Cordova City Council has approved a budget for 2021, though many questions about the city’s financial position remain unanswered. At a Dec. 16 meeting, City Manager Helen Howarth urged the council to revisit the budget during the first quarter of the new year to see if some cuts could be reversed.
The city’s more than $1 million budget gap was principally the result of low raw fish tax revenue following a poor fishing season, and of the state’s withdrawal of school bond debt reimbursements. However, a state budget proposed by Gov. Mike Dunleavy would, if passed in its current form, restore 50% of the city’s school bond debt reimbursements, amounting to about $460,000. Additionally, the city is expected to receive further Coronavirus Aid, Relief, and Economic Security Act funding, officials said, though the quantity and timing of that funding remains uncertain.
Throughout the budgeting process, the city endeavored to close this gap without layoffs or raising taxes.
“Ultimately, we want to plan not only a balanced 2021 budget, but look forward to the costs and the impacts of a 2022, and beyond, budget,” Howarth said. “How do we become sustainable and support the community’s needs at the same time? It’s not an easy task.”
The draft budget Howarth and Finance Director Ken Fay presented to the council included a $773,452 withdrawal from the city’s permanent fund, down from $900,000 in a Dec. 2 draft of the budget. However, this $773,452 withdrawal was eliminated by an amendment proposed by Councilman David Allison.
By May, the city will know how much CARES Act funding it will receive, and how much revenue to expect from sales tax and raw fish tax, Allison said. At that point, a withdrawal from the permanent fund could be made if it proves necessary, he said. However, if the city’s revenues are high enough, a withdrawal could be unnecessary. Allison’s amendment passed five-two, with Vice Mayor Melina Meyer and Councilman Jeff Guard opposing.
“I’ve got some concerns with taking money from the permanent fund at this time, when I don’t see a critical need in taking it, at least in the first half of this year,” Allison said. “We don’t know what’s going to happen. We don’t know if we’re going to get CARES funding that could free up some of the emergency responders’ funds. We don’t know what our expenses are going to be.”
Despite these uncertainties, the council unanimously approved the $16.42 million budget, which included a 6% cut to funding provided directly to schools and a 7% cut to law enforcement spending. A 5% increase to fees for water, sewer and refuse services was unanimously passed in a separate resolution. This increase was part of a previously approved plan to increase utilities fees by 5% per year for several consecutive years.
“This budget tonight is missing a lot of key things,” Meyer said. “There’s just a lot of gaps, and I worry about trying to fill one gap or two gaps, and then we don’t hold to our commitment to revisiting this budget. I still think it needs a lot of work, but I know we have to pass a balanced budget.”
City Councilwoman Cathy Sherman thanked community members who had taken the time to write letters to the council, since lockdown measures have interfered with some more casual methods of communication. Ahead of its Dec. 16 meeting, the council received several letters urging the hiring of an additional Cordova Police Department officer.
The council postponed deciding how to comment on a draft resolution by the Exxon Valdez Oil Spill Trustee Council that would allow EVOS funds to be used for restoration actions outside the zone most directly impacted by the spill. The proposed trustee council resolution would amend the group’s 1994 oil spill restoration plan to allow funds to be used to address damage to ecosystem services and mobile fish and wildlife populations whose ranges overlap with the spill area.
“I think EVOS needs to meet in Cordova,” Meyer said. “We’re the affected community… We need more time to discuss these things and learn about them.”
“We just haven’t had a chance to look at this, and for good reason,” Mayor Clay Koplin said.
Discussion was briefly interrupted when a telephone participant exclaimed, “For good reason? You’re an idiot!” before hanging up at the mayor’s request.
The city will not be able to sustain “business as usual” in the future without greater stability in revenue, Howarth said. Howarth has identified U.S. Economic Development Administration grants that might benefit the city, she said. The city will also receive some state resources for landslide safety, she said.
“I think we passed a decent budget, but a budget that does need to be looked at,” Meyer said. “I’m not 100% there on our budget yet, and we passed it. That’s not a good feeling, but 2020-2021 kinda does that to all of us.”
