Mayor Introduces Tight Budget, Defends Mary Siah Closure, Infrastructure-maintenance Plan

Apr 6, 2018

Fairbanks North Star Borough Mayor Karl Kassel on Thursday unveiled his recommended budget for the next fiscal year. He told Assembly members during a Finance Committee meeting that he’s tried to hold operating expenses to last year’s level and to keep property taxes just under the tax-revenue cap. And he says the budget also includes funding to begin catching up on a long list of deferred maintenance around the borough.


The mayor says the budget he and his staff have put together anticipates both minimal funding from the state and a growing need to catch up on years of deferred maintenance. And to accommodate those and other fiscal challenges, he proposes the spread the pain around as equally and fairly as possible.

In an ordinance he introduced Thursday, borough Mayor Karl Kassel proposes to demolish the Mary Siah Recreation Center and the old Adler School building in Moose Creek. The ordinance would appropriate $2.7 million for those projects and to begin repairs on three other borough structures.
Credit KUAC file photo

“This budget incorporates a balanced approach to solving our fiscal constraints,” he said. “There are a number of things in it that are not popular. And it’s going to generate a number of negative comments from the public.”

Kassel’s recommended budget anticipates revenues of just over $160 million in the coming fiscal year. That’s about $5 million, or 3.3 percent, less than last year’s revised budget. So he says money will be tight. And that’s why he’s proposing to reduce the local contribution to the school district, trim services and increase fees, while hiking the property tax mill rate.

“There is a point-six-two (0.62) mill rate increase incorporated in this, to the areawide mill rate,” he said.

Kassel acknowledges that’ll generate some of those negative comments, But he suggested it’s not so bad, when compared to the long-term average of what the borough has exacted from its property owners over the past couple of decades.

Mary Siah patrons were surprised and upset when this sign was posted on the front door of the popular facility late last month.
Credit Tim Ellis/KUAC

“The mill rate, with that increase, is still below the average mill rate that we’ve had for the last 23 years,” he said, adding, “Not by much – by point-oh-two (0.02).”

But the part of the mayor’s budget that’s generated the most heat so far relate to his proposed 10-year plan to begin catch up on years of deferred maintenance on borough facilities. He says the borough should be investing at least $50 million dollars a year to maintain its billion-dollar’s worth of infrastructure. But he concedes this year’s budget proposes just enough to begin chipping away at that backlog.

“We’ve allocated $5 million and change this year,” he said.

Kassel also is proposes to reduce the backlog by demolishing some of the borough’s most costly-to-maintain structures. He plans to kick start that part of the plan with an ordinance that he’ll formally introduce to the Assembly next week. The measure would appropriate more than 2-point-seven million dollars from this year’s budget to work on three structures and demolish two others, including the Mary Siah Recreation Center.

“The cost of operating this facility, with the amount of maintenance that it needs both right away and in long term, does not justify trying to do that,” he said.

The mayor proposes to knock down Mary Siah this year, and request voters’ approval of a ballot measure this fall to issue bonds to finance construction of an aquatic center. The facility, estimated to cost 35 million dollars, would replace Mary Siah and Hamme Pool, which also will need to be demolished within a few years.

Borough Mayor Karl Kassel, left, and Assemblyman Lance Roberts.
Credit KUAC file photos

“When you look at the next 10 years of even six years,” he said, “it’s less money to build a new aquatic center than to replace those two pools or even maintaining those two pools for that period of time.”

That part of the Kassel’s proposal drew numerous questions from the eight Assembly members at the meeting. Like: can’t the building be repaired? Answer: perhaps, but at great cost and no guarantee how much its lifespan would be extended. Or, could the building be given to a local nonprofit? Answer: maybe, but the cost of repairs, maintenance and operation make it likely the effort would fail, and the borough may then have to deal with the old structure.

More questions are likely to arise when the controversial ordinance comes before the Assembly next Thursday. And when Lance Roberts introduces a substitute to redirect the $2.7 million Kassel’s measure would appropriate and use it instead for repairing Mary Siah.

Kassel’s budget is expected to be formally introduced to the Assembly later this month.