Everybody, uh, it is six o'clock, so we will call to order our special meeting of Thursday, April 23rd, 2026.

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 Isenbis present.

Mr.

Pike.

Here.

Ms.

Carlson here.

Ms.

Riley, here.

Mr.

Christensen.

Here.

Mr.

Mosier?

Here.

And Mr.

Selene.

Here.

Uh thank you.

Any correspondence or agenda changes this evening?

I see none.

It'll we'll go to persons to be heard.

This is public participation for any item off of tonight's agenda, not to exceed three minutes for any individual.

All right.

Our first order of business this evening.

Item A, please.

I move to approve an extension of a lease agreements between the City and Bureau of Sitka and Northern and Southeast Regional Aquacultural Association Incorporated.

Regarding block four, lots two and three, Gary Paxton Industrial Park, and authorize the missile administrator to execute the document.

Second it's been moved and seconded.

Just background information on this one.

This is coming before us tonight to give uh a little bit more time to renew renegotiate some of the um terms that uh the assembly was interested in looking at, uh, so it would just extend it to October 31st, 2026, so that they are still in compliance but would uh give that time for staff.

So is there any public comment on the extension of the lease agreement?

Good afternoon for the record, Scott Wagner, General Manager and SRA.

And I just want to thank the assembly for taking this up in quick order.

I know you got a lot going on.

I'm not gonna take up a lot of your time, but I would encourage you to support the motion that's before you and appreciate the extra time to work through the issues.

Anyone else on the extension of the lease agreement for NSERA?

Assembly deliberation.

Sarah, Mayor Eisenbys.

Yes, Mr.

Christensen, yes.

Ms.

Riley, yes.

Mr.

Mosier, yes, Mr.

Celine?

Yes, Ms.

Carlson, yes.

And Mr.

Pike.

Yes.

The motion passes 7-0 on item A.

Great, thank you, Assembly.

Uh that'll bring us to the main part of tonight's meeting.

Uh the budget.

So we have a couple items in front of us that will uh deal with the budget.

Uh we will start tonight with the enterprise funds, internal service funds, special revenue funds, um, and then uh go from there.

So, John, I understand you have an introduction, please.

I do, thanks, Mayor.

Not much of an introduction.

Um all of the funds tonight.

I think uh and hopefully this is the uh last budget meeting before we put uh we put the omnibus ordinance together uh in front of everyone.

But we'll start, as you said, with the enterprise fund, internal service funds, and the special revenue funds, then we'll move into uh the general fund after that.

A lot of hard work over the past few weeks uh in getting that balanced, and it looks like we have a uh a very, very small surplus now in the uh uh general fund budget for the assembly's consideration.

But uh Brooke will first walk us through all the uh all the other funds before we get into the general fund.

So with that, Brooke, if you want to start the presentation.

Good evening.

So before I get into my presentation, I'm gonna talk about my process a little bit.

Um there were you know over 200 pages of documents in the packet, and it's not very realistic to go line by line through every single fund, especially with the special revenue funds.

Um I have a few two to three slides on on each of the enterprise funds to talk about working capital, but I will um pause at the end of each of those slides to talk about that specific fund.

Um, and that's kind of how I have structured this.

So it looks like a lot of slides, but it's really not too many.

So before we get into talking about the individual funds, I I want to talk a little bit about um reading enterprise and internal service fund budgets.

So probably some of this information would have been helpful to have while you were looking at the packet.

But budget and actuals on these reports are they're not directly comparable.

Your budget is really focused on cash outlays and your actuals for the closed years include non-cash items and accounting adjustments in them.

We also do budget for depreciation, which is not a cash outlay, but that's a best practice piece so that your financials and your budget reflect asset use and long-term replacement needs.

So the working capital for these funds, it serves as a financial buffer, and the baseline simple calculation for working capital is just current assets minus current liabilities.

And we also commonly use it to support capital and other large non-recurring costs.

One other piece of this is that the appropriations are the legal authority to spend.

So kind of some general conditions affecting you know a few or all of the enterprise fund.

So utility fund finances are driven largely by long-term infrastructure needs, capital replacement cycles, and debt obligations shape planning for these funds.

Um have impacted you know the majority of the funds, and then we also have impacts from the compensation study and the new collective bargaining agreements on the personnel side.

So the port director position through this budget is is frozen through FY 2027 because of the financial condition of a couple of the funds that carry the cost of that position.

What is frozen mean?

It means that the FTE is not gone, but we we can't fill it.

So we don't have the appropriation to pay it, but we're not reducing the FTEs.

So it's and it's not the same thing as cash.

It does include cash receivables and other current assets, but um it doesn't even include all the cash because uh some cash with restrict restricted balances, so um things like the bond covenant accounts are not part of this calculation.

Um and not all working capital is immediately available to use.

Um, some amounts are tied to capital projects and upcoming debt payments, and really when you see me mention undesignated working capital, that kind of reflects what remains after these commitments.

Um and that distinction is important when you're looking at financial flexibility.

Um and kind of as a general measure uh working capital is useful, but it doesn't tell the full story.

Um it requires a lot of context.

Um you look at the working capital balances that you'll see in some of these charts.

Um, the prior years reflect actual results, but the numbers for FY 2026 and 2027 are projected.

So the final amounts there would depend on on revenues spending and when activities occur in those two years.

Um year-to-year balances between working capital are influenced a lot by timing, um, your capital spending, your debt payments, and and your external funding don't all occur evenly.

Um I've mentioned this a few times, but it is important.

Um, not all the reported balances are actually available to spend.

Some resources are committed or or not immediately accessible.

So really to kind of finish that off.

Evaluating working capital does involve a lot of judgment.

So your appropriate levels are going to be dependent on your operations, on your risk and and comfort with risk, and on the financial structure of the individual fund.

So starting with the electric fund, we did cover quite a lot of information about the enterprise funds during the rate meeting that we had, at least the all the enterprise funds that have rates.

So this is just kind of a high level of some of some of the most important pieces.

