City and Borough of Sitka Special Assembly Meeting on FY2026 Budget – February 27, 2025
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City and Borough of Sitka Special Assembly Meeting on FY2026 Budget – February 27, 2025
The Sitka City and Borough Assembly held a special meeting on February 27, 2025, to discuss and provide direction on the FY2026 draft Administrator's Budget, with a primary focus on the General Fund. Municipal Administrator John Leach and Finance Director Melissa Haley presented the budget, which initially projected a $743,000 deficit. The presentation reviewed revenue sources (sales tax, property tax, transfers, etc.), expenditure trends, capital appropriations, and resource proposals. The assembly heard from department heads, debated specific line items, and passed several motions to reduce the deficit.
Discussion Items
- FY2026 General Fund Budget Overview: Melissa Haley detailed revenue projections (e.g., sales tax at ~$19.9M, slightly down from FY25), expenditure drivers (health insurance up 18%, vacancy rate assumed at 3%), and the deficit. Scenarios were discussed for loss of cruise tourism ($1.5M net impact) or federal funding ($1.2M net impact).
- Resource Proposals: Assembly members considered proposals for vehicles, equipment, contract services, and new programs. Key discussions included:
- Replacement of vehicle #458 (City Hall vehicle) and #455 (police cruiser). Assembly members debated the necessity, with the police chief explaining that vehicle #455 was due for replacement but the damaged cruiser (from an accident) would need replacement soon. The police department noted that the proposed replacement was a truck, not an SUV.
- Lifepak 35 defibrillators for the fire department ($180,000). Fire Chief Craig Warren indicated the current units are still functional and the manufacturer likely will not discontinue support imminently, so the purchase could be deferred.
- Contract support for the commercial recreational land use plan ($50,000). Planning staff explained the scope and proposed reduction to $15,000 for data subscription (Placer AI).
- Library budget cuts: Interim Library Director Jessica (?) had proactively cut Kanopy streaming ($3,000) and Mango Languages ($1,000) from the budget. Several assembly members argued these were small, valuable services and should be restored.
- Parks and Recreation: Assembly members expressed concern about the rapid growth of Parks and Rec expenses (nearly $1M operational, including the Blatchley Pool). Kevin Knox, Parks and Rec Director, noted that a 20% reduction in temp wages ($11,280) and small cuts were possible, but larger reductions would directly impact services. The assembly gave direction to look for $100,000 in reductions from Parks and Rec operational and/or capital projects.
- Other Funds: Assembly members discussed the municipal haul-out operations (potential enterprise fund implications), airport revenue concerns (Delta pulling out), and capital improvement priorities (e.g., repaving Moller parking lot questioned as not a priority).
Key Outcomes
- Motion to remove vehicle #458 and #455 from the budget (moved by Eisenbeisz, seconded): PASSED 4-1 (Ystad opposed; Pike and Saline absent). Estimated savings: ~$100,000.
- Motion to remove Lifepak 35 from fire department budget (moved by Ystad, seconded): PASSED 5-0 (Pike and Saline absent). Savings: $180,000. Assembly members pledged to support a supplemental appropriation if the equipment becomes obsolete.
- Motion to reduce contract support for commercial recreational land use plan from $50,000 to $15,000 (moved by Ystad, seconded): PASSED 6-0 (Pike absent). Savings: $35,000.
- Motion to add Kanopy and Mango language programs back into the library budget (moved by Ystad, seconded): PASSED 6-0 (Pike absent). Increased deficit by $4,000 (restored funds).
- Direction to Administrator: Look for ways to reduce Parks and Recreation operational and/or capital projects by $100,000. Administrator Leach to report back with proposals.
- Other: Assembly members noted that the capital improvement program should be considered separately from the budget process. Future work sessions on haul-out operations and school district capital planning were referenced. The next budget meeting (covering enterprise, internal service, and other funds) is scheduled for March 12, 2025.
Meeting Transcript
Welcome everybody. We'll call to order the special meeting of Thursday, February 27th, 2025. Please join me for a flag salute. I pledge allegiance to the flag of the United States of America. And to the Republic for which it stands. The Assembly of the City and Borough of Sitka would like to respectfully acknowledge the traditional first people of Sheetka. With gratitude, we proceed on Klinketani. Sarah, roll call, please. Just gotta push buttons a couple times. It just takes a couple times. Mayor Eisenbais. Present. Ms. Carlson. Here. Mr. Yestad. Here. Mr. Christensen. Mr. Mosher? Here. And Assemblymembers Pike and Celine are absent this evening. Great. Thank you. That'll bring us to persons to be heard. This is public participation for any item not on tonight's agenda, not to exceed three minutes for any individual. Seeing none, we'll roll right into new business. So tonight we're here to talk about the 26th budget with a focus on the general fund. We do have a presentation tonight that we'll go through, and then uh then it'll be uh kind of a free-for-all for the assembly. Um I think John and Melissa are looking for a little bit of a guidance tonight, so we'll turn it over to them and uh see where this takes us. Uh thank you, Mayor. Um just a quick introduction before Melissa starts her presentation. Um the draft general fund budget was delivered to you the 18th. I think that was the day we said it, maybe sounds right. Um hopefully you've had some time to review it. Um what you've seen is a uh a deficit budget proposed right now. I shouldn't say proposed, presented, um, and uh hopefully we get some guidance tonight on areas that we need to um maybe look at again uh and for potential cuts uh and other ideas that can help us put a put a final budget together. Um so there's some decision points throughout the uh presentation that we'll be looking for some guidance on tonight. With that, Melissa. All right, and just a reminder that now that the draft budget has been published, um any changes to this piece will require a motion. Um so uh what's in here goes forward unless there's um a vote to change it. Um so generally um some of the challenges that we're facing um for the general fund, um which you know general fund can be a little bit different than what we're looking at with with the enterprise funds, but we certainly have concerns around the economy, um both local as well as national, and then continued concerns is inflation uh around inflation. It's it's slowed, um, but with tariffs and kind of some unknowns looking forward, um you know that slowing may not continue. Um we also have um cruise tourism with the ballot proposition out there for this budget that would be impacting the spring, so that April to June period in 2026. Uh there's also concerns around federal funding. Um we've already uh had a you know lovely morning where we come into work and hear that all of our federal funding is frozen, so that's pretty scary. And and if that were to continue, that would certainly be a huge challenge for the city. Um school funding, um, you know, both trying to offset and make sure our schools have funding while the state doesn't fund, but then at the same time, there are challenges to our budget if there was a substantial um increase to the BSA, because then um you know there's more funding that could be asked for from the city, and so trying to figure that out.
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