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Dillingham City Council Approves Budget

KDLG News

The Dillingham city council unanimously passed its budget for next year Thursday night. But there’s some concern over the city’s deficit, which will approach half a million dollars for 2017.

The two biggest contributors to the city’s deficit are upgrades at the landfill and the surprise need for a new crane at the harbor. Those expenses might be classified as capital investments, making that deficit number a little easier to stomach. But council member Holly Johnson had other concerns.

“What caught my eye and actually made me go back through the rest of the budget is the fact that the fringe benefits came in at almost $71,000. Your standard salary is just a little over $89,000. That is creating a fringe rate for the city of 80.2 percent. That’s just unheard of."

Those fringe benefits include things like health insurance premiums, workman’s compensation and the city’s contribution to PERS, the state’s public employees retirement system.

“I don’t see how the city is going to sustain and continue with those types of fringe rates. A normal fringe rate is under 50 percent and even those are very, very high. It’s concerning," Johnson said.

The city budgets based on the highest anticipated costs, so there’s a little wiggle room in those numbers.  A single employee is cheaper to insure than an employee with a family. And there’s always the hope that workman’s comp claims will be minimal.

But basically, those are fixed costs. There’s not much the city can do to lower them and retain services people expect. Council member Misty Savo says she’s fine with those numbers. It’s what helps the city attract and retain well-qualified staff.

“We need to stay competitive with the public market and with other jobs that are being offered. We have a very small labor pool in this community and if we’re not offering a benefit package that competes with other organizations in this community, we will have no staff. I’m perfectly comfortable with where it’s at.”

The solution is new revenue. Something like a raw fish tax, which the city was able to levy, briefly, a few years ago. But if the city can’t find another way to get those dollars back into its coffers, mayor Alice Ruby says the next budget cycle will be a difficult one to navigate.

“We’re at the point of looking at probably looking at reducing services. As Misty says, we can’t do anything without having quality employees. We can’t keep cutting their training, cutting equipment and expect people to function by just being present. They’ve got to have the tools as well. So we are looking at some tough decisions in the next year if we don’t secure that alternate revenue source," Ruby said.

And it’s unlikely that the big annexation question, which could bring at least some fish tax dollars to Dillingham, will be settled by next year.