So with what's included in the budget right now, there is a customer fee increase for electric, but there's no energy rate increase.

So for a typical residential customer, it'll be it's less than a dollar a month that that should impact their utility bill.

So about 700,000 of planned 27 projects had to be moved into deferred, and they're not included under the current rates.

Do continue to put pressure on this fund, and and it is important for us to have some sustained generation of working capital to support capital investment.

One kind of unique thing about inventory, or I mean electric, it's not the only fund that has an inventory balance, but it is the only one that has a material inventory balance.

And so a million dollars of what you see in the budgeted expenditures for FY 2027 is actually inventory purchases.

So this thing, um this graph that I have is um depicting the working capital uh for the electric fund over the last um several years.

So, like I mentioned before, those first three that you see for FY23 through FY25, those are actuals, and the um the two on the far right for 26 and 27 are uh based on projections and on the budget.

So kind of what this tells us is that ultimately if the um if revenues and expenditures in the electric fund came across exactly as we've budgeted them, this is the impact it would have on electric fund working capital.

So you would end up with um working capital of about 25.3 million dollars of that amount um uh in 27, about 16 million dollars is estimated to be um committed for capital projects.

Um there's another piece in there for the upcoming debt payment, and then that leaves the fund with about five point um seven million dollars in what we consider to be undesignated working capital.

So for this fund, the the working capital in in general remains uh pretty strong, but it is increasingly tied up in capital projects.

So when I talked about the FY27, the the 15.9 in capital, that's an estimation based on on spending in new appropriations, but right now there's actually 15 million dollars committed to open capital projects.

So this is the these are the only two slides I have for their electric fund.

I'm not sure if you wanted to talk about the fund by fund or if anyone had any questions.

That's a question.

So when you have your 2026 projected how I mean I'm just thinking about the effect of the very cold winter we had.

Is that already figured into this, or is that gonna be down the line a little bit?

That would be down the line.

It's a little too soon.

That's too recent for it to have impacted the projections that went into this budget.

Brooke, is the uh debt commitment?

Is that just going to the interest of Blue Lake?

So that little orange-ish salmon colored um square is just the principal, um, the debt principle that's due the subsequent year.

So what you see in FY 2027 budgeted, that's actually the principal on all the electric funds debt for FY28.

Where does the interest go?

The interest is is expensed out.

This is just kind of a there's lots of different ways that that people um the finance professionals get to undesignated working capital.

It's kind of a nebulous term.

What we do is is preserve uh an amount that's equivalent to the next year's principal in that fund.

So we say we're not gonna say this is undesignated, which means we don't put it out there to be used because um we're making sure that it's there.

So just to clarify that that's there's like a line in the electric fund expenses that says interest payments, right?

And that's that.

Okay, that's correct.

Okay, next up is the water fund.

So some of the key highlights there and included in this draft budget is a six percent rate um increase, which uh will be about four dollars a month for your typical residential customer.

Um so we talked about this uh or I talked about this quite a bit at the um rate meeting, but the critical secondary water project is adding about a million dollars in annual debt service to this fund.

It's been anticipated in prior budgets.

Um we have to kind of project when we think it's actually gonna go into repayment, but it is um expected to begin in FY 2027, and that first payment that we make will be a larger payment because it includes um your accrued interest.

Um for this fund, ongoing infrastructure needs um combined with rising construction costs, um continue to put pressure on it on this fund.

Um if you looked line by line, there was what appeared to be a considerable personnel cost increase.

That's actually because of an allocation of two positions that are split between water, wastewater, and solid waste um fund, and that was just a reallocation.

So it's not new or more staff, it's just splitting how they're um paid for a question for you, Brooke here.

That one million in annual debt service, is that anticipated to be the ongoing or is that the higher rate for the first year?

That's anticipated to be the ongoing.

The first year will be considerably larger than that.

Like like double.

Okay.

Thank you.

So for working capital in the in the water fund, um, this budget along with the projections for FY26 uh looks to put the fund at about seven million dollars in um working capital at the end of FY 2027.

Um 2.7 million dollars of that would be um in capital projects, uh a million in the debt commitment, and which leaves about 3.3 million in in undesignated working capital.

So this is one of the instances where we're working capital's been built up in prior years intentionally.

It begins um to decline in FY 2027, um, which is driven by the critical secondary water debt service and some planned capital investment.

So it's not always a bad thing when you see dips like this, um, especially if you look at at what levels of working capital is appropriate for a fund to have when you enter um you know when you get a new loan that's the size of critical secondary water and you you prepare for making those payments, it does mean that you increase rates um in advance to make sure that the fund can afford it and that it maintains the current ratios that are are required as part of um having that debt.

Remind me, we're in the last and final year of the three-year kind of scoped plan for these funds.

Is that correct?

The the only three-year thing that I'm familiar with is that customer fee increase that was electric fund.

Um, I believe when the original 6% increase had been recommended, it was communicated that that would be a regular increase for a while for the fund to afford the debt service.

To rebalance itself, yes with our larger projects.

Okay, thank you.

Anything else on water okay, wastewater.

So the draft budget does include a rate adjustment of two percent, um, which is about two dollars a month for your typical residential customer.

Um we we talked about this quite a bit at the rate meeting as well, but um the effluent disinfection project um that we are required to do and and have in place by 2030.

Um we were able to um get a a CDS for that amount.

It does have a required match, so it's still is gonna cost the fund something.

Um but there is some significant capital spending or capital additional capital appropriations in in FY2027 for this fund, sorry, um, for effluent disinfection, and then the Lakehurst Monastery Kincaid project.

Um, and those are funded primarily through working capital.

There is some work being done on a DEC loan that has a um a portion that could be forgiven that we're working on to see how that can be secured.

Uh the challenge there is that you aren't allowed to use um federal funds to match other federal funds, and we've had in the past a little bit of a challenge with these DEC loans where they've said no, this isn't federal funding, and then we've gone through our audit and midway through the audit, we get notification that it is in fact federal funding.

