Local News

Council reduces grants to nonprofit agencies

The Ketchikan City Council on Monday started its review of the 2013 proposed city budget.

In an effort to cut expenses, the Council decided in a split vote to reduce funding for community nonprofit agencies from 4 percent of the city’s sales tax revenue to 3.24 percent.

Council Members Sam Bergeron, Matt Olsen and Marty West opposed the move. Dick Coose, KJ Harris, DeAnn Karlson and Bob Sivertsen voted yes.

The lower level was the original amount recommended, but the Council boosted that to 4 percent during a previous meeting. Sivertsen proposed the funding decrease, which he said will match the level in the city’s 2012 budget.

“I debated whether I should bring this forward or not, but I think it’s the prudent thing to do at this particular point in time, given the financial situation of the city and the community,” he said.

Bergeron asked the Council to wait before cutting funds to nonprofit groups.

“This is one of the parts in the budget that are kind of near and dear to me,” he said. “I was wondering if I could encourage the Council member to consider taking this up a little deeper into the budget, when we get into some other things that we don’t have a really good feel about. Maybe we can identify some other cuts before we start with this one.”

Sivertsen countered that it’s not an official function of the city to fund agencies. He said that taxes and fees are going up, so the city shouldn’t increase its contribution to nonprofit groups.

Olsen argued that reports show nonprofit agencies, including groups that promote the arts, support the economy, providing a good return on the city’s investment.

The cut brings community agency funding down to about $325,000. The entire budget calls for spending $84.3 million, which is $6.8 million more than 2012.

Some of the increased costs come from voter-approved bond debt for the new fire station and library, as well as an expected 10-percent increase in health insurance premiums.

To pay for some of the new costs, City Manager Karl Amylon has proposed a 1-mill property tax increase.

“From the get-go, we decided we were going to suggest a status quo budget,” he said. “Over the last two to three years, we’ve suggested various cuts, which the Council didn’t embrace. Last year, we recommended a slight increase in the mill levy; that again was not endorsed by the Council. We let the numbers float. By the time we got through the second draft, your general fund reserves were down to $1.2 million.”

According to the city, the minimum reserve level should be about $3 million. That low reserve level led to the suggested mill rate increase.

Bergeron suggests that the city look into increasing employee contributions to health insurance, a continually rising expense. He said the tax burden on local residents is too high.

“I certainly feel that the city should provide health insurance and all the things that it does, but I think that some of those costs need to be borne by the people that work here, rather than the ratepayers,” he said.

Sivertsen said he doesn’t oppose raising property tax rates, but the Council still should look for cuts wherever possible.

“A mill rate is really an investment in our community,” he said. “If we’re going to continue to improve and build on our community, such as the fire station and library, we have to have a funding source to pay for that. But I do think that we have to be responsible and look this budget through very detailed and see if there are any cost savings that we can come up with.”

The Council also decided, again in a split vote, to repeal the city’s boat tax. Voting no on that issue were West, Olsen and Harris.

The city’s budget review process will continue through mid-December. The next special budget meeting is 7 p.m. Thursday in City Council chambers, with time for public comment at the start of the meeting.

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