Borough releases $187 million budget

MAT-SU -- The budget handed to the Mat-Su Borough Assembly last week by Borough Manager John Duffy doesn't put forward any major changes or reorganizations, but it seeks to address some of the ongoing issues facing local government.

The manager-proposed budget totals nearly $187 million. That's an increase of $4 million over last year's adopted budget, but funds from other areas allowed Duffy to keep the current levy of 11.702 mills in his proposal.

About $3.5 million, Duffy said, was lapsed from last year, and the borough generated higher-than-expected interest earnings on investments. The borough also projects about $800,000 in added revenues will be earned from a recent increase in ambulance transport fees -- money that was already absorbed by the proposed budgetary increases.

"That's what saved us," Duffy said. "Next year's going to be difficult."

Nearly three-fourths of the overall budget will go to fund education. In the proposed budget, Duffy said, the maximum borough contribution allowed by state law -- through a funding formula based on the value of property in the borough as determined by the state -- has been figured into the equation. In addition, reimbursements for school debt and related expenses are factored in to the borough budget, and that's a number that Duffy said may change, depending on what percentage of school debt the Legislature agrees to fund in the coming weeks.

Last year, 12 new positions were added to the borough's list of employees -- many related to the reorganization of the public safety department and adding hourly wages for fire and emergency services volunteers. The reorganization, along with setting aside 25 percent of borough operating expenditures for emergency funds, were the two biggest issues dealt with in last year's budget.

This year, Duffy said, things are a little quieter. He projected that the budgetary discussion will likely focus on the proposed addition of nine employees, some funded by grant money.

"It's difficult to add new positions in local government -- it just is," Duffy said. "We are fortunate because we have a mayor and an assembly who understand the additional workload coming on because of our population growth."

Despite the hurdle it proposes, Duffy and his staff believe the new positions are warranted. Most, like the Animal Care and Regulation enforcement supervisor and code-compliance officer positions, are directly linked to growth. Others, such as the two solid waste inspector positions and chief appraiser, are required by applicable law. A full-time fire service area assistant position for Big Lake and Meadow Lakes would be paid for outside of the general fund, and a full-time, two-year employee who would address the effects of trees killed by the spruce bark beetle in the borough would be paid for by a federal grant.

Six positions, Duffy said, were eliminated before the budget was printed and sent to the assembly. Those include two positions in the finance department, two in planning, a water safety instructor and an emergency services data specialist. Cutting the positions, he said, saved nearly $250,000.

Other cuts were made as well, including one to a project several assembly members have spoken in favor of -- the construction of a new Trapper Creek ambulance and library building. That cut added $350,000 back into the working budget. Other cuts in funding requested by department managers were also made, with a total of nearly $1.2 million cut from the budget before it was handed to the assembly. It was a painful process.

"All of these, in my point of view, are needed today," Duffy said.

He, along with finance director Tammy Clayton and other borough staff, are continuing to stress the importance of diversifying the borough's tax base.

"In future years, we still need to explore other alternatives of generating revenues for diversification purposes," the letter of submittal accompanying the proposed budget states. Duffy said projects on the horizon may just do that.

Since Valley Hospital Administration's partnership with Triad, LLC would remove the hospital's nonprofit status, the new facility would not retain a tax-free status. To the borough, Duffy said, that means about $1.3 million in tax dollars each year. The borough is also a proposed location for a juvenile residential treatment facility, he pointed out, and a bill put forward by Sen. Lyda Green, R-Wasilla, that would expand Alaska's existing correctional facilities would also create stimulus for the borough's economic engine. Bringing those projects to fruition, he said, in addition to moving forward on borough projects such as Port MacKenzie and Hatcher Pass may provide that essential diversity. In a time in which the nation is going through an economic slump and the state government is tightening its belt, Duffy said he hopes the projects will provide the necessary solution.

"Not only are these projects important to diversifying the economy, they're important to avoid a downturn," Duffy said. "We'll either reduce our downturn or we won't have it."