So we couldn't do that with a project like this if we were going to use that as our match or a component as our match.

So we're trying to figure out how to get some some certainty with that piece as well.

Um so this one has a personal cost decrease due to the allocation of those same positions.

So the um those two positions that are split between water, waste, water, and solid waste.

Um even though a couple of these projects are you know it they're pretty expensive, it's it's quite a large capital appropriation.

Um the ongoing capital needs do continue beyond affluent disinfection.

So just like a lot of our other funds, replacement of of aging infrastructure and and coordination with road projects means there's there's plenty of other stuff on the list as well.

Sorry.

Um can you repeat that again about the you can't use the effluent disinfection CDS as a match?

So the effluent the CDS requires a local match.

It requires a local match.

And you can't use federal funds for that local match.

And you can't have the CDS go through the denali commission to use as a match against itself, I imagine.

That still is federal funding, even if it's passed through the denali commission removes the federal funding designation, I thought, and you can use it as a match for other federal funds, but you can use it as a match for other federal funds.

So I don't think you could use it as a match for its own project.

There's probably some nuance depending on on what type of funding you're talking about.

That has not been my experience with what I've seen from them.

Okay.

And this says compliance by 2030.

Is there an estimated time and when we need to understand those local match requirements?

So is this a fiscal year 28 rate adjustment?

We're thinking or beyond.

I might have to get Mark to help me.

I'm not sure.

It depends if I can answer the question.

So is your question whether like about the timing of spending on it or how much time we'll have to figure out the matching component?

Yeah, that second part.

Good evening, Mark CD public works director.

Uh our goal is to try and have that ironed out in the next six months or so.

Uh, next week we have an agenda item on for this loan through Alaska DEC with their state revolving fund.

They have told us over the phone that they can do this without the CFDA that catalog of federal domestic assistance number on it and make it state funds.

However, we're our experience has been that we can't count on that.

Just so that if we don't have the loan executed, that money is there, and we may not have to count the loan as match our final design is coming in at around 1.1 million.

Um we've been told previously, just over the phone talking with DEC that they're offering up to 1 million a month for forgiveness, but that's because most communities have not seen a design cost more than that.

Um so we'll be looking at trying to get our design finalized for a forgivable loan through DEC with a small administrative fee.

Lovely, because there's several other Southeast communities going through this, so hopefully there's some scale there that's and they are offering this specific to the effluent disinfection projects, the 301H waiver that most communities had been operating under that is no longer available and they're given this five-year timeline.

Um so this kind of a forgivable loan is not available on any of our other projects right now.

They're prioritizing it for this unfunded mandate.

And we'll get all of that money at once, or will it be over the course of years the money for the loan, I think should come at once because we have a uh contractor underway doing a 35% design right now, and this we have the quote to get to final designs for construction already.

Okay, thank you.

So for the working capital for the wastewater fund, um, kind of a somewhat similar situation with water.

Working capital has been intentionally built up over the last few years and is being used for capital projects in FY 2027.

We have known uh about um the requirement to the effluent disinfection for a while and have been trying to figure out how to pay for it.

Um so there was some preparing done for that.

So based on the FY 2026 projections and the FY 2027 draft budget, it would um put the wastewater fund at a uh working capital balance about 7.8 million dollars, about 4.8 million of that would be um committed for capital projects, um, and then uh another million for debt, which would leave just about two million dollars of undesignated working capital in that fund.

Okay, next is a solid waste fund.

Um the draft budget includes a two percent rate adjustment, which would be about two dollars a month for a typical residential customer.

Um, the fund position has improved substantially following some prior rate adjustments.

So excuse me.

Uh recent activity, local activity has supported the fund performance.

So about some larger um construction projects in town that have um increased some of the volumes and and brought in some kind of unexpected revenue.

Um, and then for this fund, operating costs really are the primary driver of this fund.

There's not the same level of infrastructure needs as most of our other utility funds.

Um, so really it's driven uh largely by transportation and and disposal costs.

And then this is the last time you'll see that little note about the personnel cost increase due to the split of those two positions.

So this one looks less friendly in FY 2023, but um so working capital in this fund improved from prior negative levels of driven by rate adjustments and some improved operating performance.

It is kind of important to explain what it means when you see a negative um undesignated working capital balance.

So this happens when your commitments um exceed your working capital.

So that reflects capital project balances and debt commitments relative to available resources.

So what that really means is if you had to spend every single dollar in your um capital project appropriations in one year, you might be in trouble.

You might not have enough cash to be able to do that.

It doesn't necessarily mean that at the time you have a negative cash balance or no cash because these measures are impacted so much by timing.

So those um the 20 FY 2026 projections and then the impact of the FY 2027 budget would would likely put the fund at around a 2.1 million dollar um working capital balance with about uh one and a half million of that tied up in capital projects, um, leaving about 400,000 in um undesignated working capital.

I have a question for you.

So is there is there any way to collect information on what the impact on solid waste from the cruise industry is uh I mean cruise ships drop-off stuff.

I know it's paid for probably by the terminal, maybe I don't know, but you know, there's quite a bit of an impact as your access to other funding sources of from that, or there is a small amount from the um McKinley research cost allocation study, but um I was actually surprised by that one that the solid waste fund was actually not impacted very much by cruise ships.

The larger ships at the dock, from my understanding, do not drop off solid waste here.

It's usually just the the smaller ones that are down at uh GPIP, and the volume from there is has not is not very high.

And they pay for it.

Yes, we do see impacts on um some of the garbage services that the city pays for, like we have to increase our cans quite a bit downtown and the pickup.

Um we do um do some coding to CPV to make sure that those costs are covered.

Thank you.

Um does the same go for wastewater.

It does again.

That was solid waste and wastewater were the ones I really expected to see big increases, and it was not an appreciable increase.

And in fact, well, don't quote me on it.

I think the uh the wastewater um usage actually went down, but um I'll it's been a while since I've looked at the report, but I do remember specifically that solid waste and wastewater, we did not see an appreciable increase.

