Ona Prowse, director of the Office of Management and Budget, told the Anchorage Assembly on April 11 that the municipality's proposed 2025 first-quarter revisions would increase direct costs by about $8.5 million and leave the revised municipal budget roughly $480,000 under the city's tax-cap calculation.

The proposed revised budget increases the total municipal budget from $648.3 million (approved in November) to $656.8 million and adds 13 positions, largely to operate the Mountain View Community Center after the Boys & Girls Club ceased managing the facility. Prowse said the 2025 revised package assumes continued revenue recovery tied to judgments and emergency-ordinance closeouts and reflects several technical and programmatic updates across general government, utilities and enterprise funds.

Why it matters: the first-quarter revision adjusts spending and revenue projections after the 2025 budget was adopted. The changes affect service-area levies, utility capital planning, a new voter-approved levy for heavy-equipment fleet needs (ARD S A), and a string of one-time recoveries tied to settlements and emergency responses. Assembly members were briefed on funding sources, fund balances for special taxes, and the schedule for amendment submissions ahead of the Assembly's April 22 meeting, when the revision will be considered.

The most consequential line items

- Direct-cost increase: OMB summarized a net $8.5 million increase in direct costs for 2025 driven by a mix of revenue true-ups, expense adjustments and service-area requests. The revised total budget is $656.8 million, compared with $648.3 million in the approved budget.

- Tax cap and recoveries: Prowse said the 2025 revised package is about $480,000 under the municipal tax cap after factoring in one-time recoveries for COVID-19 response and the Highland Avalanche, judgments and settlements. She called out roughly $4.6 million in one-time tax-cap recoveries tied to judgments, settlements and emergency-ordinance closeouts.

- Voter-approved levy and fleet funding: the newly approved ARDSA heavy-equipment levy (approximately $3.5 million) is included in the tax-cap calculation. Chief administrative officer Mr. Falsy told the Assembly the administration's initial intent is to treat the levy as additive to existing fleet funding while it prioritizes spending; he said that does not preclude evaluating budget shifts for other fleet needs, including police fleet requirements that were not covered by a separate, unsuccessful levy.

- Utilities and waste-to-energy planning: the Anchorage Water and Wastewater Utility (AWU) revisions include a $500,000 capital increase on the water side and a $3 million capital increase on the wastewater side. Solid Waste Services requested a $9 million capital increase; about $5 million of that is for preliminary planning and project work on a proposed waste-to-energy initiative. Prowse and staff emphasized that the funding approvals in the budget are for planning and that additional contract approvals will return to the Assembly before large sums are spent.

- Mountain View Community Center: the municipality will assume management of the Mountain View Community Center following the Boys & Girls Club exit. OMB identified a roughly $189,000 net increase in Parks & Recreation operations and staff to run the center (including absorbing remaining appropriations previously granted to the Boys & Girls Club). Staff cautioned the 2026 cost could differ pending operational analysis.

- Anchorage Safety Patrol and mobile crisis: the revised budget adds roughly $2.3 million to carry forward the full, existing Anchorage Safety Patrol contract after a prior partial funding arrangement. OMB said that the municipality is discussing long-term funding options, including possible Medicaid billing offsets, but made no commitment to a specific reimbursement path.

- Merrill Field and Port of Alaska: OMB removed a previously budgeted $100,000 dividend from Merrill Field at the FAA's direction. Port of Alaska debt-service obligations added about $5.5 million to that enterprise's cost projection, a change OMB attributes to plan-of-finance adjustments.

- Tax anticipation notes (TANs) and investment earnings: the packet reflects a decision not to issue TANs this year. That choice reduces projected TAN investment earnings by about $4.4 million and has offsetting direct-cost changes that largely net to neutral, according to OMB.

Revenues, fund balances and special taxes

- Alcohol and marijuana taxes: OMB said marijuana-tax (ACE) fund balance exists (roughly $2 million) because the fund is in its first operational year and will be used for projects across 2024 and 2025. OMB reported no available fund balance in the alcohol-tax fund and warned members that prior practice of relying on alcohol-tax fund balance for amendments is not available this year.

- Workers' compensation and fund reserves: OMB noted ongoing deficits in the workers' compensation and building-safety service-area funds and said the budget contains recalibrated department charges to address workers' comp recovery.

Process, timeline and next steps

Prowse and staff asked assembly members to submit budget amendments by end-of-business on the Wednesday before the April 22 meeting so OMB can collate and advise whether the package exceeds the available capacity under the tax cap. The assembly co-chairs reiterated practical guidance: amendments should indicate whether they are one-time or recurring, specify funding sources, and expect to be explained at the April 22 meeting. Prowse said audited financial statements for 2023 and 2024 remain in process; once the audit work is complete, OMB will refine fund-balance calculations and provide updated numbers.

Direct quotes from presenters

- "The 2025 revised budget proposal is $480,000 under the tax cap," Ona Prowse, director, Office of Management and Budget.

- "At first blush, it's an additive revenue source," Chief Administrative Officer Mister Falsy on the ARDSA heavy-equipment levy and how it will be used relative to existing fleet funding.

- "Run hot means over budget," Prowse, defining assembly staff parlance used in the presentation.

What the Assembly asked for or directed

Members pressed for more detail on: the use and availability of fund balances for alcohol and marijuana taxes; the administration's plans for contracting vs. in-house work in the Controller's office; whether AWU and Solid Waste contributions to waste-to-energy should be tracked in a dedicated fund or joint CIP; and more transparency on intergovernmental charges (IGCs). OMB and administration staff committed to follow up and to provide more documentation and schedule-specific information ahead of April 22.

Ending

OMB presented the first-quarter revision as a technical and programmatic update to an already approved 2025 budget. The Assembly scheduled April 22 for formal consideration, and OMB asked members to submit amendments by the posted deadline so staff can assess tax-cap capacity and prepare a consolidated amendment packet.