Proposed spending is down, along with projected revenue
After weeks of marathon meetings with staff, department heads and the finance department, John Hozey, Valdez city manager, rolled out the $39.9 million draft 2012 budget. Thus begins a new round of meetings – this time with the city council – to hash over the proposed city spending for the coming year.
The budget was published on the city’s website Monday according to Hozey. The document contains over 100 pages of proposed spending.
“Hard copies are available at city hall,” Hozey said during his report to city council at its regular meeting Monday night.
Seem like a very high figure? It is $1.1 million less than the city’s current 2011 budget and contains no cuts to services according to Hozey.
In the memorandum explaining some of the highlights of the budget, Hozey said city administration is forced to make assumptions regarding its projected revenues.
“Due to the volatility of property values on the largest portion of our taxable property each year (oil and gas property) we are forced to speculate regarding what we might get,” the memorandum said.
As a result, the 2012 budget is based on revenues from oil and gas properties from 2011, less 4 percent.
This is due to the fact that the state assessor devalued TAPS property within the city limits by 10 percent last year. Additionally, TAPS property tax valuations are currently in litigation, dating back to 2006.
The budget includes funding education at the same level as 2011, no cost of living increases for city employees and a sharp decline in contributions to the hospital (down 39 percent), capital projects (down 15 percent) and major maintenance (35 percent.)
The cost of energy is projected to rise according to Hozey’s memorandum.
“Next to personnel costs, the most significant challenge to maintaining a level spending year for the 2012 budget, is the cost of energy,” it said. “The city continues to experience large increases in the cost of heating and electricity.”
It was speculated the combined increase would total around $470,000.
The budget also contains major maintenance and capital improvement projects that will hopefully lessen the demand for energy consumption in city facilities in the future.
The proposal also includes an $850,000 transfer to the energy assistance reserve account, which funds the city’s popular energy assistance for all eligible Valdez residents.
Other miscellaneous funding proposals include $100,000 for road and sidewalk repair, $25,000 for disaster preparedness, and $50,000 for nuisance abatement, down $40,000 from 2011.
The first round of budget hearings begin Thursday, October 20, at council chambers. Check the city’s website for future hearings, which are scheduled to run through November 3. All meetings will be held from 6-9:30 p.m. and will be broadcast live on KVAK AM.
Hozey noted the complexity of “many nuances” of the proposed budget, much of which he says will be hashed over in the budget hearings.
“The public is therefore encouraged to attend the budget hearings or contact city hall with any requests for more specific information that might help them to better evaluate the proposal,” he said in the memorandum.