Unalaska's budget process kicked off in earnest Monday night, as city officials proposed a $30.8 million operating plan for fiscal year 2020.
The budget is projected to run up a deficit of almost $8 million, even though most revenues and expenses are expected to remain status quo.
According to Interim Finance Director Bryan Stafford, the gap would come as a result of big contributions to local nonprofits and the city's capital and major maintenance plan (CMMP), which funds infrastructure projects.
"This is just one of those years where if you do all the CMMP [projects] and the nonprofits — and keep the revenues as they are, and keep the expenses as presented — you're dipping into the piggy bank," said Stafford.
That would mark a departure from recent years, when the city has posted comfortable surpluses. But it's still unclear if the City Council will support a deficit budget.
Officials have already cut proposed capital spending to $15.8 million after councilors balked at the original $23.5 million price tag — and Councilor Shari Coleman said she wants it reduced even further.
"The playground?" she asked, referring to a renovation project. "Sorry, but how critical is something like that now when we're looking at a looming, major problem?"
Coleman was alluding to the state budget proposed by Gov. Mike Dunleavy, which calls for an end to the practice of splitting lucrative fisheries taxes between the state and coastal communities.
Under Dunleavy's plan, Unalaska would lose about 27 percent of its total projected revenue — or about $8.3 million. But Mayor Frank Kelty said he isn't too worried, citing a lack of legislative support for the idea.
"We also have our undesignated fund balance," said Kelty. "It's around almost $50 million, so we do have some cushion."
Councilors will continue discussing the budget — and how conservative it should be — at another meeting Tuesday, March 26 at 6 p.m.
They're slated to hear funding requests from 12 community nonprofits, which are asking for almost $2 million in total. That's about $700,000 more than the city is hoping to spend under its standard funding formula for local organizations.
