Big bucks allocated in city's midyear budget adjustment
Energy subsidy not fully funded for winter power bills but program not axed yet
The city budget got a $13.469 million boost Monday after the city manager presented the mid-year budget adjustment to the council.
The city council sets its budget before the end of the year on an annual basis, but it is based on projected revenues. By the middle of the year, city administration holds a work session with the council to adjust the budget based on real dollars. In lean years, it can mean cuts. This year was not lean, though funding requests far outweighed available dollars.
A total of $6,241,348 was available and allocated for spending this year.
The large leap between what was budgeted in December 2013 compared to the amount available now was the taxable value of oil related properties within the city limits, which were valued higher this year than the city had based its projected revenues on.
State property tax law puts a cap on the amount of revenue municipalities can spend on operations based on population, which Valdez exceeded this year. That means $7,228,507 that is collected may only be spend on city debt.
The other $6.24 million was unencumbered.
Near the end of Monday’s work session, which took place before the regular council meeting, John Hozey, city manager, presented his administration’s recommended budget adjustment.
Spending approved under the budget adjustment includes $250,000 to remediate mold in the attic of the Valdez Senior Center, half a million to repair existing dikes in the 10 Mile area, $150,000 for a new cover for the swimming pool at Valdez High School and upgrades to the boiler system. Additional spending for drainage and repair on Clark St., design for a new roof at the museum and upgrades to the high school bathrooms to bring facilities up to standard under the Americans with Disabilities Act totaled over $1.2 million.
The balance, just over $4.1 million, was allocated to fund the city’s 2015 Capital Improvement Projects.
The item with the highest price tag was $2 million allotted for costs for a new HVAC system for Valdez High School, which Hozey said was already in the design process.
Other expenditures included, but was not limited to, paving for the Barney Mayring park, underwater inspections for the Valdez Container Terminal and replacing the roof on the library.
Funding for the popular energy assistance program was delayed after Hozey addressed the issue late in the meeting.
Hozey said there is $200,000 left over in the fund after last January’s payout.
Hozey suggested several ways to fully fund the program, which has typically cost the city about $800,000 to fund.
Council member Chris Moulton said he was not in favor of the program in its current form, which pays out $550 yearly towards energy costs for individual Valdez households, regardless of income.
The program was started by council to help Valdez households pay for skyrocketing energy costs; it was also seen as a de facto property tax rebate.
Action on the energy assistance program was put off until council members receive a better picture of the city’s actual finances.
Typically during the city’s midyear budget adjustment, monies not spent during the previous year are rolled forward into the current budget.
That did not occur this year. Hozey said the city’s new finance director, Keith Greene, was not comfortable with the traditional way the city has accounted for unspent revenues from previous years and that the accounting system was under review to better balance the city’s books and how it handles rollovers from previous years, under consultation with its former auditing firm, Altman Rogers.
“It’s enormously complicated,” Hozey said, and assured council the findings would be brought forward as soon as it is available.
He told council that the amount in question from last year’s budget which could be made available for spending in 2014 totals around $1.7 million.
A second issue also complicating the city’s already complex financial picture was the pending work session with council and administration to discuss possible funding sources for the new boat harbor.
Hozey had proposed a council work session for Tuesday evening, July 8, which would occur after the Valdez Star goes to press.
The city’s original 2014 budget, which was passed by council Dec. 9, 2013, totaled $49,674,280.