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Mayor Sullivan’s proposed 1Q budget amendments focus on public safety, tax relief

Savings from 2010 free up funding for proposed amendments

ANCHORAGE- Mayor Dan Sullivan announced today the budget items he plans
to make a priority going into the 2011 budget revision process. The Municipality
of Anchorage (MOA) is uniquely positioned for this year's budget amendments
because of savings realized in the 2010 budget.

The mayor's proposed amendments represent a continued commitment to public
safety, as evidenced by his proposal to apply federal grant money to hire
additional firefighters and fund a police academy. Sullivan's amendments also
demonstrate fiscal responsibility by way of paying off long-standing loans and
liabilities dating from 2006-08 (see attachment).

In 2010, the MOA was able to trim costs by $11 million by working more
efficiently. As a result, Mayor Sullivan also plans to apply almost $7 million to
property tax relief. By better managing overtime and drastically reducing optional
spending such as employee travel, the MOA is now able to fund the
aforementioned public safety items without dramatically increasing property
taxes.

"I am immensely proud of the job department managers did last year in cutting
costs and implementing efficiency measures," said Mayor Sullivan. "Because of
their commitment to working smarter, we can fund important city services while
offering some relief to households hurting from high gas and food prices. In this
economic climate, every little bit helps, and we're pleased to be well-positioned to
fund these services without overburdening taxpayers."

Among the items for Assembly members' consideration are:

Fire Department:
-29 positions funded by the Federal SAFER grant
· $1.6 million federal grant, $203,000 tax dollars
-6 EMS positions for Medic #7
· Cost of $349,000 approved by voters

Police Department:
-$882,000 for 28-person Academy, training

Municipal Attorney
-$84,000 for Domestic Violence prosecutor

First quarter budget decisions will determine the basis for setting the mill levy for
property taxes. Under the Mayor's proposal and the already-approved school
district budget, property taxes would annually increase $21 per $100,000
assessed value.

Summary
Mayor's Proposed
First Quarter 2011 Budget Amendments
2011 Impact on Taxpayers
· 1.3% increase in total property taxes
o $6.2 million above 2010 for MOA and ASD combined
· Annual increase of $21.00 for every $100,000 of assessed value
· $6.5 million below Tax Cap

Expenditures to Meet Priorities, Unanticipated Expenses
Fund priority areas of service: Public Safety
· Fire Department: add 26 firefighters, three safety officers - $1.6 million Federal grant; $203,000 local
· Police Department: Training Academy for 28 new officers - $882,000
· Municipal Attorney: add Domestic Violence prosecutor - $84,000
· Retrofit of warehouse to store homeless camp property - $250,000

Voter approved increases
· Six EMS to staff new Sand Lake ambulance - $349,000
· 2011 bond-related O&M, programs - $708,000

Unanticipated increased costs
· Workers Compensation rate increase - $1.8 million
· Public Transportation increased fuel cost - $227,000
· Compliance with Federal watershed mandates - $340,000
· Police/Fire Medical Trust subsidy - $539,000
· New contracts for Animal Control and CSP/Emergency Shelter - $167,000

Priority: Efficient and effective government
· Efficiency RFP - $300,000

Ensure Forecasted Revenue is Still Accurate
$1.9 million less in revenue primarily due to:
· Tobacco tax - $700,000 less expected due to stockpiling prior to tax increase
· MUSA/MESA/Dividend - $819,000 less due to property's lower assessed value, less income
· Traffic and Court fines - 675,000 less due to lower Permanent Fund Dividend so less to garnish
· Investment earnings - $657,000 less due to lower interest rates

Use of savings leftover from last year due to good management of spending
· Property tax relief - $6.7 million
· Address liabilities incurred by prior Administration:
o Pay off Alaska Greenhouse land loan - $3.1 million
$3.7 million loan approved in 2006; due in 2011
First principal payment made in 12/2010
o Remediate contaminated soil:
Kincaid park - $700,000
· 2008 project disturbed lead-contaminated soils
Reeve Blvd. - $750,000
• 2008 PCB-contaminated soil transported to site

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