Borough passes budget

MAT-SU -- The Mat-Su Borough Assembly passed its annual budget and lowered its mill rate Thursday, the second time in two consecutive years, but it remains to be seen whether cuts from Gov. Frank Murkowski to state revenue sharing funds and the school bond debt reimbursement program will bring the budget ax swinging once again.

The assembly adopted a mill rate of 11.483, down from last year's 11.702 mill rate. The non-areawide mill rate, paid by borough residents who live outside the boundaries of Houston, Palmer or Wasilla, also went down, from .0.443 to 0.428. With the average borough property value totaling $141,070, borough finance director Tammy Clayton said the mill levy for someone living outside city limits in the borough will be $1,680, not including taxes paid to road or fire service areas.

The reduction came despite several amendments by assembly members at the group's Thursday meeting that tacked on more than $190,000 in supplemental funding. The add-ons included $50,000 in funding to provide a new command and support vehicle, a six-wheeler and fire equipment for the Butte Fire Service Area, a new land and resource management position for $55,740, the restoration of $25,000 in funding for the Valley Communities for Recycling Solutions program, additional positions or hours for the Sutton, Talkeetna, Trapper Creek, Willow and Big Lake libraries, $15,000 to pay for printing and mailing out election brochures to all borough registered voters, and added funding for travel in the administrative, mayoral and assembly budgets to cover additional lobbying trips to Juneau and the increased cost of plane tickets. The added travel allowance -- totaling $24,000 -- was added after the $60,000 in funding for a federal lobbyist was cut.

Assembly member Bill Allen, the newest member of the assembly, proposed the amendment. He said he believed it was a job the borough manager and mayor could handle.

"It's nice to have a lobbyist in Washington, D.C.," Allen said, "but we have a congressional delegation that has a staff of more than 150 … if they can't cover the needs of the Mat-Su Borough, then we have a problem."

The amendment passed with assembly members Jim Colver and Kelly Lankford-Ladere in opposition.

But what may be most interesting about the budget was what did not happen. Two key items were addressed in the budget process that touched on volatile state and local issues. The first was an amendment put forward by assembly member Jody Simpson to add a budget analyst position to the borough's finance department at a cost of about $67,000.

The position, as explained by Borough Manager John Duffy, would help the borough's finance department monitor the existing budget and build a new budget for the Mat-Su Borough. In addition, the person would keep tabs on ongoing expenditures and look for ways to make the borough more efficient. But the position's budgetary oversight wouldn't be limited to just the borough.

"We also propose that the budget analyst would do some things with the school district budget," Duffy said.

"I came very near to requesting a financial review of the school district this year," Simpson said. "I'm in favor of this position instead."

Simpson said she liked the analyst position because she believed both bodies could benefit from added attention to the budget. And, she said, she felt it was time both received a budgetary review.

"This is not a denigration of the school district …" Simpson said. "The last management audit I saw of the borough was in 1999 … the last management audit done for the school district was done in 1985 -- we're now 25 years out."

Other assembly members took to the idea, but some suggested using a consultant instead. In suggesting the use of a consultant, Assemblyman Bruce Bush pointed out that no matter who reviewed the district's budgetary practices, it may be of little consequence.

"We can find everything wrong with the school district, but we can't do much about it," Bush said. "I can't see where this position is going to do us any good -- we can get information but we can't do anything about it."

Other assembly members pointed out that the position would be at the borough's disposal as well.

"Staff always has ways they can save money -- this person can point out the ways," Assemblywoman Mary Kvalheim said. "Let's have it for a year and see what happens."

The amendment passed through a 4-3 vote, with assembly members Talis Colberg, Jim Colver and Bruce Bush opposed. Simpson moved for immediate reconsideration of the motion and that motion failed with Colberg and Colver in support. But the position didn't stay in the budget for long. After assembly members discussed the remaining five amendments, Borough Mayor Tim Anderson announced his veto of Simpson's amendment.

Anderson said he would prefer to hire someone to perform an audit and said he was reluctant to add a position to the finance department that had not been requested by its director and that was aimed at the school district.

Although several assembly members objected to the veto, the motion to override the veto failed with only four votes of the needed five in support. Assembly members Allen, Kvalheim, Kelly Lankford-Ladere and Simpson supported the move to override the veto.

While addressing an increasingly sensitive local issue, the assembly also touched on a fiery statewide topic -- how the state budget will change from what the Legislature passed and what Gov. Frank Murkowski will sign. After receiving news that the House did not pass a sales tax measure last week, Murkowski issued a list of proposed cuts that included $22.2 million in statewide revenue sharing and his previous proposal of cutting 10 percent of the amount of funding the state provides toward school bond debt. When bonds were passed by voters to pay for a number of school projects, the state had agreed to pay 70 percent of the reimbursement costs. Murkowski lowered that to 60 percent in his budget proposal, but legislators restored it to the full 70 percent.

The borough budget, Clayton said, was created when the 10 percent was still up in the air, so she did not list that money -- which amounts to $690,000 -- as part of the revenue the borough would receive. Colver, Thursday, made a motion to restore that funding, stating that the borough should stand with the legislators and trust that Murkowski will keep the full funding in place.

Colberg suggested keeping the money in the budget to prepare for the probability that the cut would be made instead of being forced to make painful cuts afterward. When asked what he recommended, the borough manager agreed.

"Should you do this … should the governor follow through, recovering this is going to be painful," explained Duffy. "It would mean we'd have to go into reserves or make this amount of cuts."

Anderson said he understood the difficulties, but agreed with Colver that the assembly should take a stand and trust the governor to follow through on a commitment the state made.

"This is a different issue than just saying 'We're going to cut state spending,'" Anderson said. "The promise was made to voters on this."

Ladere said she didn't feel the assembly could vote on speculation, that they should consider the facts at hand when dealing with the budget. And the facts, she said, are that the legislature has passed a budget in which the bond debt reimbursement is fully funded.

"The correct thing to do is to vote on the aspects of the budget at this time," Ladere said.

The assembly agreed, with Colberg opposed, to add the revenue back into the budget, trusting that the governor will fully fund the state's share of the bond debt. If the governor reduces the state's share by 10 percent, Duffy said Friday, the borough no longer has the opportunity to spread the added cost out among borough taxpayers.

"We can't change the mill levy. It has to be dealt with either by reductions or through reserves," Duffy said. "The mill levy is set, so we'll have to look at other ways of addressing it."

Murkowski has 30 days to address the budget.