The Juneau School District budget committee will forward its budget recommendations to the school board Tuesday night.
The committee wraps up more than a month of work on the fiscal year 2013 spending plan. Since January, the committee has held several meetings and taken input from school district teachers and staff, as well as the public, on how to deal with an expected $5.8 million shortfall.
Chairwoman Barbara Thurston says the budget committee process has worked well.
“It’s been a very open process. There’s been lots of opportunity for peoples’ input and there have been some recommended changes, and I suspect there’ll be more recommended changes, which are often based on the input we get,” she says. “You know everybody comes at this knowing different things and having a different perspective and it’s really helpful to hear those different perspectives of what some of these positions actually do.”
The budget committee includes members of the education board, the community, and representatives from teachers and support staff. Thurston says the committee will agree Tuesday on a draft budget, which the school board will finalize.
The administration last week proposed restoring four of six school nurse positions that had been cut from next year’s budget as well sa elementary music grants using school activity funds. The administration also proposed a number of items that would be added back if more revenue becomes available.
A decline in school enrollment, a reduction in total state and federal revenue, and increased operating costs are the cause of the budget deficit.
The school district must forward its budget to the city and borough Assembly by mid-March, long before the amount of state funding is known. Sixty-three percent of the district budget comes from the state.
The budget meeting begins at 6 o’clock in the Juneau-Douglas High School Library. The committee will take public testimony and also wants emailed comments at budgetinput@jsd.k12.ak.us.
About 40 percent of Juneau residents say the city and borough should cut services before raising taxes and fees. But 30 percent say they’d be willing to pay higher taxes or user fees.
The CBJ-sponsored budget survey was released Wednesday night to the Assembly Finance Committee. Conducted in mid-January by research firm McDowell Group, it shows that more than a fifth of respondents favor a combination of revenue increases and reduced services.
The city is facing an estimated $4.8 million shortfall in the next fiscal year, and almost a $2.9 million deficit in FY 2014.
The Assembly says residents’ input is important as they tackle the budget over the next few months.
If the city considers tax increases, 63 percent of respondents say they would support a new seasonal sales tax.
Finance Committee chairwoman Karen Crane says that surprised her.
“Money’s tight for everybody and to me it just says they appreciate the services that are out there and want to keep them,” Crane says.
If the city decides to cut the budget, respondents say they would target Community Development and City Administration.
The 2012 CBJ Budget Survey was conducted by telephone between Jan. 12 and 16. McDowell Group completed 407 surveys of Juneau residents selected randomly. The data has a margin of error of +/- 4.9 percent at the 95 percent confidence level.
Crane says the information from the survey will be an important tool for the Assembly as members makes the final decisions on the budget.
The city will continue to back millions of dollars in bonds for Wildflower Court, a non-profit nursing home adjacent to Bartlett Regional Hospital.
Eight of nine Juneau Assembly members Monday night voted against repealing an ordinance passed in January that authorized $14.2 million in bond refunding. In 1999, CBJ issued $18 million in revenue bonds for Wildflower Court. The corporation last year asked the city to assist in refinancing at a lower interest rate through the Alaska Municipal Bond.
After the Assembly approved the refinancing plan last month, City Attorney John Hartle noted a conflict of interest since CBJ Finance Director Craig Duncan is married to Wildflower Court Administrator Mille Duncan. Hartle recommend the Assembly repeal the ordinance and adopt a new one.
But CBJ Bond Counsel Cynthia Weed at K & L Gates in Seattle called it a “perceived” conflict and said CBJ’s conflict of interest code had not been breached. In a letter to Hartle, Weed said Duncan’s role was administrative and he had avoided making recommendations about the transaction. Weed said the Assembly did not need to repeal the original ordiance and re-enact another.
City Manager Rod Swope said the refinancing would save Wildflower Court more than $4 million over the remaining life of the bonds.
“The bonds that currently exist are $13 million in bonds and they’re asking for an additional million dollars that they will use to make improvements to the facilities. Kitchen, carpet, maintenance work,” Swope explained.
Even so, Assembly member Ruth Danner said the city should not get into the business of financing bonds for non-profit projects. She voted for the original ordinance last month, but Monday night she had changed her mind.
“This, I discovered after our meeting last month, will be the first ever non-profit to have municipal funding through the (Alaska Municipal) Bond Bank,” Danner said.
The nursing home corporation has met its debt service every year, according to Swope. CBJ owns the property Wildflower Court sits on and the corporation has pledged its building as collateral. Independent consultant Bob Bartholomew conducted a review of the risk to the city. In a memo, Bartholomew says Wildflower Court is in a strong financial position and there is no risk to other CBJ bonding capacity. (Bartholomew is a former Chief Operating Officer for the Alaska Permanent Fund.)
But Danner says the city may now get requests for such help from other non-profits.
“How will we draw the line for the next non-profit that wants this kind of support from the city and borough of Juneau?” she asked.
“I don’t know that you have to draw a line,” Swope replied. “I think you should be willing to hear any request.”
But Swope called this instance unique.
