Before its regularly scheduled meeting Tuesday evening, the City and Borough Assembly was prefaced with a public hearing and special presentation on the coming fiscal year's budget.
Following up on its first review of the FY2017 draft budget on May 9, finance director Lee Burgess was accompanied by consultant Paula Scott, vice president of USI and a long-standing professional associate of the city.
Still weighing heavily on next year's budget is an expected 38-percent raise to Wrangell's group rate health insurance plan when the fiscal year begins in July. Consulting with Scott on different possible options, the city could look into setting up a health savings account option (HSA) where employees set money aside for future health expenses for a tax savings, or looking into a self-insurance option where the city would create its own pool in association with cheaper stop-loss coverage.
Scott pointed out there were a number of difficulties Wrangell could have to overcome before finding a solution which would save it money, from its relatively small number of employees, their generally advanced age, a lack both of local network providers and state carriers, transportation costs for medical emergencies and disclosure issues.
Despite that, Assembly members were intrigued by the self-insurance option, provided it could expand its pool to help better distribute overall costs. Scott informed them it would not be easy, and once initiated could be difficult to transition away from if costs became too great.
“It's a long-term commitment,” she said. High up-front costs aside, the city would need the support of its employees, both to opt into the program and to offer up health survey information to a third-party broker to help assess the plan's feasibility.
Under the current Premera plan, the rates are set to jump from $892,000 to $1,235,855 next year. The added costs, coupled with decreasing state support for the local jail, have in turn forced Burgess and city manager Jeff Jabusch to look to other means of cutting costs, from phasing out unfilled positions to forgoing a number of capital projects.
Assembly member Stephen Prysunka voiced concern that reducing jobs in the community could be harmful in the long run.
Speaking during the public hearing session, Stikine Inn owner Bill Goodale was in favor of the city raising new revenues, such as with the Harbor Department's rates (see Assembly story on Page 11). Building permits were another area Goodale felt could be raised. In Wrangell a permit application costs $10 for new residential construction, $5 for residential remodel, and $15 for all commercial, industrial or multifamily construction. Giving Ketchikan as an example, Goodale estimated permitting for the same projects undertaken at his hotel would have cost in the thousands of dollars. There, a more nuanced table exists for permitting, with costs ranging anywhere from $50 to $600 for various projects, with a ceiling of $800 for renewal of an expired or after-the-fact conditional use permit.
Another example he suggested could be raised would be the “bed tax” and transient moorage rates, which are largely paid for by visitors. On the other hand, he was less supportive of higher property and sales taxes.
“We're still growing. We're still moving forward. But we have to fund things at a level so we're moving forward,” Goodale said. Framing things in light of the state's budget crisis and subsequent cutbacks, he expressed hope that the city would not do likewise and instead step up to continue providing services. “I don't see anything in the state changing for years to come. Even if it does recover, we're going to be years behind if we don't do it for ourselves.
“Do I want to pay more? No, I don't. But I understand it's necessary,” he said. “I'd like to see us be innovative and proactive.”
Assembly member David Powell echoed that view, asking that Jabusch and Burgess look into areas where the city can make increases. He requested they have some ideas prepared for the next meeting, with estimates.
Fellow member Daniel Blake also suggested looking at other areas where cuts could be made, highlighting Wrangell Police Department as an example. Though it has only six officers on staff, Blake pointed out its expenditures ran better than $1.1 million, though only taking five officers' personnel costs into account. Those for the sixth were allocated to the corrections and dispatch budget, which costs the city another $312,000 net.
“That's really high for a five-officer department,” he commented.
Blake contrasted this with other departments, such as the Fire Department's $364,680 budget. He suggested the police has a rank-heavy structure, with only three patrol-level officers.
Currently the city draft budget is balanced for the new year. At the Assembly's request, Jabusch and Burgess will continue looking at different options ahead of its next meeting on June 14. A final budget needs to be approved and adopted before the start of the new fiscal year on July 1. Wrangell’s at 7 % sales tax ranks among the highest in the sate.
Reader Comments(0)