Sitka Assembly Special Meeting on FY2026 Budget and Capital Plan - March 12, 2025
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Sitka Assembly Special Meeting on FY2026 Budget and Capital Plan - March 12, 2025
This special meeting of the Sitka City and Borough Assembly focused on the fiscal year 2026 budget, including the Capital Improvements Program (CIP), enterprise funds, internal service funds, and the general fund. Key discussions centered on asset management, project prioritization, rate increases, and deficit reduction. The assembly voted on several items, including removing a $30,000 animal shelter HVAC project from the CIP and adopting option one for balancing the general fund deficit.
Consent Calendar
- No consent calendar items were presented or voted on.
Public Comments & Testimony
- No members of the public testified during the two public comment periods.
Discussion Items
- FY2026 Capital Improvements Program (CIP): Electric Utility Director Ron Venson and Asset Manager Mark Seedy presented a consolidated, risk-scored capital plan covering over 600 projects across departments for a 10-year outlook (FY25–FY35). The tool allows sorting by risk score to prioritize high-risk projects. The plan feeds into rate models and long-term planning. Assembly members asked about project scoping (e.g., bundled projects like Senior Center rehabilitation, City Hall, and City-State Building), funding sources, and risk scoring methodology. A motion to remove the $30,000 Animal Shelter HVAC controls project (aimed at installing a standardized DDC system) passed 4–3 after debate about cost-effectiveness versus long-term integration goals.
- FY2026 Enterprise, Internal Service, and Other Governmental Funds Budget: Municipal Administrator Melissa presented a high-level review of each fund, including revenue, operating expenses, debt service, capital projects, and working capital impacts. Key points included: Electric Fund: 2% rate increase, no new debt planned, inventory purchases for critical parts; Water and Wastewater Funds: 6% rate increases, investigation of utility lines under Lincoln Street, wastewater effluent disinfection system ($12M, funded with DEC loans); Solid Waste Fund: rate adjustments (2–4%), debate over $1.4M Granite Creek bridge replacement funded from solid waste (justified as access to solid waste facilities); Harbor Fund: 4% rate increase, no new capital projects; Airport Fund: negative working capital due to new terminal, seeking grants; Marine Service Center: healthy fund, two capital projects requested (alarm panel, egress doors). Internal service funds (IT, Central Garage, Building Maintenance) and other governmental funds (e.g., Permanent Fund, CPV tax, Visitor Enhancement, School Sales Tax) were also reviewed. The assembly discussed rate impacts on residents and the importance of growing working capital for future liabilities.
- FY2026 Draft General Fund Budget: Melissa presented deficit reduction options after a $400,000 property tax revenue increase from updated valuations. Two options were considered: Option 1 included increasing Harrigan Centennial Hall rates 20%, increasing pool revenue by $75,000 via additional programming, reducing legal fees by $150,000, and not cutting the sister city visit ($15,000). Option 2 had more moderate changes. The assembly expressed support for Option 1, with comments on not cutting the sister city program and appreciation for Parks and Rec's analysis. A motion to adopt Option 1 passed 7–0.
- Budget Schedule: Staff proposed delaying the first and second readings from April 8/22 to May due to uncertainties (insurance, school funding), but the assembly preferred to keep the original schedule, noting that budgets are living documents that can be amended.
Key Outcomes
- Motion to remove $30,000 Animal Shelter HVAC controls from FY2026 CIP: Passed 4–3 (Mayor Eisenbeisz, Christensen, Ystad, Saline in favor; Mosher, Carlson, Pike opposed). The project was eliminated from the capital plan; staff will explore alternative, lower-cost options.
- Motion to adopt Option 1 for general fund deficit reductions: Passed 7–0. This includes: (1) Recognizing $400,000 in increased property tax revenue, (2) Funding commercial land use evaluation from visitor enhancement fund, (3) Increasing Harrigan Centennial Hall rates by 20%, (4) Increasing pool revenue by $75,000 (through additional temp wages and programming), (5) Reducing legal fees by $150,000, and (6) Keeping the $15,000 sister city commemorative visit.
- Capital Improvements Program: No formal vote on the full CIP; it will be included in the omnibus budget ordinance. The assembly expressed interest in separating the CIP process from the budget in future years for earlier review.
- Budget Timeline: The first reading of the FY2026 budget remains scheduled for April 8, 2025, with the second reading on April 22, 2025.
Meeting Transcript
Thank you for joining us on our special meeting of Wednesday, March 12th, 2025. I'll go ahead and call the meeting to order. 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. One nation under God, indivisible with liberty and justice for all. 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 Clinkitani. Sarah Roll Call, please. Mayor Eisenbais. Present. Mr. Pike. Here. Ms. Carlson. Here. Mr. Yestad. Here. Mr. Christensen. Here. Mr. Mosier. Here. And Mr. Selene. Here. Thank you. Bring us two persons to be heard. This is public participation for any item off of tonight's agenda, not to exceed three minutes for any individual. Seeing none, we'll jump right into our new business this evening. So we're going to start with a discussion direction decision on the fiscal year 26 capital improvements program. John and Melissa have an introduction to this one. And then the assembly can jump in with uh further questions, comments, and deliberation on this. So, John. Thanks, Mayor. Actually, uh Ron and Mark are going to take the lead on this one. Uh they've spent some uh time over the past few months um putting together a consolidated capital list. Uh this is all part of our efforts with asset management and trying to get kind of that that total asset visibility on everything that we have, everything we're responsible for, um, kind of the repair timelines, replacement timelines, um, you know, um proposed sources of funding. Uh, but now that they've been able to kind of pool all the public works and uh and electric department assets together and uh work through that list of risk scoring everything. Uh I wanted to take the opportunity to have them show that product to you all and uh kind of show how some of the filtering works and and then open it to uh assembly questions. All right, so I'll give a look at easy all right. All right. Good evening. My name is Ron Venson. I'm the uh electric utility director. Um and tonight, uh as you can see up on the screen here. Um Mark's brought up um our capital improvement plan, the capital improvement plan. Uh this spreadsheet is a tool that we've um increasingly been using over the last couple years um to basically outline all of the data that has to do with our capital improvement um projects.
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