Anchorage’s local government has a cash flow problem

Chief Fiscal Officer Alden Thern extracurricular Anchorage City Hall connected Tuesday, July 30, 2024. Thern says arsenic nan city’s elected officials trade early budgets, they will person to equilibrium a request to rebuild nan city’s rate reserves against nan request to present value municipal services.(Matt Faubion/Alaska Public Media)

Anchorage’s section authorities has a rate travel problem, limiting its expertise to woody pinch unexpected expenses aliases to walk imaginable windfalls.

When nan metropolis caught up connected immoderate of its overdue financial reporting requirements last month, it included a reckoning of nan city’s spendable money balance, that is, nan money nan metropolis has connected manus that isn’t different committed.

Anchorage Chief Fiscal Officer Alden Thern boiled it down for an Assembly committee.

“The mobility I ever get asked: How overmuch money equilibrium do we person truthful we tin spend?” he said. “We are negative. So, location is nary money equilibrium to spend, and it’s not going to beryllium anyplace successful nan near-term future, until we are capable to reimburse nan money equilibrium for aggregate areas.”

This isn’t a existent deficit. The city’s astir recent, audited financial statements opportunity nan metropolis had $52.8 cardinal connected manus astatine nan extremity of 2022. But it was expected to person millions of dollars much arsenic reserves nether an Assembly policy. 

The debased reserves played a domiciled successful a city’s caller bond standing downgrade, which intends taxpayers will salary somewhat much successful liking connected $147 cardinal nan metropolis precocious borrowed.

Those reserves are spendable successful emergencies. But if non-emergency, one-off backing requests travel up, nan metropolis can’t salary for them from nan money balance. 

The constraint is different consequence of metropolis bookkeepers’ delayed, but inevitable corrections to tangled and inconsistent financial recordkeeping that cropped up amid extreme unit turnover. Untimely financial reporting obscured and compounded nan rate travel situation. 

A finance charismatic from nan past management who worked connected nan overdue financial study called immoderate of nan looming issues accounting “time bombs.” Strange accounting decisions going backmost to nan Berkowitz management for a awesome municipal package upgrade, delayed reimbursements from nan national authorities for emergency spending related to the 2018 earthquake and COVID-19 pandemic, and caller accounting standards person each contributed.

Chief Administrative Officer Bill Falsey said nan rate travel rumor is simply a problem, though location are different ways to salary for unbudgeted, one-time expenses. 

“The expertise to usage money balance, which does not moreover beryllium each year, is simply a azygous digit, fractional percent of nan wide municipal budget,” he said. “It is not a point that is really captious to nan municipality’s yearly budgeting process aliases operations.” 

However, arsenic Anchorage officials statesman putting together nan city’s yearly fund for nan 2025 almanac year, unit to rebuild nan money equilibrium reserves will compete pinch much tangible priorities, for illustration pushes for salary raises for metropolis workers aliases to amended snowfall removal. 

Some alleviation will travel pinch time, simply arsenic nan bookkeeping catches up to national reimbursements for emergency expenses that flowed to nan metropolis successful 2023. But other, idiosyncratic deficits – specifically, successful nan costs for nan IT Department, Anchorage Building Safety Service Area, and workers compensation – will proceed to count against nan city’s wide money balance, apt for years, without work cuts aliases caller taxes.