So what I'm hearing is we don't need toilets taking up Mag Sudoff Street if there's like less usage of them.

Anything else about the solid waste fund moving on to the harbor fund.

So the uh the draft budget right now does include a four percent rate adjustment.

I know that the ports and harbors commission maybe last week or this week, um, recommended a three percent rate increase.

Um, but this budget does still have the the four percent.

Um so this four percent means about seven seven dollars a month um extra for a 32-foot vessel, about nine dollars a month for a 42-foot vessel, um, and that four percent is consistent with a 2024 harbor rate study that was done, and the guidance had it um the recommended rate increases to be inflation plus 1.5 percent.

Um, so especially when you like look at the the graph uh with this one, the fund does appear stable, uh, but the problem is that the infrastructure costs are so high that it's not enough.

The replacement and repair needs in this fund are really substantial, and um the costs far exceed what can be supported through current rates alone, and and that combined with the fact that external funding for the for harbor infrastructure is declining at least with the source that we're used to using.

So historically, the our harbor infrastructure has been supported by the the state of Alaska 50-50 grant program, and and funding has been decreasing um over the last few years, and uh they're not expected to fund any of those projects in the next year.

So for the harbor fund, um, a significant portion of the working capital is tied up in in capital projects, it's committed capital projects.

Um, there's about eight million dollars in open capital appropriations.

Um it's also kind of important to note with this one that the seawall project funding, there's about a little bit over a million dollars that the marine service center fund sent to the harbor fund for this project that are still sitting that's still sitting in this project.

Um, if that doesn't proceed, uh that money will be returned to the marine service fund.

So the harbor is holding on to about a million dollars of marine service center funding right now.

Um based on the 26 projections and and this budget, uh it would put the harbor fund at about a 14.4 uh million dollar working capital balance with a little over eight of that in um capital projects, and um about five point seven million dollars in in undesignated working capital.

I don't know what the right time would be to mention it, but if we are gonna change that rate, would this be the time?

Because it would have to be done through a motion, right?

That was that was gonna be my question to the assembly.

Um if you wanted to uh entertain what Ports and Harbors recommended, we can wait till the end of the presentation, or if if there's a pause here, I'm not trying to put you on the spot, but um you mean because there was a zero rate increase for that.

Yeah, uh, as liaison uh there was a couple of meetings it took them to get to deciding what their recommendation would be in their last meeting.

Um they didn't pass a three percent rate increase with the caveat that they would spend the next year looking at additional revenue sources to compensate or make up for that one percent to total four.

So there's some creativity gonna be coming.

Um the other side of that is is that any additional fees services areas of of revenue would come in the fiscal year 2028 cycle, and um then there would be a gap for 27.

What kind of creative uh revenue solutions did they throw out any ideas?

Just curious.

Of the few mentioned uh distribution of fish box tax, it's currently 40 percent general fund, 30 harbors, and 30 fisheries enhancement.

Um so that 40 percent from general fund um seemed to be seen as an opportunity.

Um do you rescope that over?

Um and then another one that was floated was considering more of eastern and western channel as part of the harbor system to then be able to have a bigger area to collect fees on and to investigate other uh anchoring fee structures.

Okay, thank you for the so that's like people that get power that put a power to the islands and then charge them.

Oh, that wasn't mentioned.

Um large boats with anchors were were mentioned in parking locations.

Um do you want to add anything to that?

If you wish, or am I doing a decent enough job summarizing what was discussed?

Okay, I'm inviting the harbor master up to speak.

They were mentioning expanding jurisdiction to be able to provide designated mooring areas and morage spots that we would service guild charge deal that's for dropping the pick.

I don't know what their full thought was on it.

It's a great question.

Very good.

Can I ask you a question?

Um we're gonna have I I assume given the um you know, state of the harbors, like the depreciation and everything, we're going to have to increase rates again next year, right?

This is just like what we have to do.

So hypothetically, we could give them a year to come up with these ideas and then have this conversation again next year and be able to cut a percentage off if it is again four percent, if we have some alternative structures in place.

Right.

So the way I look at it is you know, our mortgage are providing for the service that we're able to provide in the maintenance for the infrastructure, and then also build up our capital to apply for grants that we have the opportunity to.

Um so if they came up with something, then yeah, maybe it could or decrease whatever that future rate increase would be.

Brandon, can you say your name for the record?

Sorry, Brandon, Harbor Master.

Calhoun I used to give a stand a hard time.

I used to give a stand a hard time.

I think I have a new target.

I don't know if I just throw it out there.

It seems to me might be easier just to do the 4% here.

And because some of those ideas seem like they would take a lot of work to try to discover scope out and implement within a year's time.

That's just my thought.

My point is in saying that is I'm okay with the recommended 4%.

But I would consider if somebody wanted to make a motion.

Yeah, Kevin, I would back you on the maintaining 4% right now.

If creative methods of revenue come in for next budget year, I'm happy to cut that down to a 2%, 1%, 0% rate increase, um, depending on how many different revenue streams are able to find.

Um but I think we're going a little backwards, cutting revenue first and then seeking to make it up as opposed to finding a new way and then cutting the rate.

Mayor, if I may, um I'll I'll speak kind of frankly here.

Um a lot of comments at that ports and harbor commission meeting were uh it doesn't matter what we recommend, they're gonna do what they want anyway, and I just want to put this out in the in the public realm right now that um I think timing was the was the major factor here.

Um staff had to put uh numbers together without having a recommendation, and and we made our best estimates given the uh the needs of the department.

Uh, but I think had we had we had that recommendation earlier, we tend to follow that recommendation and try to build a budget out with that.

So um I I don't want anybody to think that what uh what was discussed has not been considered.

I think just timing was a factor here.

Yeah, I don't agree with that statement.

Um this assembly has followed the rate recommendations even when they were higher than uh the the body had initially thought of, and it was a delay issue.

So we had to push forward um with or without their recommendation, and this is what we came to.

