Fairbanks North Star Borough – Mayor’s Office

State Pressures on Local Municipal Finance

Jim Williams, Chief of Staff

November 2, 2017

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Fairbanks North Star Borough – Mayor’s Office 2

Mayor’s Office Mission

- Respecting and protecting the best interests of the community, balanced with individual freedoms

- Provide principled community leadership

- Provide community-driven, cost effective and efficient government services

Fairbanks North Star Borough – Mayor’s Office 3

North Pole Branch Library

Fairbanks North Star Borough – Mayor’s Office 4

Polaris Sculpture Tanana Lakes

Kiwanis Field

Transit Bus Stop

Fairbanks North Star Borough – Mayor’s Office 5

Parks & Park Lighting

Community Garden

Pedestrian Bridge

Park Toilets

Fairbanks North Star Borough – Mayor’s Office

- The Borough owns 90 major buildings totaling 3,230,161 sq ft (UAF = 2,231,901 sf)

- 2,479,809 sq ft is school buildings- 698,321 sq ft is general borough buildings- 52,031 sq ft of fire stations- The Borough has over 135 other facilities

including parks, ballfields, cabins, playgrounds, and Chena Lakes & Tanana Lakes recreational areas

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Borough Facilities

Fairbanks North Star Borough – Mayor’s Office

Square Footage by Facility Type

SCHOOL DISTRICT 2,479,809

77%

BOROUGH698,321

22%

FIRE STATIONS52,031

1%

TOTAL: 3,230,161 sf

SCHOOL DISTRICT BOROUGH FIRE STATIONS11

Fairbanks North Star Borough – Mayor’s Office 12

Pumpkin Pie!Happy Thanksgiving!

Fairbanks North Star Borough – Mayor’s Office

Square Foot by Building Age

149,721

272,614

480,493

646,806

1,015,898

320,854 310,099

0 22,5540

200000

400000

600000

800000

1000000

1200000

0 to 10 11 to 20 21 to 30 31 to 40 41 to 50 51 to 60 61 to 70 71 to 80 81 to 90

Squ

are

Foo

tage

Building Age

School Borough Fire Station

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Fairbanks North Star Borough – Mayor’s Office 14

$0

$5,000,000

$10,000,000

$15,000,000

$20,000,000

$25,000,000

$30,000,000

$35,000,000

$40,000,000

$45,000,000

$50,000,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Annual Funding Funding Required

Repair & Maintenance Actual vs Required Funding

Fairbanks North Star Borough – Mayor’s Office

- $278M funded over the last ten years

- Funded at 69% of industry standard, $122M deferred

- Current capital funding level should be $43M per year

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Repair & Maintenance Actual vs Required Funding

Fairbanks North Star Borough – Mayor’s Office

Total Capital Funding

Funding Need

$0

$10,000,000

$20,000,000

$30,000,000

$40,000,000

$50,000,000

$60,000,000

$70,000,000

$80,000,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

Annual Capital Funding vs. Capital Funding Need

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Fairbanks North Star Borough – Mayor’s Office

- $275M funded over the last ten years

- Funded at 51% of industry standard, $267M deferred

- Current capital funding level should be $58M per year

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Deferred Capital Maintenance & Building Replacement Funding

Fairbanks North Star Borough – Mayor’s Office

- Annual maintenance: $122M

- Capital improvements: $267M

- Total: $389M

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10 Year Deferred Maintenance

Fairbanks North Star Borough – Mayor’s Office

Deferred Capital & Maintenance

$0

$50,000,000

$100,000,000

$150,000,000

$200,000,000

$250,000,000

$300,000,000

$350,000,000

$400,000,000

$450,000,000

FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17

10-Year Cumulative Maintenance and Capital Deferred ($398,632,603)

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Fairbanks North Star Borough – Mayor’s Office 20

Hamme PoolWestcott Pool

Mary Siah Recreation Center

Swimming Pools

Fairbanks North Star Borough – Mayor’s Office 21

Fairbanks North Star Borough – Mayor’s Office

State Funding to FNSB2007 – 2018

($000s)

$0

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

FNSB

Total Average

2007 -2014

Fairbanks North Star Borough – Mayor’s Office

State Funding to FNSB2007 – 2018

($000s)

$0

$20,000

$40,000

$60,000

$80,000

$100,000

$120,000

$140,000

$160,000

$180,000

$200,000

FNSB Community Univ of AK

Total Average

2007 -2014

Fairbanks North Star Borough – Mayor’s Office

State Municipal Revenue Sharing Trends

0

1,000,000

2,000,000

3,000,000

4,000,000

5,000,000

6,000,000

FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 AppBud

FNSB Revenue Sharing

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Also consider: Road Service Area funding, Student Transportation

Fairbanks North Star Borough – Mayor’s Office

FNSB Mill Rates

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Fairbanks North Star Borough – Mayor’s Office

- Known building deferred maintenance costs in the $100’sM

- Infrastructure deferred capital maintenance costs likely in the $100’sM

- Replacement of up to 2 million sq ft of Borough facilities due to age / condition

- Need for over $1B in funding over the next 20 years (~ $50M/year)

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Combining Deferred Maintenance with Building Age

Fairbanks North Star Borough – Mayor’s Office 27

Major Unknowns

State Funding SourceAnnual to FNSB/FNSBSD

School Foundation Funding (FY18 Budget) $115,209,800

School Bond Debt Reimb. (FY18 Budget) $11,964,748

PERS (FNSB & FNSBSD FY16 Actual) $2,352,431

TRS (FNSBSD FY16 Actual) $14,885,984

Pupil transportation (FY18 Budget) $12,160,764

Human services matching grants (FY18 Budget) $276,227

Transit matching grants (buses, routes, and operating assistance) (FY17 Actual – FY18 Award)

$242,344

Total: $157,092,298

Fairbanks North Star Borough – Mayor’s Office

- The Borough’s buildings are aging- The Borough is behind on major

maintenance.- The Borough is behind on capital

investment- State funding has reduced dramatically- The ‘old’ business model is broken

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Facts

Fairbanks North Star Borough – Mayor’s Office

Hard Choices(Long Term)

- Combination of actions:- Begin closing facilities, cutting programs- Additional local revenue- Bonding- State assistance

- Do nothing, wait this out?

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Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Economic Perceptions(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Quality of Life Perceptions(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Quality of Life Perceptions(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Stewardship of Resources(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Attitudes About Course(Nov 1 Town Hall Meetings)

Before

After

Fairbanks North Star Borough – Mayor’s Office

Public Feedback: Attitudes About Course(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

Public Feedback(Nov 1 Town Hall Meetings)

Fairbanks North Star Borough – Mayor’s Office

THANK YOU!

QUESTIONS?37

Chena Lakesearly summer morning