By:  Brooks Chandler

TN Contributor

Girdwood's local government had a surplus of nearly $400,000 in its 2023 budget, savings that are a result of lower than expected costs for road maintenance, lower expenses for parks and the fire department's decision to hold off on buying a new fire truck.

Actual expenses for the Girdwood Valley Service Area in 2023 were $388,288 under budget.  

This happy state of Valley financial affairs was reflected in a budget report prepared by Service Area Manager Kyle Kelley.  The report was presented to the Girdwood Board of Supervisors on March 20.   

Kelley identified several causes of the surplus, including lower than expected “intra-governmental charges”, a decision to retain $74,821 the fire department originally budgeted for an initial payment on a new truck, and lower than anticipated payments to the road contractor Western. Intragovernmental charges are what one Anchorage department charges the Girdwood Valley Service Area for work performed that either directly or indirectly benefits the service area.  One example is maintenance work on buildings and equipment done by the Public Works department.  

The fire chief had been concerned her department would run short of operating funds so the capital transfer for the fire truck was not made, Kelley told the Girdwood Board of Supervisors. 

Ordinarily when it turns out the operating costs were on budget the planned transfer to capital would have been made before the end of the year.   In addition, the budgeted initial loan payment of $80,000  anticipated to be paid in 2023 will not be due until the new vehicle is actually delivered in either late 2024 or early 2025.

Accounting staff shortages in the Anchorage Fire Department plus the need for the Anchorage Assembly to officially approve fund transfers prevented the pre-year-end transfer, Kelley said, adding that he anticipates the transfer will be made in 2024. The spread between budgeted and actual expenses for law enforcement was miniscule.  The $807,619 police budget had a surplus of $3,703.14, an excess accounting for less than one-half of one percent of the budget. Mr. Kelley told GBOS the contract with the Whittier Police Department enables precise budgeting.  

The Parks and Recreation budget had a 10 percent surplus of nearly $40,000.  This surplus resulted in part from lower-than-expected intra-governmental charges and from the award of a grant from the Kenai Mountains Turnagain Arm National Heritage Area. The grant offset budgeted costs for work on the Beaver Pond trail.  

Despite  the vast amounts of snowfall in late 2023 the are road maintenance budget also had a 10 per cent surplus of $131,000.  The road budget covers both plowing, grading and capital projects such as culvert replacements.

There will be a change in how capital projects are accomplished in 2024. Instead of working directly with the GVSA road contractor under the terms of a road contract, larger capital projects will be competitively bid Kelley told the board. He said this process is less efficient and whether it is more costly remains to be seen.

The entire $388,288 surplus is available for spending if GBOS makes a specific request to use the funds that is approved by the Anchorage Assembly.  

Kelley said he recommends GBOS keeps $250,000 in “undesignated” funds for unanticipated expenses such as an equipment failure. Any amount above this could be kept in the bank, used for the first payment for the new fire truck, or spent on a capital project, Kelley said

During the March 20 work session GBOS members universally praised the fiscal management of Kelley and Margaret Tyler.  

The full year end report can be accessed at  https://www.muni.org/Departments/operations/streets/Service/GBOS/GVSA%202023%20Year%20in%20Review%20packet.pdf