Mayor Bronson vetoes Anchorage Assembly add-ons to municipal budget

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Anchorage Mayor Dave Bronson today announced his vetoes for the Anchorage Assembly’s proposed Fiscal Year 2022 budget add-ons that he said reflect his administration’s focus on stopping the growth of government spending within the Municipality of Anchorage, while balancing the needs of the community.

The mayor’s vetoes put the city’s budget back under the tax cap by $110,000.  

According to Must Read Alaska sources familiar with the budget, the assembly created fictional funding sources for many of its add-ons. It’s likely that the Democrat-led Assembly will override the mayor’s vetoes at its next meeting.

“You can’t simply just say we are going to collected $2.5 million in extra bed tax revenue when the Muni Treasurer and entire Finance department have said those projections are not realistic. Additionally, they tried to fund building positions out of the building services fund which is already $11 million in deficit,” the source told Must Read Alaska. “These Assembly members must be using common core math, because it just doesn’t add up, nor does their math end with a balanced budget.”

The vetoes focus on Bronson’s priorities of public safety, an economically prosperous and business friendly community, compassionately resolving the homelessness crises, minimizing service impacts to the public while seeking savings, re-organizing for more efficient and effective government, and aligning costs.

The Anchorage Assembly’s assumed 2022 revenue amounts are not certifiable, the Bronson Administration said in a news release.

“Without a valid funding source and with the new COVID variant and bond rating concerns, my administration cannot validate or certify the funding source increases that the Assembly attempted to provide for in their amendments,” Mayor Bronson said.

“Specific to the two revenues, the recent announcement of the new Omicron variant discovered in South Africa late last week caused U.S. and Global investment markets to significantly decline in a single day,” said Municipal Treasurer Daniel Moore. “This new variant could very likely negatively affect projected revenues for both the MOA Trust and Room Taxes going into 2022.”

The Finance Department was not asked to review or comment on the revenue amounts assumed by the Assembly prior to its passing the budget amendments, sources said.

Moore issued the following statements about each proposed additional revenue source by the Anchorage Assembly:

MOA Trust Dividend Revenue

“Approximately, 1.5 weeks prior to the announcement of the Omicron variant the MOA Trust’s market value was $444.9M and it had annual YTD return of approximately 10.9%. After last Friday’s steep decline in the markets tied to the Omicron announcement, the MOA Trust’s market value declined in a single day by $8.2M and its YTD return reduced to 9.0%. Using the MOA Trust dividend projection model, the most recent projected 2022 dividend prior to the Omicron announcement was $19.1M. After last Friday’s news, the projected 2022 dividend declined $200K to $18.9M. The Assembly’s omnibus budget amendment assumed a 2022 Trust Fund dividend of $19.3M which is $400K short of the updated projection done post Omicron announcement. “

Room Tax Revenue

“Given what the MOA experienced in 2020 when Room Taxes were severely impacted by the initial effects of COVID-19 (i.e., a 56% revenue decline in budgeted 2020 revenue), the Finance Department recommends exercising significant caution in projecting 2022 Room Tax revenue in light of the recent announcement of the Omicron variant. Room Tax revenue cited in the Mayor’s Proposed is $24.5M for 2022. 2021 Pro Forma Room Tax revenue is currently projected to be $27.5M. Given the uncertainty that Omicron may have on future 2022 summer travel plans, it would be inadvisable to assume that 2022 Room Tax revenue would exceed 2021 revenue by several million dollars as the Assembly assumed in its omnibus budget amendment. Until more is known about the potential negative impact of the Omicron variant, 2022 budgeted revenue should remain conservatively budgeted at $24.5 as cited in the Mayor’s Proposed Budget and should be further revisited and potentially adjusted as part of 1st Quarter 2022 budget revision,” Moore said.

“I believe that government should begin right-sizing unsustainable spending to reflect the decreases in population that have occurred in the MOA over the past several years,” said Mayor Bronson.  “We can’t continue to spend more than we have. Now is the time to act, to eliminate the level of uncertainty Anchorage residents and taxpayers have felt for years. I will continue to seek a decrease in government spending and seek to take the burden off the tax cap for all people of Anchorage.”

From 2016 to 2020, government spending has increased in the MOA by approximately 20%. The MOA Unassigned Fund Balance went from a surplus of $11.2 million in 2016 to a deficit of $40 million in 2020. During the same period the Municipality of Anchorage’s population has decreased from 299,330 to 285,400 residents.

Mayor Bronson Vetoes:

OPERATING BUDGET

Addition of Inspector positions – The reduction of these positions is part of an effort to right-size the inspector staff to the anticipated work. This will not impact service. This is part of efforts to bring the Building Safety Service Fund (163000) to be self-sustaining and reduce its current negative fund balance of $11 million dollars.  

$128,873 increase to the Mayor Community Grants – This is a reduction to move back to the Mayor’s original proposed amount of $480K that achieves a balanced budget.

