News from Patrick Flynn

The Assembly covered a lot of ground at today’s work sessions reviewing encouraging news about Anchorage United for Youth‘s successful efforts to better coordinate programs aimed at helping young people succeed, a new Bike Plan aimed at improving non-motorized transit and more information on municipal finances.  Each of these items are important and the bike plan may get a little media attention but you can expect the focus to be on financial issues.  The question is what will actually get reported.  There were three finance-related aspects of note:

First, in recent years bond proposals before voters have authorized debt limits for specific projects with some “flexible” language.  Here’s an example from the Clark Middle School ballot language:

“The general obligation bond proceeds will be used to pay costs of demolition, planning, designing, acquiring property for, site preparation, constructing, acquiring, renovating, installing and equipping educational capital improvement projects, but not limited to the project described above” (emphasis added).

The latter clause is the key.  It essentially says that if the project is completed at a lower-than-anticipated cost then those remaining capital dollars may be spent on other capital projects without further voter approval.  This discussion was before us because we’ll consider whether to approve both MOA and ASD bond sales at our next meeting and both propose use of voter-approved debt authority on projects that weren’t on the ballot.  It’s an interesting question of whether using that remaining authority, while legal, is appropriate.  Don’t expect a unanimous answer on either vote.

Secondly we covered debt finance, referred to as bond “refunding.”  While $12.5 million of the proposed refunding reflected our budget discussions (regular readers will recall my misgivings but ultimate approval of this plan), another $11.2 million is new to the discussion.  For the $11.2 million portion there are actually interest rate reductions, from the 4.5% – 5% range to the 3% – 4% range but, instead of taking those savings on a consistent annual basis (much as you would if you refinanced your home), the administration proposes taking the bulk of the savings in 2010 and 2011.  Because of the lower interest rate future years will still see some savings, just not as much as would be achieved otherwise.  In both cases the term (total years to pay the debt) does not change, which I consider to be a good thing.  Having agreed to the former debt restructuring, I’m not sure how I feel about the latter.  I’m happy to seek the better rate, but unsure if front-loading the savings is a good idea.

Finally we discussed a lack of funds in the Anchorage Building Safety Fund (known as 181 in municipal vernacular) necessary to pay for continued implementation of the Hansen software system.  Aside from some accounting allocation mistakes, the issue the administration wanted to air dealt with funds that were “disencumbered” (freed from allocation to the capital project) in 2009 with the expectation that permit receipts would be sufficient to pay the bill.  Because 2009 turned out to be a very slow construction year the permit dollars didn’t materialize and the 181 fund couldn’t pay the bill so an administration proposal shifts dollars to correct the matter.  Expect more Begich administration criticism to follow.

On an unrelated subject, today three of my colleagues introduced a resolution with new guidelines for the administration when engaged collective bargaining with unions representing municipal employees.  I haven’t had a chance to analyze it in depth but did note three items of interest:

• This resolution would replace one approved in 2007, which was sponsored by then-Chair Dan Sullivan and then-Vice-chair Debbie Ossiander.
• The new resolution indicates it was “reviewed” rather than “prepared” by Assembly Counsel, meaning someone else wrote it.  I don’t know that someone was, but the mayor’s secretary delivered copies of the resolution during a break in our work sessions.
• It appears a contract negotiated by the Sullivan administration which is slated for action on Tuesday does not conform to the conditions within the resolution.

All in all, we have a long meeting with plenty of challenging topics to address next week.  Don’t be surprised if our recent streak of completing the agenda prior to the scheduled 11 p.m. adjournment comes to an end.

Regards,

Patrick