Assembly committee hears OMB: municipality about 26% spent through March, CAO non-labor shows outlier

The Anchorage Assembly Budget and Finance Committee met May 15 and received the Office of Management and Budget's budget-to-actuals report through March 31, 2025, which shows the municipality about 26% spent so far this fiscal year.

"What we have in front of us is the 2025 budget to actuals report through March 31," the OMB director said while reviewing the general government pages that separate labor and non-labor activity. The report shows most departments tracking near expected levels; the chief administrative office appears as an outlier on the non-labor line at about 42 percent because venues contracts for the performing arts center and the museum are paid up front in January.

The presentation included overtime and travel worksheets and the alcohol- and marijuana-tax pages. "Overall, the municipality was 26% spent," the OMB director said, noting that several non-labor accounts appear high when contracts are paid as annual lump sums.

Committee members asked about underspending in maintenance and operations and whether a mild winter reduced snow-and-ice expenses. Lance Wilbur, former OMB director and current community and economic development director, told the committee that members' intuitions were correct: a light snow season reduced anticipated winter costs. The OMB director added that parks budgets can show seasonal variance and that vacancies can also lower labor spending.

Members also questioned apparent high non-labor spending in public transportation. OMB explained that the reported percentage includes encumbrances (funds reserved for identified future expenses) as well as cash outlays. In public transit's case an $11.2 million non-labor budget shows roughly $1.1 million spent and about $6.0 million encumbered; the encumbrances inflate the percentage shown in the report.

On dedicated taxes, OMB said more alcohol-tax funds are now either out the door or encumbered for specific community providers, an improvement after prior years when the funds lagged in distribution. The committee also reviewed the supplemental column used to capture budget adjustments made outside the November and April budget cycles; OMB noted the April revised budget becomes the standing budget and supplementals arise when departments transfer or receive funds midyear.

Members asked about legal settlements and the tax cap. The OMB director said smaller settlements are sometimes absorbed within department budgets, while larger ones may be appropriated by the assembly or be collected outside the tax cap in a subsequent year; the director said staff would ask legal counsel if a specific legal time limit affects recollection timing.

The first-quarter budget revisions have been loaded and departments are operating under the revised budgets. OMB noted that earlier assembly approval of the bond package gave departments additional lead time for the construction season.

No formal motions or roll-call votes were taken at the committee meeting.

The committee plans additional education sessions and follow-up requests: members asked OMB to provide details on public-transit encumbrances and to follow up with legal staff about settlement timing and tax-cap treatment.