School Resource Officers – This veto does not reduce or eliminate the SRO program, it simply reflects that the program can be fully funded with reimbursement from Anchorage School District. Additionally the revenue source identified cannot be validated or certified.

Revenue Source Line 2: ($196,057), Municipal Manager, “Move cost for Director of Enterprise Services position to utilities and enterprises.” – This position was already budgeted as being funded by the utilities/enterprise departments via intragovernmental charges from the Municipal Manager but in amounts resulting from the IGC factors to be in line with cost causer/cost payer. The Regulatory Commission of Alaska stipulates that only allowable costs in line with approved methodologies can be charged to utilities.   

Revenue Source Line 4: ($149,579), Revenue – Tax, “Tax to the cap.” – To put the city back under the tax cap by $110K

Revenue Source Line 5: ($100,000), Contribution – MOA Trust Fund, “Increase dividend.” – The administration cannot validate or certify the funding source increases that the Assembly provided.

Revenue Source Line 6: ($2,5000,000), Revenue – Tax, “Increase 2022 Room Tax” – The administration cannot validate or certify the funding source increases that the Assembly provided.

Amendment #11 – $125,000, Fire, “Girdwood EMS increase contract to $507K.” – Insufficient funding source. Within Areawide service area, there are two Volunteer Fire Departments that we contract to provide areawide emergency medical services. During the 2021 budget process, Girdwood Volunteer Fire received an increase of $175,000 for EMS bringing their annual budget to  $382,500. Chugiak Volunteer Fire Department is receiving $177,897 through the 2022 Proposed Budget bringing their annual appropriation to $353,022.  

Mobile Crisis Team to Anchorage Fire Department – Insufficient funding source. The Anchorage Police Department can provide these services at a lower cost with no service impact to the community.  Additionally, this program is not fully functional at the Anchorage Fire Department  and cannot be fully implemented in AFD under the current constraints of our current collective bargaining agreements.   

Crisis Intervention Training for Whittier Police Department and Girdwood Fire and Rescue – Funding for 2022 cannot be used for training that occurred in November 2021.

$250,000, Health, “Increase budget for evidence-based grants to providers for child abuse, sexual assault, and domestic violence prevention programs, for a total recurring amount of $2M  – Insufficient funding source. Direct grants were given to Victims for Justice ($125K) and AWAIC ($125K). There will be a total amount of $2M for evidence-based grants to providers for child abuse, sexual assault, and domestic violence prevention programs.

Early Education Grants – This will leave a total amount of $1.25M for early education grants to providers. Anchorage School District has received a $110 million grant; much of which is unspent and can be used to fill these additional programs if the board chooses to fund it.

Shifting of Public Health positions from Alcohol Tax funding to general operating revenue – Reducing funding of Public Health personnel who serve our most vulnerable population during a pandemic is not in the best interest of the community and this reinstates the funding for these positions. These positions are critical in serving populations experiencing homelessness, substance misuse, and mental health crisis.  

Revenue Source Line 3: ($404,974), Alcohol Tax Fund Balance, “Unappropriated/unspent 2021 funds.” – The administration cannot validate or certify the funding source until the 2021 financial reports are reconciled.

Revenue Source Line 4: ($750,000), Police, “Move funds to MCT program” – This reinstates the Mobile Crisis Team program to the Anchorage Police Department. The Anchorage Police Department can provide these services at a lower cost than if located at the Anchorage Fire Department, with no service impact to the community.

Revenue Source Line 5: ($375,000), Health, “Decrease amount or operational costs of shelter, day center, and/or treatment center based on start-up timeline.” – This reinstates funding for the operational costs of a shelter, day center, and/or treatment center to address the immediate need in our homeless population.

CAPITAL IMPROVEMENTS

Park Bonds –  This action leaves $2.3M of bonds in the 2022 proposed Parks & Recreation bonds capital improvement budget. The administration continues the principle of not bonding more than we retire. Given the recent reduction to the municipal bond rating and to the projected negative outlook in 2022, the administration will continue to review the Municipality’s overall financial status, available funding sources, project plans, and the impacts to taxpayers. Additionally, the Anchorage School Board is proposing a $111M ASD bond package in 2022.  Voter-approved bonds prior to 2015 are not anticipated to have any State bond debt reimbursement. Both will result in increased taxes that will fall solely on Municipal property taxpayers.    

Traffic calming and safety improvements – We have multiple calming and safety improvements already underway including: Beaver Place ($175,000), E. 6thAvenue and Cherry ($403,544), Hartzell Road ($100,000), Adobe/Obrien Street ($103,000) Radar Signs for Traffic Calming ($132,000). There is also an additional remaining balance of voter-approved bonds for Traffic Calming of $975,776

UTILITIES BUDGET

The Assembly’s proposed increases creates increased pressure on the utilities’ net income, decrease the dividends to general government operating budget, requires an amendment to the general government operating budget, and requires an increase to the utilities’ already-approved rates.

