City and Borough Assembly Regular Meeting - February 11, 2025

The City and Borough of Sitka Assembly held its regular meeting on Tuesday, February 11, 2025, at 6:00 PM in Assembly Chambers. The meeting included a ceremonial service award, special reports on the FY2024 audit and quarterly department updates, public testimony, approval of routine consent items, appointments to boards and commissions, adoption of mid-year supplemental appropriations, first reading of an ordinance to repay a USDA RUS loan, assignment of a tourism commission liaison, and an executive session on litigation matters. All votes were unanimous (7-0) unless noted.

Ceremonial Matters

• Deputy Mayor Timothy Pike presented a service award to Dr. Paul Bahna for over two years of service on the Health Needs and Human Services Commission.

Special Reports

• FY2024 Audit – Joy Merriner (BDO) presented a clean audit with an unmodified opinion on financial statements and a clean opinion on single audits (federal and state). Key highlights included the early adoption of GASB 101 for compensated absences, no findings on internal control (except a noted superuser access in IT, mitigated by compensating controls), and a new USDA rural electrification loan program audited with no findings. The city’s general fund balance is $23.5 million, with $7.8 million unassigned; total net position increased by $9 million in enterprise funds.
• Harbors Quarterly Report – Harbormaster Stan Eliason reported on a rate study by HDR, focusing on dusty insurance requirements and passenger-for-hire fees. A RFP for the fish work float major repairs is forthcoming. A state application for electrical flotation upgrades at Lysons Harbor was scored second place for potential $240,000 funding. Staffing is strong; budget is 48% expended.
• Public & Government Relations Quarterly Report – Director Melissa Wileman highlighted the strategic plan update, quarterly newsletter, and submission of projects for state funding (CDS requests and an appropriations bill including $11.25 million for wastewater disinfection and $5.7 million for a haul-out). The 2024 annual report showed over 24,000 police calls, 1,500 fire calls, 93,000 library visitors, and 500+ youth in parks and rec programs. Legislative priorities will be taken to Juneau and Washington, D.C.

Public Comments & Testimony

• Michael Nurco (first Persons to be Heard) – Commented on the future management of Sitka’s boat yard. He expressed that the RFQ language for a private operator was too narrow, excluding a long-term local business. He urged the Assembly to consider a city-run or locally run boat yard instead of a Kodiak-based company (HIMARC), stating that the community wants local management and that a municipally run model would be self-sustaining given the city already owns the land and travel lift.
• Austin Cranford (second Persons to be Heard) – Asked about an investigation involving the second animal shelter, which the city administrator had hoped to complete by end of January. He claimed the city may know the disposition of cats that were previously listed as unknown, and urged release of the investigation report soon.

Consent Calendar

• Approved minutes of the January 14 and 28 assembly meetings.
• Approved liquor license Package Store Delivery Endorsement applications for Triple C Ventures, Inc. dba Watson Point Liquor and Cascade Convenience Center.

Board, Commission, Committee Appointments

• Appointed Mariana Robertson (Local Emergency Planning Committee, Category 3: Media/Broadcast) and Joshua Badder (Port and Harbors Commission, unexpired term).
• Reappointed Lauren Howard (Gary Paxton Industrial Park Board, At-Large) and JoAnn Huff (Tree and Landscape Committee). All appointments and reappointments were approved 7-0.

Discussion Items

• Unfinished Business: ORD 25-03 (Mid-year Supplemental Appropriations) – Finance Director Melissa Haley provided an overview, noting the ordinance is routine and covers clerical adjustments, capital project reallocations (e.g., fire station alerting system), increased legal costs, higher sales tax projections for schools, and a typo correction (tire cutter to chipper/grinder). The ordinance was approved on second and final reading, 7-0.
• New Business: ORD 25-04 (Electric Fund Repayment of USDA RUS Loan) – Utility Director Ron Vinson and Finance Director Melissa Haley explained that the loan conditions changed, making compliance with reporting requirements (mid-year close, thousands of pages of guidance) infeasible. The city will repay the loan early, with an estimated penalty up to $200,000, using $3 million in unexpected hydroelectric incentives. Assembly members expressed disappointment but supported the move, citing improved alternative funding options and reduced staff burden. The ordinance was approved on first reading, 7-0. A second reading will be required.
• Assembly Liaison Assignment: Tourism Commission – Chris Ystad volunteered as primary liaison, and Scott Saline as alternate. The commission meets the second Thursday of each month at 6:00 PM. Ystad noted potential conflicts with summer fishing commitments; Saline will fill in as needed.

Reports

• Mayor’s Report – Mayor Steven Eisenbeisz recap of the Pacific Northwest Cruise Symposium: Cruise industry is reducing heavy fuel oil use (now 54% use alternative fuels); Alaska is the 5th most popular cruise destination; congestion issues are not unique to Sitka (e.g., Zion National Park). He encouraged cruise lines to purchase local seafood. An MOU with Norwegian Cruise Line may shift three ship days to stay under the limit. Concern was expressed about a potential ballot initiative’s 18-month permitting cycle being incompatible with cruise booking schedules; if passed, the 300,000 passenger cap would be unachievable due to larger ship restrictions. The mayor will explore a destination management company to track numbers and traffic solutions.

Executive Session

• The Assembly voted 7-0 to enter executive session from 7:10 PM to 8:30 PM to receive attorney-client communications on litigation (Wampler v. CBS, Mace v. CBS, Cranford v. CBS) with legal counsel. Upon reconvening, Deputy Mayor Tim Pike announced a special meeting on Thursday, February 13, to continue discussion and make a decision on one of the cases.

Key Outcomes

• Consent agenda items A and B approved 7-0.
• Appointments and reappointments approved 7-0.
• ORD 25-03 (Mid-year Supplemental Appropriations) approved on second and final reading 7-0.
• ORD 25-04 (Electric Fund USDA Loan Repayment) approved on first reading 7-0; second reading pending.
• Tourism commission liaison assigned: Chris Ystad (primary), Scott Saline (alternate).
• Special meeting scheduled for February 13, 2025, to further discuss litigation matters in executive session.
• Meeting adjourned at 8:32 PM.