On Wednesday, the Skagway Assembly passed a budget in which a $4.2 million general fund deficit is covered by the town’s wealth of sales tax and cruise ship passenger tax revenue. The spending plan includes conservative funding for capital projects, reductions to most borough departments, and a shorter sales tax holiday.
The assembly held this fourth budget hearing simply because they made so many changes to the spending document over the past month. With some work, they got the general fund shortfall down far enough and sales tax leftovers up high enough to balance each other out, with a $40,000 cushion.
“That was a daunting task, hammering out the budget,” said Assemblyman Spencer Morgan. “It took a long time. There were some tough cuts to be made.”
The tough cuts include some shuffling in the capital projects list. Instead of dedicating sales tax revenue for $1.8 million in State Street water and sewer upgrades, the assembly is hoping to get a state loan. They didn’t budget any money for capital project expenses like rec center expansion engineering or a solid waste/recycling/RV park facility. They zeroed out funding for Broadway sidewalk repairs.
The assembly also asked all borough departments to trim their budgets by five percent. This week, the recreation center asked to reverse some of the proposed cuts. The center is raising its rates, so the department wanted to use the expected additional revenue in its budget. But the assembly turned that idea down in a 4-2 vote.
“We are already funding the rec center quite a bit above and beyond what they’re bringing in,” Morgan said.
The assembly also didn’t budge on its downsized retail sales tax holiday. They chopped the tax break period from six months to two. That should bring in about $145,000 in revenue. Business owner Jeff Brady asked the assembly to consider a three-month break, to fit within the financial quarter.
“I don’t mind you trimming it back, but it works better for businesses if you just use it quarter by quarter, rather than two months at a time,” Brady said. “It just creates headaches.”
There were a few pots of money the assembly reinstated over the last couple meetings. They added $20,000 for the Princess Sophia commemorative exhibit. The museum display tells the story of the 1918 shipwreck.
The assembly also restored $20,000 for a climate action plan. The money was originally part of an $80,000 comprehensive plan line item that was zeroed out. A group of Skagway residents petitioned for the assembly to at least reinstate funding for a plan focused on local climate change issues.
But that expenditure didn’t sit well with everyone. Steve Jaklitsch created his own petition.
“I started a petition to oppose this $20,000 spending spree on greenhouse gas emissions,” Jaklitsch said. “I think that money could be spent a lot better in a lot more constructive ways.”
But the assembly left the $20,000 in the budget.
The FY 18 spending plan was unanimously approved.
Wednesday’s special meeting ended with two executive sessions that were postponed from the previous week. The assembly spent an hour and a half behind closed doors completing borough manager Scott Hahn’s evaluation and talking about police chief duties with Chief Ray Leggett.
After the private sessions, the assembly voted to provide housing for Hahn for the duration of his contract, which is up next June.
Back in April, the assembly voted against extending the city-provided apartment. But Mayor Mark Schaefer said after a successful performance evaluation, the assembly changed its mind and decided to reinstate the housing benefit. The manager housing costs the borough about $14,000 per year.
The assembly did not say anything publicly about the police chief discussion. Schaefer says Chief Leggett requested the conversation with the assembly. He declined to comment further because it is a personnel matter.