So in a if we get a more timely recommendation next year, we can build that into the budget more appropriately.

Yep, that was passed April 8th, and you know you need to have the budget by the end of April.

I believe it's in code that their recommendation should come forward in January at the beginning, and so it was it was a timing issue here.

I wish we could talk about the Marine Service Center fund first.

I don't save the airport for last.

Um, over this one if that's a yeah.

So the airport fund has a a few extra uh slides.

There's some things to talk about here.

So none of it um or at least not much of it should should come as a surprise.

Um so there are some significant operational changes from the the ongoing airport uh the terminal project, um, and some ongoing cost increases from an expanded facility from a larger footprint.

So we're seeing much higher utility costs.

Those are still kind of fluctuating while the project's on ongoing, so it's hard to tell exactly where they're gonna land.

But some of the other costs, the janitorial uh maintenance and and insurance are a little bit more um certain at this point, and they are you know significantly higher than than what they were before.

Um there's also it it is worth noting that there's some temporary cost pressures that are related to this project.

So um there's a very very heavy administrative burden from the grants and the funding for this project.

So their allocation um that really uh you know finances time, administration's time, all of those pieces.

It's it's much higher than it normally would be because of how much time it takes from staff.

Um there's also that uh operating revenue is is lower than what was initially expected, um, part and that's partially due to the departure of of Delta Airlines.

So for FY 2027 for the budget, there's a there's a projected um gap deficit of about 390,000 um dollars.

So the operating budget does reflect minimal expenditures.

There's there's not much in there except the things that we have to pay for.

Um, but we are working on some long-term um solutions within the existing constraints.

I want to be up to it.

Okay.

So it's kind of important.

Working capital by little graph is gonna look a little bit different.

It's really not that useful for this fund because a significant portion of the fund's cash is restricted.

So the PFC revenues and the bond proceeds are limited to specific uses, they're not available for general operations or discretionary spending.

Um and which means working capital doesn't end up being uh a meaningful measure while the project is ongoing.

Um the the bond proceeds and other restricted funds are recorded as non-current assets, which means they're not part of the working capital calculation.

Um so that's what can make working capital another one of the things that can make working capital appear negative, um, even when there is actually cash.

Um it is really important to note that we have um bond requirements that have to be maintained.

Um net revenues have to meet required debt service coverage ratios, um, and the timing of revenues, expenses, and debt service um does affect compliance and and it limits some of the flexibility within this fund and within working capital.

So the operational gap um is gonna require some future solutions.

Uh we've talked about uh paid parking and and also some additional lease revenues once the project is complete, um, and some additional just adjustments are probably gonna end up being needed after project um completion.

Uh general fund support could end up being required if the conditions persist.

Now I'm gonna jump in if it's okay.

Um there's a lot of work being done on this fund, and uh, I'll use one of Mr.

Christensen's comments of a budget is is a guess.

Um, and this is about the biggest guess we're making right here.

Um our hope is that a new building is going to require less maintenance, but we have to plan based on the the square footage and what the building looks like.

Uh leases are um a big it's a major issue right now.

We still don't have the finalized leases because we don't have final spaces for everybody to be in.

Um, and we also have to worry about the aeronautical, non-aeronautical, and you probably remember the the presentation I gave to the assembly about three years ago.

This is kind of the expected situation, right?

We knew we had that discussion about paid parking and how that's really what is going to keep the airport alive.

Um, one of the things we negotiated into the state and with the state in the master lease agreement was you probably remember the discussion around concessions.

The I think it's a four or eight and twelve percent concession charge on it's like non-food items, there's concessions on food and then concessions on alcohol.

Um the state was going to we had to collect those concessions and give it to them.

We negotiated in that we get to keep those concessions, but we can't get we can't start collecting those concessions until the leases are in place.

So that will hopefully be another source of revenue.

Um parking is something that we're still looking for.

I know that um there will be some um community angst over paid parking, but I did happen to see recently on social media when somebody was asking about uh can you park for two weeks, and someone said uh just park in the main lot.

The barnacle only cost $35 and you can park there as long as you want.

So that tells me there's an appetite for some uh for some paid parking.

Um but that uh I I think as we expected three or four years ago, this is the position the fund is in, and we're making those moves that I I put out in that loose business case earlier to get us to that break-even point.

Thank you.

Um the health of this fund part of the consideration for freezing the port directory.

Does this um poor situation impact our ability to secure funding for the float plane dock because that is coming out of this fund?

Is that correct?

What it does is complicates the financial outlook of the fund to make it really hard to figure out how much um the undesignating working capital you might need in there for additional match for grant funding right now.

It's very difficult to.

I might even be willing to say impossible to figure out how much that actually is, and that's gonna be the hardest part is figuring out what's there after this project is done.

Yes, and if it's difficult for you or us to see any, you know, potential people that we're porting to may also have a more challenging time with that.

Okay.

I don't have any answers for you, but I see it too.

So I did put this graph in here because I didn't want it to seem like I'm hiding something, but it doesn't tell you really anything.

What it tells you is that we just basically assume any working capital that is in there is all committed to capital projects right now.

We know that working capital is declined during the project period.

That makes sense.

And it's not very common for us to have funding that's structured quite like this.

Not just the fact that it's multiple sources, but even within the our awards, there are there are multiple awards that make up the grant funding that we're receiving from the FAA.

And each of those makes it just a little bit more complicated because you have they get tracked differently, they end up with different ICAP rates.

There's just it's it's not really like anything else we've done before.

On this airport, is there any or what's the anticipated kind of timeline for having those leases figured out and having some sort of start of money coming in?

I think we'll have the um master aeronautical, or we'll have the aeronautical lease for Alaska Airlines probably buttoned up here.

I would say in the next 60 days, we're down to some minor language changes and then a phased implementation of the new rates.

Um, but we're we're very close on that one.

And that mass or I shouldn't say the master lease, the the aeronautical lease will determine what the rates are for the non-aeronautical leases.

Okay, so hopefully there'll be some really nice updates from this when it becomes a projected and when it becomes actuals.

