The City of Dillingham's budget is on track to finish the fiscal year in the black. With two excise taxes on the docket and more financial planning ahead, KDLG's Izzy Ross caught up with City Manager Robert Mawson.
This interview has been lightly edited for clarity.
Izzy Ross: What is the situation with the City of Dillingham’s budget right now? Where does it stand?
Robert Mawson: Last year's adopted budget was a little bit upside down — there were more expenditures budgeted than anticipated revenues. But last year, there were a number of expenditures that needed to be recognized on the books, because they had been coming up this year. So right now, if you look at our actual revenues to expenditures at the end of March, I think we were about $1.8 million in the black. We had received more funding than we had spent. So although the budget was adopted in the red, our actual operating conditions are in the black because we don't spend a dollar that we don't have.
There are a few items that take place towards the end of the year that are usually a big impact. We have bond payments and things like that that happen periodically. But by and large, I think we're sitting pretty well to finish this fiscal year in the black. And we are working pretty hard right now to see what we can do to prepare for next year. There are some investments we need to make — I think the community is aware of a lot of those.
Ross: What are a few of the investments that the City of Dillingham is going to make in the next year?
Mawson: We are currently working with our lobbyists — the city hired Chris Hladick — he and I are working together to chase funding at the federal and state level. We’re looking at grants, we're working with Senator Murkowski’s office, we're working with the local legislature. We're trying to see what we can do to fund projects that have really been on the books for years, such as harbor projects. We'd like to get a new float system down there, we'd like to improve the property around the harbor so that we can make it more suitable for business investment or other activities related to fishing. We have a number of projects that deal with erosion along the shoreline, we have issues with our wastewater lagoon, we have a lot of road concerns, different things that we are trying to go after and see what we can fund. We need heavy equipment, we need facility improvements.
We may be spending money for design, grants, those types of things so that we can get these projects in the queue and hopefully bring some of that funding back.
Ross: I'd like to hear how you're thinking about that strategy. And whether some of the taxes that are at that have been discussed in recent meetings — the marijuana excise tax that was just passed, and then also the fish tax which is on the table — how those fit into that strategy.
Mawson: You can only spend what you make. And you can do everything you can to cut your expenses, but sometimes expenses are really kind of out of your control. Our expenditures for fuel, for parts, for shipping — all of those things have increased over the years at a higher rate than our revenues.
We need to really improve the ability we have to collect on our current revenue system. So we have taxes in place right now that rely on collection activities. If we are not able to accomplish all the activities we need to to collect that tax, we're not getting all of the revenue we could receive on that end. So we need to maximize our revenues. And we're approaching that by looking at our operating procedures, looking at our manpower, our capacity to accomplish those things.
We can look at fee for services. The city runs several businesses, if you will: The landfill, the water system, the wastewater system. Those are enterprises. Technically, an enterprise is set up to be self-sufficient — they use user fees to bring in enough money to cover their costs and set aside a little bit for replacement of equipment and so forth. The city has made a conscious decision in the past to subsidize those enterprises as necessary to keep them running, using tax money that can be used in that fashion. But again, that can only be kept up as long as you have the capacity to do that. So we will be looking at user fees in our enterprises, not necessarily to make them 100% self-sufficient, but just to see if we're doing it fairly, and if we are able to cover the majority of our costs.
We're going after grant money — a lot of these projects we have are millions of dollars. So we have to look at those big-ticket items in that fashion.
Then lastly, you know, there's some real needs we have here for equipment, for facilities, for staff salaries, things like that, that need to be adjusted. So we'll be looking at some additional revenues. And the two that have landed on a table are the marijuana excise tax, which the council passed at the last council meeting. It's hard to gauge what that would bring into the city at this point, because it's hard to know what those numbers are. But there's been some estimate that that might bring in another $80,000 to the city in taxes. And that's not going to accomplish a large project at the harbor. But that will help maybe set aside some of the costs at the landfill or the water department.
And then the fish tax. I'm not an expert on fish tax, but as I understand, there are a lot of communities in Alaska that have fish tax and Dillingham is not one of them. There have been some estimates that fish tax could bring the community several hundred thousand dollars in revenue. If that's the case, well, that might accomplish a little bit more than the marijuana excise tax.
But there are a number of issues that we need to explore with that. [Processors are] the target of the fish tax. It's a tax on the fish brought into the processors in Dillingham. It's not on the fish caught out in the water, or where they're caught. It's not a sales tax. It's an excise tax on the fish that are brought in to the processors. So we're in conversations with some of the processors. We want to make sure that this is approached more as a partnership.
Then we want to use that funding to make investments into the community. Perhaps down at the harbor, perhaps in housing, other things that might support this community and the processors as well. But there are a number of directions that we could go with that. Looking at adjusting the amount of the excise tax, how it's applied, where it's applied — all those questions that we need to discuss a little bit more and vet out. The council referred that item back to the finance and budget committee, and we've been starting those conversations, and we'll be doing a little more research on the real impact of that going forward.
Ross: A big part of the debate when the city considered a raw fish tax several years ago when it moved to annex the district was that other communities would necessarily benefit from a fish tax in Dillingham. So it's an interesting dynamic, thinking about this excise tax on processors.
Mawson: Yeah, it is. And I think those are all things that need to be explored. Dillingham understands that we're kind of a regional hub, and we do have responsibility not just for the people here in Dillingham, but for the people in the region. And I think that's also part of that expanded conversation we need to have — where's this money gonna go? Because that's not necessarily what has been talked about. We need to make some sort of a commitment as to how we can assist the region. And it's hard to assist the region when you don't have the funding to do that.
So perhaps a portion of this funding can be used to do things that are obviously beneficial to the region, rather than just beneficial to the community. And I think there's a real need for us to think more regional, to look at partnerships, to see what we can do to maybe leverage that funding to do even larger things, if we can partner with federal agencies, state agencies, grant funds, other community organizations and say, 'This is something that we can use to enhance what we have here.'
The big difference between an excise tax and sales tax and sales tax has to go to the voters, and the voters approve the sales tax. If you ever need to make an adjustment, you have to go back to the voters. In an excise tax, the council can actually adopt that. And if you make adjustments down the road, because you see things aren't working quite the way you'd like, the council can do that by council action. So you can react a lot quicker to things that need to be done. And at this point in time council needs to be able to consider every aspect of this and make a decision that they feel is the best one for the community and the region.
We're not quite there yet. We're working on it. And I welcome whatever input anybody might have to that and invite any conversation that they'd like to have with me. I'm available.
Ross: Thank you so much for sitting down and I hope we can continue this discussion in the future.
Mawson: Sure, anytime. Thank you.
Contact the author at izzy@kdlg.org or 907-842-2200.
