Juneau officials have formally begun the city’s budget planning for the fiscal year that begins in July. The starting point for that is reconciling the budget the Juneau Assembly passed last year with what actually happened.
The pandemic has not lent itself to predictable financial planning.
The plan last year was to spend $5.4 million out of savings to balance the budget. On top of that, the Juneau Assembly authorized about $19 million in additional, unplanned spending over the last 9 months.
And yet, mostly because of federal relief money, the city is headed into the new budget cycle with $6.9 million more cash on hand than it started off with.
“We’ve got really highly volatile numbers,” Juneau City Manager Rorie Watt told the Assembly on Wednesday. “It’s been very difficult to project revenues and expenditures. And it’s felt like everything has been a moving target.”
He said there’s been inflation, home values have skyrocketed and tourism numbers have been uncertain. In some cases, supply chain disruptions and labor shortages have meant the city couldn’t spend money it was supposed to.
For example, $4 million budgeted for payroll and other personnel costs didn’t get spent, mostly because of vacancies and pandemic-related closures of city facilities.
“It is a really unusual budget. It is really, really unusual,” Watt said. “Let’s acknowledge that uncertainty, let’s not overreact. I think the public appreciates that stable, deliberative governmental approach.”
Watt said it should be a goal to reestablish the city’s pre-pandemic budget discipline. That is, avoid taking up funding requests outside of the annual budget process.
“Definitely not our prior business practice,” Watt said. “Our prior business practice would’ve been, ‘Sounds like a great idea. Get back to us in April, and we’ll consider that in the context of all of our other budgetary issues.’”
Carole Triem, who chairs the Assembly Finance Committee, spoke up: “Yeah, you hear that, everybody?” She and the other Assembly members laughed. “Make note of that.”
The committee has budget meetings planned for every Wednesday evening through at least May 18.
Even though the city had a lot of unplanned spending, unplanned revenue was even higher.
“That is all federal money,” said City Finance Director Jeff Rogers. “No matter how you look at it, it’s federal money that is making that difference.”
Specifically, money from the American Rescue Plan Act. Because of the surplus, the Assembly decided last month that it’s comfortable committing another $19.9 million of its cash on hand to various city projects.
The city manager proposed this list:
- $6.3 million in initial funding for a new city hall,
- $5 million for the city’s affordable housing fund,
- $3 million to address escalating costs for renovating the Augustus Brown Pool,
- $1.5 million for information technology upgrades for city government,
- $1.3 million to help with escalating costs for the Teal Street Center project,
- $1 million for future federal matching grant money,
- $1 million for matching grant money for a multi-use path through the Lemon Creek area,
- $500,000 for a consultant to begin work on upgrading the Juneau Police Department’s aging radio system, and
- $250,000 for planning related to the North Douglas Crossing.
The Assembly may make changes to the manager’s list. For example, Assembly member Greg Smith said last month he wants to consider financial relief, particularly for needy and working class families.
“It maybe wouldn’t be spending. It would be slightly reduced revenue, and that might be something regarding the property tax, or some type of relief to citizens, just as we are seeing inflationary costs and costs for fuel and gas,” he said.
Smith said on Friday he’s still evaluating options.
The Assembly did decide to hold itself to the $19.9 million figure as a ceiling.
