The city is refining a 2021 budget that would close an over $1 million gap with broad spending cuts and a withdrawal from the city’s permanent fund. A draft budget presented to Cordova City Council at a Wednesday, Dec. 9 work session included a 5% increase to fees for water, sewer and refuse services, but decreased a proposed withdrawal from the permanent fund from $900,000 to $755,000.
The city’s budget gap is mainly the result of a withdrawal of state contribution toward school bond debt reimbursement, and a drop in raw fish tax revenue following a poor fishing season.
“We need to try and start figuring out how we can sustain our community in this new world that we are in, without help from the state,” Councilwoman Cathy Sherman said. “I think this is a great opportunity, with a new manager, to re-evaluate some of our departments.”
A public hearing on the budget is scheduled for 6:45 p.m. Wednesday, Dec. 16 at the Cordova Center’s community rooms. Comments, limited to three minutes, can also be made by phone at 907-253-6202.
The draft budget included a 6% reduction to funding provided directly to local schools by the city. Also included was a 4.76% cut to in-kind transfers — city-provided services like water and sewage to which schools are granted a certain amount of unpaid access.
Retained from previous drafts was a hiring freeze on three full-time positions in human resources; parks and recreation; and law enforcement, respectively. Although an August community survey by the city indicated residents were concerned about police understaffing, it remains uncertain whether the council will include funding to immediately hire an additional police officer. The Cordova Police Department currently has a staff of four, including interim Police Chief Nate Taylor. The Dec. 9 draft budget also included a 7% cut to law enforcement spending.
“I support a fourth officer,” Councilman Tom Bailer said. “I could see myself taking more money out of the permanent fund to pay this year. My problem is, what do we do in 2021, 2022, 2023? Do we have the revenue to maintain that size of a police force?”
While determining how to provide police with the resources they need to do their jobs, the city also has an opportunity to re-examine the role of police in the community, City Manager Helen Howarth said.
At the Dec. 9 work session, a reluctant consensus emerged in favor of a significant withdrawal from the city’s permanent fund. Howarth said she was fairly confident that a $755,000 withdrawal would be sufficient to create a balanced budget, even assuming the city does not receive additional Coronavirus Aid, Relief, and Economic Security Act funding.
“I dislike taking that much out, but… I don’t think we have a whole lot of choice,” Councilman David Allison said. “If we had not had the CARES funds this year, and our revenues ended up the way they were, we would have pulled $1 million out of the permanent fund this year just to make it to today.”
Also under the microscope was a 6% tax on alcohol, tobacco and marijuana implemented at the beginning of the year. The tax was justified, in part, on the grounds that revenue would be used to offset the social costs incurred by consumption of those substances. However, some council members said it was unclear whether funds from the tax had actually served that purpose. If the tax can’t be used to provide resources in relevant areas, like policing, health care and social services, it should be repealed, Allison said.
“This goes to our credibility,” Bailer said. “We need to be careful about these things, just throwing it in the general fund.”
The work session also allowed council members to identify figures in the budget in need of correction or updating. Howarth said a revised draft budget would be provided to the council by Saturday, Dec. 12.
“I really appreciate the work staff are putting into this — I can see the stress on Helen’s face!” Bailer joked. “This is not easy, and it’s not a perfect system, but we’ve got to work through it.”