Draft city budget shows seven-mill shortfall
The Nome Common Council and City administration are penciling on next year’s budget to avoid a raise in the property tax mill rate from last year’s 11 mills to around 15 mills to meet the cost of city services in the coming spending year.
Preliminary budget planning shows a possible $2.4 million deficit in the City’s FY 2020 general fund revenue stream against projected expenditures according to Julie Liew, Nome’s finance director.
Curing the shortfall either by raising the mill rate, cutting services, or appropriating the $2,4 million from the fund balance, or a combination of fixes to maintain a balanced budget.
According to a memo from Liew, draft budget preliminary assumptions for revenue reflect decreases in state municipal assistance, recreation revenue, museum revenue, a slight decrease in investment interest earnings and increased spending for equipment replacement or repair.
Expenditures include overall increases of 11 percent from FT 2019.
The Council spent over four hours in work session Monday, April 29, going over figures in the first draft budget comprising a rough cut memo listing budget highlights by departments, backed up by a corresponding line item document.
A big ticket item in budget planning is the City’s local contribution to Nome Public Schools. Assumption that the contribution would be $2,5 million rather than a preliminarily discussed figure of $3 million drew a big “yikes” from Nome Public Schools Superintendent Jamie Burgess, school board members in attendance and Councilwoman Jennifer Reader, former member of the NPS board.
Burgess had prepared five budgets, she said, reflecting changes in the funding picture—one based on continued toward funding as last year, another budget based on whacking of money at the state level by Gov. Michael Dunleavy, plus two other budget scenarios.
The Council suggested Burgess submit a budget assuming a $3 million local contribution from the City, which the Council would confirm or cut by $500,000 by May 15 and make final by May 31, according to law. Burgess is making an additional cut of $375,000 anticipating the Legislature may cut the education component of the Nome Youth Facility program.
A $2.5 million contribution comprises a required contribution of $1,114,206 plus $1,385,794 in addition.
By City law, deadline for the Nome Public School Board to submit next year’s school budget to the Council falls on May 1 each year. In turn, the Council has until May 31 to determine the total amount of money it will make available as a local contribution and issue a statement with the sum to the school administration.
This year, the City’s budget crunch has inserted another deadline—the Council has to render an earlier decision to allow Superintendent Burgess to meet a May 15 deadline to shuffle staff to cover instructional programs and notify some teachers of a notice of a reduction in force, RiF for short. Should the Council decide to cut $500,000 to reduce the local contribution to $2.5 million, then find more money later, staff can be added back, but teachers who have received notice will likely be scrambling to find work elsewhere.
The FY2020 preliminary budget shows a contribution of $75,000 to Nome Pre-School Association.
The Council will have a regular meeting May 13 when they will likely make final their decision on whether the local contribution to schools will be $2.5 million or $3 million and inform Burgess before the possible need to issue pink slips by the May 15 deadline.
The Council is following a budget calendar that began Jan. 14 and concludes on July 1 when the City administration and Council will switch to budget administration and monitoring. The budget calendar contains 29 budget-related deadlines and work sessions.
The Council will set the mill rate on June 10.