Thank you.

Why does it work like that?

That the aeronautical lease determines the other lease rates.

It's an FAA requirement, and this is built with FAAIP money.

Um, and their stances airports are for aviation services, not for restaurants and stores.

Um, and if there are um let's say another competing airline or uh more of a desire for more aeronautical space, you have to push the non-aeronautical services out for the aviation assets.

Okay, now we can actually talk about my favorite fund.

We're sure all like this because it's just there's this very simple, and that's nice to have a little treat of a budget to do every once in a while.

So for the Marine Service Center, um, the funds in a stable financial position, working capital keeps um growing at a slow but consistent rate.

Um the thing about the Marine Service Center is that that feels facility does depend on that um bulkhead wall that's actually owned by the harbor fund.

Um, and there are some significant capital needs associated with that bulkhead wall.

Um the funding for that for the improvements on the wall remain unresolved right now.

Uh like I said before, there's about a million dollars of marine service center funding um in the harbor fund right now, um, still with the idea that we're we're looking at some alternative funding sources to try and make that happen what kinds of alternative funding sources we were in DC last week looking for some alternative funding solutions.

Um we uh as you remember, it was a build grant that we qualified for a handful of years ago.

Um, and the project was estimated to be about nine I think nine point three million.

We get we had the match money.

Uh we got the grant of about 7.9 million.

Um that was in the times of extreme inflation, material costs went up very, very high.

Um we tried to rescope the project, um, but under the under the rules of the grant at that time, now it's a little more flexible.

Um there was not a lot of ability to rescope you had to build what you said you were going to build.

Uh so we made our last ditch effort and uh put out the bid package with our top end on there.

Didn't get any bids on it, not surprising.

Uh, but now our estimates are that the project's up to about uh 15 million dollars to get completed.

Um so we put in a CDS request for that.

Um we got the question back.

Could you scale that in any way?

15 million is a lot.

Um where our snarky answer was if we could have scaled it, we we would have the first time.

Um, but uh that's a long way of saying we're asking our delegation for help.

The other bonus note there is that uh MARAD indicated if we gave the grant money back without starting the project that it was no hit on us later, so when we reapply, that won't be seen as a negative um so the working capital for this fund is stable and it's growing.

There's there's relatively limited capital commitments, even though there are a lot of positives, it is pretty important to note that you know a fund balance and uh of about 2.6 million is where I would uh project that it ends up in 27.

Doesn't actually go all that far um for capital needs and infrastructure, but um it still is telling a very good story of this fund.

So of that that 2.6 million that I project to be in working capital at that point, um 2.4 of it is actually undesignated, so there would only be uh my projected there'd only be about 150,000 um for capital project commitments.

Well, if anybody really wanted to read the the best documented uh capital project corruption, the building of the freezer building itself is pretty good when you file the Freedom Information Act and go through all the handwritten notes on the side from the panels to the electric defrost to everything on the mechanical end, and the city got 4.5 million dollars to build that building and spent three and a half million dollars and then used a million dollars on various staffs getting their streets paved and stuff, and but just on a mechanical end, everything that's happened there from the inception, and then when you compare what how Petersburg used their money and then what they have today and what we have and what was taken away is part of the the thing that corrupted just a good idea for town, and then it turned into what it was or what it is, and just makes for a good read.

Question for you on this one.

Um Harbors Commission passed a recommendation in November, I believe, um, to look at that gravel parking lot next to Marine Services Center and something with the bulkhead and then the crane in that area.

Um I believe those are all harbor assets or shared in some way.

Is gravel enter this budget at all?

Maybe no.

No.

Um Brandon, do you can you help me remember what that was about, or if that's in your budget, or if I need to make a motion to entertain a discussion here, Brandon Calhoun, Harbor Master?

Sorry, order that time.

Two last names.

Yeah.

Um, so they gave kind of a vague motion of just up land improvement without a specific task that they really wanted.

It was basically just upland improvement.

Um the hoist is part of that, but the hoist is also part of the entire wall project.

So we're we budgeted to do some upland drainage maintenance against the port wall and then that hoist parking area in the harbor budget.

Would you like some marine services budget to support that?

It wouldn't hurt.

Um what's your current uh budget for those few items you just mentioned?

Um I put 25,000 in the harbor budget for upland maintenance to do that drainage and gravel work.

Okay, thank you.

Yeah, and and on that topic with the with the crane and some of the other port wall maintenance.

Um still waiting on a few answers because if it's a CDS or another build grant application, we need to still have some match money in our pocket.

But um I'll be working with the rest of the staff to find out what level we're comfortable with and and what funds we can release with the assembly entertain move in some money from Marine Services Fund to Harbors for some upland maintenance.

My two thoughts on it.

Number one, for what?

Um as the Harbor Master said, it wasn't exactly clear what they were scoping what they were doing, and then number two, uh my preference would be to take that out of uh infrastructure sinking fund if we do need to plus that up a little bit.

Um so for the final enterprise fund, um, we're gonna talk about GPIP.

Um so the fund is facing uh ongoing financial constraints.

They're not new.

Well, some of it's new, but it's mostly not new.

Um they there's limited financial flexibility for for capital or new investment in this fund.

Um the revenue sources aren't keeping pace with infrastructure needs.

So um the haul out revenues aren't generating sufficient funding for long-term replacement.

That was um known.

That is not new news.

Um, that the existing fee structure doesn't support depreciation.

Um and long-term sustainability will require some some policy decisions.

Um future revenue sources and a fee structure will be key considerations of that.

Um absent changes, uh, additional general fund support may be needed over time, not in an immediate need, but um it can get there.

I actually had a question um kind of vaguely related to this, but also our NSRA discussion.

I was wondering if you could tell me what the Southeast the Southeast Alaska Economic Development Fund has been used for in the past recently, it was for the compactor, I believe, and it was a zero percent interest loan to the solid waste fund to uh to get the compactor.

Have they uh has it always been loans?

It says loans and other activities.

