Anchorage Assembly Budget and Finance Committee Meeting - July 16, 2026

The Assembly Budget and Finance Committee met on Thursday, July 16, 2026, from 10:00 to 11:05 AM. Chair Anna Brawley called the meeting to order with members present in person and via phone. The committee received updates on the MOA Trust, municipal revenues, and year-to-date budget performance, and held substantive discussion on a draft FY27 Assembly Budget Priorities Resolution.

Budget Advisory Commission (BAC) Report

• BAC Chair Donald Handelin reported that the commission had a productive meeting last week and previewed a presentation on service areas. The BAC is drafting a budget priorities memo, expected for adoption at its August meeting. The August meeting will also include a presentation from the school district on the foundation formula.
• Member Baldwin Day expressed appreciation for the commission's active role.

MOA Trust Update

• Kevin Liu, Investment Director, reported a June return of 0.1% and a year-to-date return of 6.9%, with total trust value over $509 million. The trust outperformed major U.S. indexes despite a late-June sell-off concentrated in technology and semiconductor sectors. The trust maintains a long-term investment strategy with a 2% cash allocation. The inflation rate at end of June was 3.5%, and Liu expressed optimism about meeting the 4% payout target.

Revenue Report

• Municipal Treasurer Glenn Sabriano presented revenue highlights as of July 14, 2026. Key items:
  • Room tax: $8.1 million collected in the first quarter, against a $30 million annual budget. A more balanced, four-season revenue stream is emerging.
  • Tobacco tax: $7.4 million collected ($19 million budget). Revenue has stabilized after a major vendor revised its processes.
  • Rental vehicle tax: About $200,000 below typical year-to-date levels, possibly due to increased cruise traffic vs. longer stays.
  • Building safety: $3.9 million collected ($5.9 million budget), an active indicator of economic activity.
  • Alcohol and marijuana taxes: Appear to have stabilized at lower projected levels ($14.2 million and $5.5 million respectively).
• Member Zach Johnson asked about the tax rate on vape products; Sabriano said a lower rate applies to tobacco-derived products.

Budget-to-Actuals Report

• Director Owner Brouse of the Office of Management and Budget presented the report through June 30, 2026 (49.3% of the fiscal year). Overall municipal spending and encumbrances were at 46%. A few departments are running about 5% hot in non-labor categories, which is typical at mid-year. Overtime spending was a major focus:
  • Finance Department overtime was at 342% of budget, attributed to property appraisal and assessment hearings.
  • Fire and Police overtime budgets are outdated; actual overtime for Fire was nearly $7 million in 2025 vs. a budget of $4.3 million; Police was over $10 million vs. $4.9 million budget. OMB will recalibrate overtime allocations during the FY27 budget process, adjusting for wage increases and operational needs.
  • Maintenance & Operations (MO) had spent 100% of its overtime budget, which was addressed by a prior reappropriation.
• Travel budget year-to-date spent was 36%, with a $585,000 adjusted budget. The Fire Department received a budget transfer for travel funded by external partners.
• Alcohol tax and marijuana tax funds are nearly fully encumbered, mostly due to contractual obligations.

Discussion of FY27 Assembly Budget Priorities Resolution

• The committee reviewed a draft resolution (version labeled Baldwin Day) intended to guide administration priorities during the FY27 budget process. The resolution was described as broad, requesting information rather than specific funding levels.
• Key points of the draft as presented by Member Baldwin Day:
  • Whereas clauses note ongoing fiscal pressures: recapitalization at JBER, the proposed LNG pipeline, natural gas shortages, structural constraints (tax cap, education funding, deferred maintenance, geographic dispersion).
  • Resolved clauses request scenario planning from the administration on trade-offs between funding education and municipal services under the current tax cap, alongside a comprehensive assessment of deferred maintenance (roads, fleet, stormwater, facilities, enterprise assets) and analysis of population, economy, housing, and tax base.
  • Recommendations include setting realistic community expectations, quantifying service gaps, identifying internal budget efficiencies, prioritizing capital projects to avoid catastrophic failures, promoting housing development, and encouraging technology use to improve efficiency.
  • The resolution concludes that the current fiscal situation is unsustainable and commits the Assembly to pursue structural changes.
• Member Jared Gerker introduced an amendment requesting information on changes in FTEs allocated to each department in FY27, and a count of vacant non-recruited positions over the past 12 months with rationale for continuation.
• Member Sydney Scout asked whether the administration could provide a third scenario showing the budget without the tax cap in place. Director Brouse noted that defining such a scenario would require clarification of parameters, and detailed analysis may be difficult to include in the 120-day memo due to staff capacity constraints. Chair Brawley and others emphasized that the request is for a rough compilation to characterize the scope of the problem, not a 500-page report.
• Member Baldwin Day raised the need for broader structural conversations, such as alternatives to bond-funded drainage projects (e.g., a stormwater utility).
• Chair Brawley clarified the timeline: a version of the resolution will be posted for the July 21 Assembly meeting as an addendum, with a substitute version expected. Committee members were invited to submit further suggestions to the clerk.

Key Outcomes

• The committee will forward a revised version of the FY27 Assembly Budget Priorities Resolution to the full Assembly for the July 21 meeting, with an intent to adopt a substitute version.
• OMB will work with the committee to refine requests for information, particularly on deferred maintenance and scenario modeling, ensuring feasibility given staff resources.
• The next regular Budget and Finance Committee meeting is scheduled for August.