Chilkat Valley News - Serving Haines and Klukwan, Alaska since 1966

On Tuesday, the Haines Borough Assembly amended the working draft of the budget for the upcoming fiscal year to reflect a 50% reduction in sales tax revenue.

To offset the reduction, the draft includes several cuts including an anticipated one-month library closure in the fall or winter; a year-long closure of the museum to the public; elimination of seasonal employees in the tourism department as well as a decrease in the advertising budget and a $98,000 cut to the capital improvement budget.

The new working draft was approved 5-1 with Zephyr Sincerny the sole assembly member in opposition. At past meetings, Sincerny has said that, in addition to cuts, the borough should consider new revenue sources including a mill rate increase and taking money from the borough’s permanent fund.

Several residents testifying Tuesday also lobbied for revenue increases as an alternative to closing facilities.

At Tuesday’s meeting, assembly members Brenda Josephson and Paul Rogers proposed further cuts.

Rogers proposed zeroing out funding for the Chilkat Center, allowing it to return to its original owners, Alaska Indian Arts. The organization gave the borough the facility roughly 40 years ago under the condition that it be used as a performing arts center.

“We’re living in some difficult times and we need to take a look at what is essential,” Rogers said. He said in his opinion, services like the Chilkat Center, museum, library and pool are not essential when compared with policing, emergency response and the school.

Assembly member Stephanie Scott refuted this idea.

“I think that the activities that go on at the Chilkat Center are important for the people who live in Haines,” Scott said. She said loss of the community’s cultural centers could translate to a significant loss of population.

Josephson proposed tabling discussion of the Chilkat Center until the assembly obtains more information about the state of the building and the potential for outside funding sources like grants or the CARES Act to support operational costs this year.

The assembly voted unanimously to postpone further discussion until its June 9 meeting.

During public comment, museum director Helen Alten said it could be difficult to secure outside funding through grants this year since so many organizations are looking for ways to survive the pandemic. She gave an example of a West Coast-based grant that began accepting applications on a rolling basis but stopped accepting applications only a few days later after being overwhelmed with requests.

Rogers introduced a second amendment to remove all Haines Economic Development Corporation (HEDC) funding from the budget. Past drafts had included a 20% reduction.

Rogers said other organizations could step into the role of facilitating economic development in the community.

Assembly member Jerry Lapp said the borough should prioritize funding essentials before funding nonprofits, but he would be open to the possibility of directing CARES Act funding toward HEDC.

During public comment on the budget, HEDC board president Heather Shade asked the assembly to consider funding HEDC at $35,000, roughly 40% of the organization’s budget in past years.

The reduced funding would allow the organization to leverage outside funds, HEDC executive director Margaret Friedenauer said. Most grants require matching funds from the community, she said. For example, a recent USDA grant HEDC applied for would give the organization $20,000 but requires roughly the same amount in matching funds.

Scott proposed an amendment to fund HEDC at $35,000 that failed 2-4 with all but Scott and Sincerny in opposition.

Roger’s amendment to eliminate HEDC funding was approved 4-2, with Scott and Sincerny the two “no” votes.

Cutting funding for HEDC will not free up the funds for use in other parts of the budget.

During public comment, resident Tom Morphet said under current law, eliminating HEDC funding will not save taxpayers money. Funding for HEDC comes from a 1% sales tax that is directed toward tourism and economic development. HEDC funding could be redirected toward the tourism department, but it can’t be spent on something like the library or the police department, or returned to residents in the form of tax cuts.

Morphet said the best way to redirect funds would be by putting the question before voters, who approved the initial use of the 1% sales tax.

Josephson proposed two amendments to the Lands, Assessment and Planning Department to protect against potential growth in the department.

Josephson said her concern was that shifting the title of the department’s administrative assistant to “assessor in training” and transitioning the planning and zoning technician into the borough planner could, in future years, be used to justify staffing increases in the department.

“We still have the administrative assistant needs, and I’m concerned with adding an assessor-in-training position, especially when our current assessor hasn’t given notice that he’s planning on retiring anytime in the near future,” Josephson said. “I foresee in the future we’re going to be told, ‘Wow, we really need this administrative assistant position,’ and we’re going to add it.”

Josephson’s amendments reverting the assessor in training title to administrative assistant and restoring the planning and zoning tech to a year-round position were unanimously approved by the assembly.

The only budget increase proposed at Tuesday’s meeting failed to receive a second and died without a vote. Sincerny proposed adding $5,000 for the Haines-based Alaska Avalanche Information Center.

During public comment, resident Thom Ely expressed his displeasure with the assembly’s failure to fund the avalanche center, referencing the death of two Haines residents this winter and contrasting $5,000 with the $1 million pipe replacement project the assembly had approved earlier in the meeting.

Budget amendments approved at Tuesday’s meeting are still not enough to offset the loss of the state’s share of school bond debt. Before the governor vetoed school bond debt reimbursement from the state’s budget, Haines had been expecting roughly $400,000 to augment the borough’s $700,000 portion of the debt repayment.

The budget draft also doesn’t account for roughly $4 million in CARES Act COVID-19 relief funding that will be delivered to the borough in installments in the coming months. The assembly has formed an Ad Hoc committee to address the best uses for these funds.

The next budget meeting will take place on May 19.