1 FTE Senior Code Enforcement Officer – The senior code enforcement officer functions would be provided through Development Services and will be charged to SWS for services rendered at an amount anticipated to be significantly less than the cost of a full-time position. SWS will change office procedures to address code enforcement communication issues with our customers.  

Funding to the SWS Composting Program; Increase Operating Revenue ($130,000) – A current feasibility study is underway that is expected to be completed in 2022; until the cost is determined this expenditure is premature. The administration is willing to revisit this issue in the 2022 Revised Budget process when costs have been identified. 

Economic Development Grant to AEDC ($114,000) – This action funds AEDC at the pre-2021 levels taking into consideration the sale of ML&P. The proposed increase of $42,000 per utility creates increased pressure on the utilities’ net income, decrease the dividends to general government operating budget, requires an amendment to the general government operating budget, and requires an increase to the utilities’ already-approved rates.

THE MAYOR HAS NOT VETOED THE FOLLOWING AMENDMENTS  

  • $230,000 Assembly expenditures
  • $250,000 – Grants to AWAIC AND Victims For Justice
  • $20,000 Girdwood Valley Transit

20 COMMENTS

  1. The sheer arrogance of the Anchorage Assembly is breathtaking. They make up their funding sources through smoke and mirrors and expect it to be believed as if it came from the Oracle of Delphi. Of course, when that financial house of cards collapses, they will blame the Bronson administration. After all, they are in charge, right? Mayor Bronson is right in vetoing those egregious line item increases by the Assembly and showing how and why they are irresponsible in his veto message. Now it’s time for the media to weigh in and tell their readers what to think about their Assembly’s budget hikes. Will they do that? Probably not. But Mayor Bronson is being responsible. The Assembly is contemptible.

    Hey, Anchorage, you get the government you deserve! When will you stop voting for these utter fools to run your city?

    • Well said and exactly correct, Wayne! The Marxist Nine on the Anchorage ass-embly are little more than rogue and hyper-woke authoritarians who have little or no grounding in logic, common sense, decency or honesty. They are essentially criminals, and probably most of them are raging sociopaths.

      By the way, Wayne, if I may ask you this, was your mother named Janice?

    • I totally agree Wayne. Except for your last sentence “When will you stop voting for these utter fools to run your city?”
      .
      You misspelled the word “ruin”. 🙂

    • Problem is, they expect all those Gov’t extra covid $$ to bail us out, in which it doesn’t bail us out.. It just digs us deeper in debt, which their mathematical equations is VERY much questioned of how they come up with their answers.

    • Pretty sure most of them are fraudulent. We need to have a forensic audit. If we just focused on Anchorage, I believe enough fraud will be shown. This is why they do what they do, they cheat and nobody is held accountable.

  2. We should raise property taxes on the liberals in the city to pay for their fluff. They want it then they pay for it.

  3. The Depressed Anchorage Democrat leaders are painting a Doom and Gloom picture about his vetoes. I am like its not as Gloomy as they make of it. Give us a break with the Doomsday. Bronson’s vetoes isn’t the end of the world for any of us.

  4. The assembly needs to stop playing power games. Its not safe for the residents or business in Anchorage. I hope they get voted out next round and we get some reliable, educated, working people and not a group of PTA Antifas!

  5. There was a skit done in Monty Python’s Meaning of Life. A fat man sits at a table in a restaurant. He has eaten his fill. He is offered dessert. He accepts. He eats it. He explodes.

    • Is it just me that these assembly personalities and many of those in DC lack elementary math skills like addition and subtraction?

      I totally can see them with a suitcase containing thousands of IOUs, retitled “Dumb and the ANC Assembly”.

  6. The assembly failed in its duty.
    The budget as proposed fails to include even one single Dollar to build a Muni-Mint. To print the money they plan to scatter to the winds. Even though the nations so-called “president” is doling out cash like throwing grain to chickens He does not seem to have had even a single grain to deliver for the critical infrastructure this assembly’s insatiable appetite for spending needs.
    Who would accept the funny-money the Muni-Mint might spew? Obviously the voters of Anchorage who elected these wastrels.

  7. Veto override vote in 3… 2…
    .
    I want to know what is wrong with the Assembly. The City took a $37.7M hit in 2020 when the State did not provide bond debt servicing funds.
    .
    And, instead of cutting spending to accommodate, the Assembly increases spending?
    .
    Idiots.

  8. Won’t last long. A super majority (8) will take care of this. The same who unanimously supported the original budget. This isn’t hard.

    • Yes, by all means Brian, celebrate the ongoing destruction of Anchorage by bitter, arrogant, intolerant, rigidly dogmatic and zealous radicals and extremists.

  9. Okay, so inquiring minds want to know….
    Once the 9 override the veto (which they will) the mayor then gets the cash, but does he have to spend it all? Can he put all those items (the assembly put back) on hold, if there is not enough?
    And then there is the age old question of: “What ever happened to the ML&P sale millions????” Another Berky & Begich venture of a murky nature.

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