State Pressures on Local Municipal Finance. Jim Williams, Chief of Staff

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1 State Pressures on Local Municipal Finance Jim Williams, Chief of Staff November 2,

2 Mayor s Office Mission - Respecting and protecting the best interests of the community, balanced with individual freedoms - Provide principled community leadership - Provide community-driven, cost effective and efficient government services 2

3 North Pole Branch Library 3

4 Polaris Sculpture Tanana Lakes Kiwanis Field Transit Bus Stop 4

5 Parks & Park Lighting Pedestrian Bridge Park Toilets Community Garden 5

6 Borough Facilities - The Borough owns 90 major buildings totaling 3,230,161 sq ft (UAF = 2,231,901 sf) - 2,479,809 sq ft is school buildings - 698,321 sq ft is general borough buildings - 52,031 sq ft of fire stations - The Borough has over 135 other facilities including parks, ballfields, cabins, playgrounds, and Chena Lakes & Tanana Lakes recreational areas 10

7 Square Footage by Facility Type TOTAL: 3,230,161 sf FIRE STATIONS 52,031 1% BOROUGH 698,321 22% SCHOOL DISTRICT 2,479,809 77% SCHOOL DISTRICT BOROUGH FIRE STATIONS 11

8 Pumpkin Pie! Happy Thanksgiving! 12

9 Square Footage Square Foot by Building Age 1,015, , , , , , , ,554 0 to to to to to to to to to 90 Building Age School Borough Fire Station 13

10 $50,000,000 Repair & Maintenance Actual vs Required Funding $45,000,000 $40,000,000 $35,000,000 $30,000,000 $25,000,000 $20,000,000 $15,000,000 $10,000,000 $5,000,000 $0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 Annual Funding Funding Required 14

11 Repair & Maintenance Actual vs Required Funding - $278M funded over the last ten years - Funded at 69% of industry standard, $122M deferred - Current capital funding level should be $43M per year 15

12 $80,000,000 Total Capital Funding Annual Capital Funding vs. Capital Funding Need $70,000,000 $60,000,000 $50,000,000 Funding Need $40,000,000 $30,000,000 $20,000,000 $10,000,000 $0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 16

13 Deferred Capital Maintenance & Building Replacement Funding - $275M funded over the last ten years - Funded at 51% of industry standard, $267M deferred - Current capital funding level should be $58M per year 17

14 10 Year Deferred Maintenance - Annual maintenance: $122M - Capital improvements: $267M - Total: $389M 18

15 Deferred Capital & Maintenance $450,000, Year Cumulative Maintenance and Capital Deferred ($398,632,603) $400,000,000 $350,000,000 $300,000,000 $250,000,000 $200,000,000 $150,000,000 $100,000,000 $50,000,000 $0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 19

16 Westcott Pool Swimming Pools Hamme Pool Mary Siah Recreation Center 20

17 21

18 $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 $5,000 $0 State Funding to FNSB ($000s) Total Average FNSB

19 $200,000 $180,000 $160,000 $140,000 $120,000 $100,000 $80,000 $60,000 $40,000 $20,000 $0 State Funding to FNSB ($000s) Total Average FNSB Community Univ of AK

20 State Municipal Revenue Sharing Trends FNSB Revenue Sharing 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 App Bud Also consider: Road Service Area funding, Student Transportation 24

21 FNSB Mill Rates 25

22 Combining Deferred Maintenance with Building Age - Known building deferred maintenance costs in the $100 sm - Infrastructure deferred capital maintenance costs likely in the $100 sm - Replacement of up to 2 million sq ft of Borough facilities due to age / condition - Need for over $1B in funding over the next 20 years (~ $50M/year) 26

23 State Funding Source Major Unknowns Annual to FNSB/FNSBSD School Foundation Funding (FY18 Budget) $115,209,800 School Bond Debt Reimb. (FY18 Budget) $11,964,748 PERS (FNSB & FNSBSD FY16 Actual) $2,352,431 TRS (FNSBSD FY16 Actual) $14,885,984 Pupil transportation (FY18 Budget) $12,160,764 Human services matching grants (FY18 Budget) $276,227 Transit matching grants (buses, routes, and operating assistance) (FY17 Actual FY18 Award) $242,344 Total: $157,092,298 27

24 Facts - The Borough s buildings are aging - The Borough is behind on major maintenance. - The Borough is behind on capital investment - State funding has reduced dramatically - The old business model is broken 28

25 Hard Choices (Long Term) - Combination of actions: - Begin closing facilities, cutting programs - Additional local revenue - Bonding - State assistance - Do nothing, wait this out? 29

26 Public Feedback: Economic Perceptions (Nov 1 Town Hall Meetings)

27 Public Feedback: Quality of Life Perceptions (Nov 1 Town Hall Meetings)

28 Public Feedback: Quality of Life Perceptions (Nov 1 Town Hall Meetings)

29 Public Feedback: Stewardship of Resources (Nov 1 Town Hall Meetings)

30 Public Feedback: Attitudes About Course (Nov 1 Town Hall Meetings) Before After

31 Public Feedback: Attitudes About Course (Nov 1 Town Hall Meetings)

32 Public Feedback (Nov 1 Town Hall Meetings)

33 Chena Lakes early summer morning THANK YOU! QUESTIONS? 37