$53 million city budget up for first of two public readings
Passage of 2017 spending will come after second reading in December
The city's 2017 budget was set for the first of two public readings Tuesday night.
The proposed budget, prepared by Brian Carlson, the city's finance director, was $53,334,314 - a whopping $44,345,314 million less than last year's budget.
The original 2016 budget was $63,155,108. That amount ballooned upwards with an infusion of $44,345,907 after a settlement was reached with the state's oil producers that ended almost ten years of litigation in a yearly dispute over the taxable value of oil prosperities.
The excess funds can only be used for debt service according to state law, which limits the amount of revenue municipalities are allowed to collect and spend, based on population.
Statutes state that "excess revenues be either applied to debt service or remitted back to the State of Alaska."
Ragsdale said the city's existing debt, mainly from bonds issued for the new harbor project, are enough to keep the city in compliance with the law.
"The City has sufficient outstanding debt to comply with this statute, and will therefore retain these excess revenues in 2017," Ragsdale said in the agenda statement.
The city nets 90 percent of its general fund revenues from taxing oil properties within the city limits.
There were no proposals to increase user fees for city operations such as the harbor.
This year's budget contains $36 million in general fund expenditures according to the agenda statement submitted to council for the first reading by city manager Dennis Ragsdale.
This includes funding for housing and land use issues such as the Aleutian Village Trailer Park needs, flood mitigation, personnel space issue, including steps towards a new fire station, economic development and deferred maintenance issues with city-owned buildings. The new harbor, code enforcement and museum needs also figure in the general fund spending.
This also includes a one-time payment of $2,000 for each full-time city employee.
The city is also embarking on what Ragsdale calls "an ambitious two-year CIP and Maintenance initiative."
Source: City of Valdez
The two-year plan totals over $21 million, which will be appropriated from the existing general fund balance rather than 2017 revenues.
The budget will be passed after it's second reading, which is slated for the city council's first meeting in December.
The council and city administration held nine budget workshops, beginning Oct. 19. All were open to the public.
Ragsdale's conclusion on the budget statement says he is comfortable with the city's financial direction.
"The submitted budget represents a balance between funding Council's top priorities and the pursuit of budgetary sustainability," he said.