Tough budget passes

Ladies and gentlemen, Palmer has a 2012 budget -- $14,357,622.


But that number comes with a cost, which includes two layoffs and several vacant city positions going unfilled in the coming year. 

Basically, Mayor DeLena Johnson and city manager Doug Griffin told the Post today, the city juggled a couple of complications while still recovering from several years of pricey capital projects and little money in reserve. The city’s general fund is actually down from last year by more than 5 percent, the mayor said. 

The city council emerged just before midnight Tuesday after passing a budget made tricky by at least two factors. 

Number one, a state retirement fund policy could require the city to pay retirement costs even for eliminated employees, Johnson said. That left the city very mindful of eliminating employees and adding positions. 

“We were very careful to not add any kind of permanent additional positions and we didn’t increase our personnel as much,” she said. “We didn’t give step increases.”

Number two, the insurance carrier that covers city employees waited until just a few weeks before the budget was drafted to drop a bomb: health insurance costs are going up by 16 percent next year, according to city manager Doug Griffin. He’d figured on what he thought was a conservative 10 percent increase. The city’s employees are insured through the Alaska Public Utilities Insurance Trust, a fairly small pool of some municipalities and utility companies. Nobody is saying what steps the city will take to remedy the increase -- switch carriers, increase premiums?

But in the meantime, the surprise cost forced the council to take that extra 6 percent out of the rest of the budget. 

The city cut two positions - a grants coordinator and a quality assurance inspector - both related to a run of capital projects in the last few years, officials said. The city also didn’t fill one electrician/maintenance position and left an administrative assistant position at the Palmer Library at 15 hours per week rather than boosting it to full time. The last amendment of the night - there were more than 30 - cut all out-of-state travel, Johnson said. 

One bright spot, according to the mayor, is the fact that the council managed to build a more than two-month reserve into the general fund, despite this tough budget cycle. “We’re being careful and we’re coming back,” Johnson said. “It’ll allow us next year to be able to start to decide what to spend money on instead of looking at it and deciding what we have to cut out.”

-- Zaz Hollander