I believe our code requires it to be a loan now.

Um there were a lot of grants that went out, uh, like Science Center was a recipient of one early.

Um the assembly, I believe in the Mark Gorman era, uh decided to change that to basically limit it to interdepartmental loans.

Uh it was very difficult to go out to public needs.

Um there was a matching component in it at one point for a small business to get a matching loan, but uh the new wording essentially eliminates that.

So there are other loans out to other departments currently as well that are slowly being paid back.

Yeah, there's there's also some loans to businesses that are I believe still being paid back, and the science center, because it was a little bit of a fight, is technically a loan.

If they stop being the science center, they have to pay it back.

Um it's not a grant.

So yeah, I mean, when we when it was started, it you know, they were doing uh I think we the boat company, I believe, got a pretty decent sized loan.

Not sure about that one.

If I recall that also helped haul out, but it was a gift, not a grant, or not a loan.

I'm looking at that.

Okay.

Okay.

Just wanted to put that forward as a potential uh source for not creating a larger headache for you, but looking at um the NSAW subsidization kind of funding source, and if additional general fund support is needed for GPIP, um it seems like there's some alignment there, but obviously have not kept up to date on all of the changes over time.

So for the GPIP fund, um working capital was significantly reduced to support the Hall out project.

Undesignated working capital is fully utilized, and those prior kind of larger balances that you see do reflect contributions from multiple funding sources for that project.

So kind of where we sit with that is the entirety of the projected working capital amount in that fund is tied up in capital projects.

There really is no undesignated fund balance at this point, or it's it's small enough that it's it's immaterial.

So a bit of a summary, Brooke, correct.

We the last three funds we've looked at, so GPIP, Marine Services Center, and the airport are primarily lease-driven funds.

Is that a good way to kind of categorize those as compared to the rates of the first chunk?

I think that's a fair assessment.

GPIP is a little bit different now with the haul out piece that's in there, but I still think that's correct.

Okay, thank you.

Okay, if there's nothing else on GPIP, I just have a slide each on the internal service funds and the special revenue funds.

Um happy to answer any questions that people have, but it I think it would take more time than anybody would want to spend for us to go through each of those special revenue fund budgets.

So kind of a reminder for internal service funds, um, that would be central garage, building maintenance, and IT.

Uh they provide shared services for city departments.

So instead of getting their funding from outside of the city, they get it from inside.

Um if you see an annual surplus or a deficit in their budget, it does not necessarily indicate a profit or loss.

Um there's some timing differences between costs incurred and cost recovery, and then we set the charges in advance, but the actual usage can vary from what we project.

So there are some adjustments that are also included to kind of correct some of those.

Um the central garage fund does include uh the vehicle sinking funds, and um for uh with this budget, it we would put it up being about 11.3 million dollars in the uh vehicle sinking fund.

Um there's actually 9.4 million dollars in it right now.

Um that's probably not a correct statement.

We've done some transfers for FY26.

That's the FY25 balance, which I've done the entry for.

Um the balance does reflect ongoing contributions and use.

Um, and the point of it, it's it's meant to fund planned replacement of existing uh vehicles and equipment.

Um correct me if this isn't the right place to act that ask this, but how many are we purchasing any vehicles this year?

I know that we cut the police department vehicles.

Are there any purchases moving forward from any department?

Oh, you one would think that I should remember.

I don't think so.

There was one that was up, but we did it through the mid-year because it had a fully funded sinking fund.

Mark or Connor, do you remember?

Is there one?

Yeah, the electric department had something, I thought.

Yeah, okay, but just equipment, not any actual vehicles.

And we're still working on right sizing our fleet.

Is that correct?

Correct.

Anything else on the internal service funds?

Okay.

Um, so for the special revenue and other governmental, there's fiduciary funds in there also, but I did not think anybody cared about that distinction for for the budget.

Um, I did include a list with the packet of a little explanation for each one of those funds, but uh kind of generally they're used for specific defined purposes, uh funded by dedicated revenues and and structured for specific uses.

They're not um available for general operations or discretionary use.

Um the detailed fund balance information is actually a lot easier to see in the ACFER in our financial statements than some of the others are because it doesn't require you to perform a calculation.

You can see them because those those funds operate pretty simply.

Um the balances aren't directly uh comparable to other funds.

They might appear really large due to the nature of the fund, um uh, but they really can't be used outside of their intended purpose.

So some kind of larger examples, more visible examples of these funds uh are the public infrastructure sinking fund, school building infrastructure fund, and then the CPV fund.

But there are lots of them.

And this is my last slide in this area of the presentation.

So the next section is is on the general fund budget.

Uh great, thank you.

Let's uh assembly, let's take a break.

Um, we'll revisit this item uh before we move on if anyone has any comments.

Um and if not, we'll move on to the next item this evening.

All right, assembly.

So we're still on item B this evening.

Uh just needed to take a break there, but didn't know if there was any further discussion around any of our enterprise funds, internal service funds, and special revenue funds that needed to be had tonight.

No one has any questions about CPV?

Yeah, I would really like to know how that is possible that we have an influx of visitors and the wastewater went down or was not.

I mean, we at the beginning of this, like we're paying local businesses to allow people to go use their facilities.

So how how is that like we know that there are people and they are using the places?

I can try to make it make sense.

Um the best we can do is measure the flows that are going through the um through the outflows.

I mean, I we're not uh counting who's using it and what like we're not sitting there with clickers outside the restrooms or anything or counting people.

Um, but flows through the wastewater treatment plant did not show any any real appreciable increase from a regular summer.

But the rest the temporary restrooms and the grant programs were funded through CPV.

Those were the restrooms were completely purchased with CPV funding.

Um I'm not sure the uh the grant program was as successful as we hoped it would be in the first year of doing it.

I mean, my recollection was that the mayor said my uh building is so old, we have to get some other facilities because like a lot of our downtown buildings are not built to handle this increase.

So I I just was under the impression that there was an increase, and yeah, I'm I'm really surprised that it's non-measurable because on some days we are you know doubling our population.

