Craig City Budget is Too High! Options to Reduce the Budget in a Tough Economic Climate

[An Open Letter to the Craig City Council by Andy Deering submitted December 2016* (Numbers updated to reflect the 2018 Budget]

Dear City of Craig Council member,

After going through the budget and speaking with city department heads I’ve come up with some cost saving options. Although I found other areas where I think costs could be trimmed, these four were most apparent.

1. Pool: Close pool during summer months. Cost saving $125K to $175K annually.

2. Police: Reduce police patrol officers from 5 to 4. Annual cost savings $80K to $100K.

3. Recreation: Phase out the recreation position. Use volunteers. Annual savings $82K

4. Credit card payments: Pass on to customers if they choose to use card. Annual savings $24K
This comes to a potential annual savings of between $303K and $373K if all four options are pursued.

Here are considerations for each option:

1. Pool: 

 The pool annual budget is $498,091 of which $136K is bond payment (and isn’t affected by a closure.) My estimate of savings takes into account other expenses, such as insurance, which would also unlikely be affected. Closing the pool during summer months makes sense because it’s used less then and freezing weather for shut-down isn’t a consideration. The pool is currently drained annually anyway. And last but not least, swimming lessons for children can be accomplished in winter months.

2. Police: 

The annual budget is $899K. Although considered an essential service, the Craig police force has one of the highest - if not the highest - number of patrol officers per capita in the State of Alaska as well as the nation (I have been unable to find a municipality within the State with an equal or higher number.) Couple that with State Trooper presence (5 additional officers) and Forest Service (1 officer) – all of whom can and will assist in major emergencies – a reduction seems an obvious choice during budget shortfalls. High turnover rates exist within the force, therefore simply not re-hiring after someone moves on seems like a good option.

Note: There are currently 5 trained patrol officers and 6 dispatch officers. The dispatch officers are in charge of dispatch, jail, and DMV – all of which bring in significant money through contracts with the state (DMV and Jail), the troopers (dispatch), the forest service (dispatch) and Klawock city (dispatch). Therefore I did not consider a reduction in dispatch staffing.

City of Craig Police/Patrol Comparative Study

Town / City	Pop. (2010 Census)	# of police / patrol officers (incls chief; excludes dispatch)1	officers / residents	Square miles	Officers / sq mile of jurisdiction
Ketchikan	13,477	232	1 / 586	6,654	1 / 289
Sitka	8,881	18	1 / 493	4,811	1 / 267
Homer	5,003	11	1 / 454	22.4	1 / 2.03
Wrangell	2,369	5	1 / 473	70	1 /  14
Dillingham	2,329	7	1 / 332	36.3	1 / 5.18
Cordova	2,316	6	1 /386	75.6	1 / 12.6
Houston	1,912	No Local Police	0	23.5	n/a
Craig	1,201	5	1 / 240	9.4	1 / 1.8
Skagway	1,000 – 2,500* *(pop. from Skagway Treasurer – summer to winter population)	4	1 / 250 1 / 625*	464	1 /116
Sandpoint	976	3	1 / 325	28.9	1 / 9.6
Delta Junction	958	No Local Police	0	17.3	n/a
North Pole	2,117* Serves 35,000* surrounding (2 military bases & large residential pop)	14	1 / 151* w/ 35,000* population: 1 / 2,500	n/a	n/a

If Craig reduces one (1) officer:

Craig

1,201

4

1 / 300

9.4

1 / 2.4

¹ # of police received from telephone conversations with local municipalities.

² Ketchikan # of police from Ketchikan website: http://www.ktn-ak.us/police

3. Recreation: 

The recreation position has an annual budget of $99,849. This is a non-essential service and in times of fiscal difficulties (arguably likely for the foreseeable future) it makes sense to phase out the position. Many of the activities currently supported by the position can be done voluntarily by interested Craig residents. Facilities such as the youth center and POWER can continue to be supported by city funds, and were not part of my cost reduction calculations. Again, in terms of how best to phase out the position, either not re-hiring the position after retirement or offering early retirement seem like good options.

4. Credit card fees. 

Craig currently pays about $24,000 annually in credit card fees (that’s the percentage charged by credit card companies for using their systems). This money could be saved by passing on the extra cost to customers if they choose to use a credit card for payment of billings. People would still have the option to pay by check or other means at no extra cost. It appears that this is easily do-able by the treasurer.

I’ll continue to look over the budget for other potential areas to cut costs. In my opinion, no additional taxes, or higher tax rates should even be considered until all areas of the budget are scrutinized for possible savings and efficiency. Non-essential services need to be seriously scrutinized for the long term.

I like to look at the situation as two balloons. One balloon represents the overall city government and the other represents the local economy. Because the city receives its revenue mainly as a PERCENTAGE of the local economy, when the local economy grows – the city government grows with it. But when the local economy balloon deflates (for whatever reason, i.e. Silver Bay closure, reduction in sales tax receipts etc.) then the city balloon MUST DEFLATE PROPORTIONALLY.
If tax rates are increased, it strains an already strained local economy. Then, even if the local economy recovers later, the city government remains disproportionately large – never to return to its original proportion.

Have you ever seen sales or property tax percentage rates DECLINE?

I wasn’t aware that the public could attend the budget committee meeting. If I’d known, I would’ve made a point to attend, which I’ll do in the future.

If any council member would like to meet to discuss any of these ideas, I’d be happy to.
Sincerely,

Andy Deering


*Since this letter was submitted to the Craig City Council, no. 4 was implemented - passing on credit card costs to users.

Of Interest, the 2007 Craig Budget Vs 2018 Craig Budget:

Read More: City of Craig New Fees and Rates + the 2018 Operating Budget

Read More: Sales Tax Increase or Property Tax for Klawock Residents? You Decide! No Options for Budget Cuts However...

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