“This is where you get to learn the city functions – get to take a look at it, look under the hood, ask questions, know all about it. You’ve done a great job,” City of Fairbanks Mayor David Pruhs said.
The final version passed on a 5 to 1 vote, greenlighting about $46.5 million in operating expenditures for the 2025 fiscal year, beginning Jan. 1.
The look under the hood to which Pruhs was referring produces the comprehensive document before the council on Monday that strives to balance the provision of services with the city’s financial condition. The annual process attempts to close perceived operational gaps – for example, adding $91,000 to the police department’s budget for a new administrative assistant who will act as an equipment manager. But the process also highlights the city’s finances, sometimes surfacing differences of opinion among elected officials.
For the Fairbanks City Council, the fire department has often been the epicenter of that disagreement. The 2025 budget adds several new positions to the department, which proponents have said should reduce the department’s overtime expenses that are on track to top $2 million in 2024.
Councilmember Jerry Cleworth, the lone no vote Monday, has opposed those changes and doubled down on his position before the budget passed. He said he thinks the money funding the additional staff would be better used to cover later capital expenses, such as new fire engines.
“If I thought that it would pass I would make a motion to decrease the staffing there and put that money straight into the capital [budget],” he said.
Before adoption of the budget, the council passed a collective bargaining agreement for staff at city dispatch and the police department. That agreement is between the city and the public safety employees association, or PSEA.
If approved by the union, the contract will increase the city’s 2025 expenditures by about $1.2 million, according to a fiscal note. That would shrink the upcoming year’s projected budget reserve down to just under $500,000 dollars, said city finance director Margarita Bell.
“If we include the PSEA contract, then that brings us down $495,496,” she said.
That projected reserve also does not take into account a new contract for the Firefighters’ union, which the city council rejected in November on a narrow 4-3 vote.
Although the city’s unassigned general fund balance – which operates similar to a savings account – is still about $5 million dollars above the $10 million dollar minimum required by code.
At a July finance committee meeting, Bell said the city would be operating in a budget deficit without draws from the city’s permanent fund, according to a four-year projection. This year’s budget includes a $5.9 million-dollar draw from the fund, which was valued at about $142 million at the end of 2023.