“This is really a quasi-governmental entity, in my regard. First of all the facility is located on property that we own, that they lease from us. Secondly, there’s a very close nexus in connection with Bartlett Regional Hospital, which is why I think we’re doing this. It’s critical to that facility, and they’ve made it clear it’s critical to that facility, so I think it’s a unique situation, unlike any other non-profit that would come forward and want this,” he said.Wildflower Court adjoins Bartlett Regional Hospital
The city and borough owns Bartlett Regional Hospital. According to the hospital, more than 63 percent of Wildflower Court’s patients come from BRH.
The city will hire an expert to provide technical assistance in its dispute with the Federal Emergency Management Agency on Juneau flood plain maps.
CBJ disagrees with FEMA’s revision to the maps, adopted last year by the agency.
The Assembly Monday night agreed to transfer $50,000 from Areawide Drainage Improvements for the technical help. The city will contract with a hydrologist to work with city staff.
The transfer was recommended by the Public Works and Facilities Committee. In a recent meeting, CBJ Development Director Dale Pernulla said the city hopes to get FEMA to allow scientific review of the maps. He says the city disagrees with the model used for drawing the maps.
Bartlett Regional Hospital hopes for future sales tax revenue for a new unit.
Photo by Casey Kelly. The wish list for Juneau’s 1 percent temporary sales tax has grown to more than $81 million.
The City and Borough’s 5 percent sales tax is comprised of a permanent 1 percent, a temporary 3 percent and a temporary 1 percent tax; the temporary portions to be approved by voters.
The temporary 1 percent sales tax expires September 30, 2013. Voters will be asked to extend it this fall. It’s called a project tax, because it’s generally used to fund city construction and maintenance.
In recent weeks, city departments have come to the Assembly with their favorite project; non-profit organizations are also expected to ask for a share.
The Public Works and Facilities Committee is the first stop for requests, where this exchange was heard at a recent meeting:
“So are you asking for 28 million dollars out of the one percent sales tax?” Assembly Finance Chair Karen Crane asked.
“Oh we’d love to have 28 million dollars,” quipped Juneau International Airport Manager Jeannie Johnson.
Crane: “I don’t see it happening, Jeanie.”
Johnson: “No, I don’t see it happening either. What we ended up with the last time was 10 million dollars.”
Johnson hopes to use future sales tax revenue for phase two of the terminal renovation, which will remodel or replace parts of the old wing built 60 to 70 years ago. Johnson said it ranks “as one of third worst energy hogs of all CBJ buildings.”
“The question is,” said Port Director Carl Uchytil, “at what point do you want to stop funding good money after bad facility?”
Uchytil speaks for a lot of CBJ facilities that need maintenance, renovation, or complete replacement.
Parks and Recreation has $8.65 million worth of projects ranging from a new roof for Centennial Hall to Marine Park improvements to local trails.
Sales tax revenue has helped build Eaglecrest chair lifts. Photo by Rosemarie Alexander.The Eaglecrest Ski Area is hoping for $6.68 million for a three-phrase project that would renovate the crowded old lodge and build a new “Learning Center.” General Manager Matt Lillard told the Assembly committee that such a center is needed if Eaglecrest is going to manage its growth:
“Over the past years we’ve seen an over 3 percent growth yearly, and that is mainly coming from new users to the ski area,” he said.
Lillard said the center would house the Snow Sports School, which is enjoying 36 percent growth this year, as well as the rental shop, retail and repair shops, ticket sales, classroom space, staff offices, and a facility for the increasing number of adaptive skiers and boarders.
“We also feel that by having a learning center we will gain more users at Eaglecrest and hopefully increase our annual revenue by 50-thousand (dollars),” Lillard said.
Bartlett Regional Hospital is also vying for $5 million in sales tax revenue for a 21-bed mental health unit for children and adolescents, ages 5 to 17.
The library department wants to build in the Mendenhall Valley, at the Dimond Park site. A library has been part of the master plan for the area since the city purchased the land many years ago. The current valley library is in the Mendenhall Mall, where rent has increased 17 percent since 2009.
Library Director Barbara Berg called it “the elephant in the middle of our budget, essentially. We sacrifice collection money, computer money, everything else in order to be able to pay the rent.”
Berg said the mall has so many limits that it constrains programs the library can offer. The city’s portion of the project would be $4.7 million dollars, while most of the construction funds would come from the State of Alaska.
The Juneau Arts and Humanities Council is looking for $14 million for two small performing arts theatres. Former Assembly member Jeff Bush, now on the council’s board of directors, presented that request.
“We went out originally with a concept of a single theater or between 500 to 600 seats and the public user groups came back and said, ‘No, we need so many spaces that we would prefer to have two smaller spaces rather than one larger space,’ ” Bush said.
The only non-profit to submit a request so far is Sealaska Heritage Institute. SHI is asking for $3 million toward construction of the Soboleff Cultural Center to be built downtown.
The temporary 1 percent sales tax generates an average of $8 million a year, or $40 million over the five years it is in effect. Voters approved the last one in 2008.
It’s likely more projects will be proposed for those funds over the next few months. The Assembly will decide which projects will go on the fall municipal election ballot.
