the public , but to END the profit-centered debt cycle.

Dick Behrends
557
Points
Dick Behrends 03/21/14 - 11:42 am
12
1
It's time to put the brakes on

I can benefit from the construction of the library, but I feel that we should put it on hold until this City can address the unfunded PERS liability, budget short falls, and decreasing school enrollment. I for one don't want my personal and business property taxes rising because of wants not needs............just put the brakes on, take a breath...............and come up with a financial plan............

Clay Good
1944
Points
Clay Good 03/21/14 - 03:21 pm
7
0
“... everything is on the table.”

"Committee chairwoman Karen Crane said everything — including the school district and Eaglecrest Ski Area budgets — should be considered for cuts." “As far as I’m concerned, everything is on the table."

Really? Everything?

CBJ & JSD were holding hands when they agreed to build a big second high school - during this prolonged period of declining enrollment.

The assembly assured voters and tax payers of their commitment to a two large high school model when they voted to support the new high school and raided Juneau's rainy day fund to pay for its cost overruns.

TMHS and its associated facilities are beautiful and a wonderful asset for the community. Juneau is fortunate to have them. But facilities and their associated programs ain't cheap.

Now IS the time for city leaders to keep their promise to invest in our community by investing in our schools.

This is NOT the time to put them on the table.

trent Morrison
215
Points
trent Morrison 03/22/14 - 11:09 am
4
0
The Mayor, City Manager,

The Mayor, City Manager, and the Assembly should consider using a checklist to end the practice of putting the cart before the horse. Planning after the fact just costs taxpayers more money and we don’t like that. The Planning Commission uses a checklist to guide their decisions, their list helps them make sure to dot the i’s and cross their t's. Checklists are also helpful for the public; they provide us with transparency, accountability and the lists serve as a great public record. Checklists would also help the Assembly avoid the type of waste that comes from carelessly overturning years of in-depth decisions made by the Planning Commission.

trent Morrison
215
Points
trent Morrison 03/23/14 - 09:55 am
3
0
Just want to add that at our

Just want to add that at our home we listen to the Assembly meetings on KTOO. This past year I was struck by the recurring theme or echo emanating from the public, of unfairness. There is a sense that the application of rules, regulations and even the opportunity to give input at CBJ has been unfair. A checklist would also help to ensure that our referees (the Assembly) evenhandedly apply the rules.

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