Special Budget Meeting Summary - January 8, 2026

The Sitka Assembly convened a special budget meeting to begin preliminary discussions on the Fiscal Year 2027 municipal budget. The session focused on reviewing known fiscal pressures, including wage adjustments, rising inflation, and vehicle costs, while evaluating a series of resource proposals covering operating expenses, fixed assets, vehicles, and capital projects. Staff presented detailed recommendations, many of which were approved with adjustments or deferred pending further data analysis, particularly regarding revenue forecasting and compliance with Cruise Visitor Pass (CPV) fund regulations.

Consent Calendar

• No routine consent items were presented or approved during this meeting.

Public Comments & Testimony

• Nalani James (Bayside Taxi Tours and Airport Shuttle):
  • Position: Expressed full support for the request to allocate two to three taxi parking spaces at Centennial Hall. She argued that the current lack of designated pickup/drop-off space forces staff to be "ushered out" despite holding valid permits, and that the city should investigate oversight of Uber and Lyft operations to ensure they are subject to the same taxes, inspections, and transparency as permitted taxis.
  • Request: Asked the Assembly to add a line item for taxi signage/stands and to review the regulatory landscape of ride-sharing services.

Discussion Items

Preliminary FY 2027 Budget & Resource Proposals

• Operating Expenses:
  • Legal Department ($75,590): Requested for a centralized contract database. Speaker Positions: Assembly expressed general support for the efficiency gains. No specific stance on opposition.
  • Planning & Community Development ($100,000): Requested for zoning code updates. Speaker Positions: Assembly members expressed a desire to limit the scope in the current budget, specifically prioritizing telecommunications tower provisions while deferring the broader code cleanup to a mid-year supplemental. Director Amy Ainsley agreed to adjust the request to approximate $75,000 for the immediate needs.
  • Public Works ($100,000): Requested for a project delivery manual and contract templates. Speaker Positions: Assembly expressed strong support, noting the request was a long-overdue step toward efficiency.
  • Clerks' Office ($10,998): Requested for electronic records request software. Speaker Positions: Multiple members expressed full support, citing current high costs of staff time and the need for better audit trails and redaction capabilities.
  • Parks & Recreation ($70,200): Requested to upgrade the Head Lifeguard position to full-time. Speaker Positions: The proposal was not recommended by Staff due to high recurring costs. While Assembly members expressed full support for the initiative due to staffing shortages and service risks, they directed that the item be deferred pending more precise revenue projections from the aquatics program before final inclusion.

Fixed Assets (Non-Consumables >$5,000)

• Building Maintenance ($19,500): Scissor lift. Speaker Positions: Assembly expressed enthusiastic support, joking about employee usage and noting it as the first battery-powered heavy machinery.
• Parks & Recreation ($85,000): Ceiling-mounted mat mover for Blachley Middle School. Speaker Positions: Staff not recommended the item due to priorities. Assembly members supported the concept for safety and space but agreed to defer the purchase to a future supplemental, aligning with the staff's recommendation to address it later.
• Solid Waste ($200,000): Tire shredder. Speaker Positions: Assembly expressed full support and approval, emphasizing the urgency of clearing the 8,000-tire stockpile and the efficiency gains over manual processing. Members noted the lack of local recycling markets but accepted the disposal efficiency.
• Harbor Department ($30,000): Side-by-side UTV with plow. Speaker Positions: Assembly expressed support for the utility provided for snow removal and emergency response on small facilities.
• Central Garage ($200,000): Heavy equipment lift. Speaker Positions: Assembly expressed support, acknowledging the need due to the age of the existing lift and parts unavailability.

Vehicle Replacements

• Police Department ($220,000): Two hybrid interceptors. Speaker Positions: Assembly members expressed full support for the hybrid approach. They explicitly stated they are 100% in favor of hybrids over full electric vehicles for public safety operations given current infrastructure and reliability concerns, approving the transition as part of a planned fleet refresh.
• Electric Department ($206,000): Backhoe loader. Speaker Positions: No recorded opposition; the proposal was accepted to replace a rollover asset.

Capital Projects

• Pool Engineering & Mechanical Upgrades ($460,000 total, $250,000 FY27): Requested to address deferred maintenance and engineering for mechanical systems. Speaker Positions: Assembly expressed strong support for the planning phase to avoid reactive maintenance, though some members requested clarification on specific mechanical needs (e.g., dehumidifier status) which was provided. The consensus was to move forward with the funding to develop a coordinated plan.
• City Hall Door Security ($40,000): Requested to upgrade door hardware. Speaker Positions: Assembly expressed support based on security concerns regarding key management and lock mechanics.
• School Zone Lighting ($20,000): Keet K'wáa Shá Elementary Zone warning system. Speaker Positions: Support expressed for safety and reliability improvements.
• ADA Pool Restroom Upgrades ($60,000): Requested for the pool facility. Speaker Positions: Assembly expressed full support, highlighting the critical need for accessibility.
• Crescent Harbor Family Restroom ($200,000): Requested for a new single-stall restroom. Speaker Positions: Debate occurred regarding the split of funding between General Fund and Cruise Visitor Pass (CPV) funds. While some members suggested a higher CPV percentage, the Assembly directed staff to proceed with the current split (75% General, 25% CPV) to ensure audit compliance, with a directive to revisit the ratio in the future based on updated mobile analytic data. A desire was expressed to design for future expansion.
• Public Services Complex Electrifcation ($250,000): Professional services for electrical infrastructure evaluation. Speaker Positions: Assembly expressed support for planning the transition away from oil-fired boilers.
• Recycling Center Upgrades ($250,000): Requested for safety, fencing, lighting, and tank replacement. Speaker Positions: Assembly expressed full support, particularly regarding the aging oil tank safety risk, and requested that public education on recycling benefits accompany the project.

Key Outcomes

• Budget Process Established: The Assembly received preliminary direction to review the FY 2027 budget, acknowledging fiscal pressures including wage increases and inflation.
• Deferrals: The Parks & Recreation full-time lifeguard position and the Blachley Middle School mat mover were deferred to allow for revenue analysis and mid-year supplemental consideration rather than immediate full-year budget impact.
• Approvals: The following were effectively approved or moved forward: Tire shredder, Scissor lift, Pool engineering/design fund, City Hall door security, School zone lighting, ADA restroom upgrades, Public Services electrification planning, Recycling center safety upgrades, Police hybrid vehicle replacement, and Electric Department backhoe.
• CPV Fund Strategy: The Assembly acknowledged the audit risks associated with CPV funds regarding the new Crescent Harbor restroom. Staff was directed to maintain the current 25% CPV allocation for now but to revisit the ratio in future meetings using more granular mobile data to potentially increase the allowable percentage.
• Next Steps: Staff will incorporate administrator-recommended proposals into the draft FY 2027 budget. The Assembly will revisit the Parks & Recreation lifeguard position and CPV funding allocations once refined revenue data is available.