Um I'll assume no one's holding it for eight hours, or that seems hard.

I'm confused.

I'm real confused.

Brooke, please.

I think I can clarify some things.

So that that study mostly uh what we use it for is to substantiate the indirect cost allocation that we use, right?

There are also direct expenses that we charge and we calculate how much of a uh cost is direct and attributable to CPV.

My understand when that study was done, it was a snapshot of a specific period of time.

Things have probably changed since the years that those that study was based on.

I don't remember the details of it, but there was something on with water and wastewater at the time that that study was done that may have hindered some of the results, but I can't recall what it was, and I really wish I could remember who told me that.

I think I might know.

Is I think we upgraded our storm with a lot of the storm drains were going into the regular waste and they fixed them.

So that probably is where that I don't know for sure, but it's I remember talking about that that there was some work done on that because stuff was going into the regular waste stream that wasn't supposed to, and that I uh and that may well probably did go up, but it was offset by that.

And that I uh and that may well it probably did go up, but it was offset by that.

That I don't know for sure, but I think that might be it.

And then uh can you just remind me when that McKinley study was conducted?

What year?

Amy, can you help?

Was it 21 or 22?

22.

And passenger count that year, top of your head.

Yeah, 385.

Wow, seems like we might need to update that study, ASAP.

Some other plausible factors here.

Um, if you're comparing things between winter and summer, uh think of households just dripping um to prevent frozen pipes in the winter, people just utilizing more water in the winter for whatever they're up to because they can because it's not metered.

Um, if we had a metered system, I think those numbers would be a lot more accurate.

Uh, but just water through liquids through um treatment between winter and summer, there's a lot of factors there that um don't consider use.

I mean, correct me if I'm wrong, but we are using information from a study based off of 385,000 people to do CPV allocations for what is currently around 600,000 people.

And are they percentages like that we're just extrapolating, or are those numbers are wrong?

I mean, you know, we have more tourists now that are having more of an impact that we need to be accounting for properly.

It's somewhat extrapolated, like Brooke talked about.

It's a it's a indirect cost allocation method where it basically dials it down to per passenger.

This is how they hit each area.

Um so it can be scaled based on the number of folks that come in.

Okay.

So that calculation now is based on the amount of passengers we're actually getting.

Okay.

I'd be interested in hearing how often communities update those studies.

Somebody did that recently and it came back less.

How much I'm just curious, how much was that study?

Do you remember off the top of your head?

I want to say it was around the $50,000 mark.

Um, but again, I'm just trying to speak from a loose memory here.

I don't know, maybe it's something we consider for next budget season, not this season.

Can you pay for the study with CPV funds?

I mean, I I'll pretty confidently say you'd take it from the CPV funds.

Did you say you want to try that from the CPV funds?

Is that what you just said?

I don't know.

Uh just yeah, not not necessarily for this budget discussion, but something I would be interested in learning more about additionally with those observations that you uh mentioned for potential future use of our CPV funds.

And I I understand where Katie's getting at.

I too have just aside from this discussion.

I would be interested in the future to know how much more we can use out of the CPV funds without getting ourselves into trouble, you know.

I know we're conservative, and that's very good.

Um just being nice to know a little bit more about it and what we can more we can extrapolate from that fund for SIDCO.

But I don't have anything else on regarding this section of the budget discussion tonight.

I don't expect us to fix this situation tonight.

Um, and we tasked John with bringing us back a balanced budget.

It's what he did.

Uh it was it at the expense of the port director.

I'm not excited about that.

I don't have a solution on where else that money would come from.

Um I'm glad to see the position frozen as opposed to eliminated from our staffing chart.

Uh so whoever comes in beside behind John will see that that was the intent of assemblies previously.

Um I'm just not very excited about losing that, but I understand the logistics and the necessity of it all.

You know, we got to get our airport fund right before we can even begin to realistically consider it.

I think just hurts.

How much of Marine Services Center was contributing to that port director role?

Zero.

It was a split between GPIP airport and the harbor fund.

So I believe that watch me get this wrong.

I think GPIP had the smallest percentage.

GPIP, and then the remaining amounts were split between harbors and the airport fund.

I recall in our discussion, maybe it was just a contribution I made in my head for that port director role was that Marine Services Center was going to be a part of that because when the leases were redone last, there was no one in that chain of hand to do it.

It went straight to John.

And that seemed like a not great use of the highest person in a company if some if it doesn't get caught before then.

So I think that should get explored, especially because it has the word marine in it.

Seemingly, and perhaps an advance can be made from that fund to the others, no, to cover this cost so we don't lose this role because I'm not sure how we can see GPIP or Airport get healthy if there's not someone to do the work.

So I am not gonna say it's at all an estimate.

But what I am gonna say is that there's a number of I think uh variables out there that may come to fruition.

I hope that if we receive funds that make it look like we're gonna have a bit more money in the budget, you know, this a surplus that we look at trying to get that higher sooner rather than later.

I I know of a couple of things out there that may happen that may put some money back into the serve, you know, would become a surplus.

So I would ask that um I as we go through the year.

Um, if it looks like we're we're going to have the money for that position to maybe bring it back mid-year or something like that, if if the money's there.

Um, because you know the things things change and sometimes and I and I say I know that there's some things that could definitely improve that.

I guess I'll uh say I I agree with with Steven that it hurts, and I understand what you're saying.

There could be some additional revenue, which would be nice.

Um personally, I would prefer to just keep the plan on uh as is, keep that position frozen for now.

I think the way they explained the airport fund was very clear and helpful to me.

Um, you know, we don't know what our revenue is gonna be on some of those leases because those spaces are complete yet.

Once they're complete, once we have uh tenants in there and leases set up, we'll have a better baseline of what our uh revenue is gonna be, and we'll give us a little more time to investigate parking.

So putting on a hold for a year, I I'm okay with it.

I'm not thrilled about it, but I'm okay with it.

Um I don't see this as a permanent thing, hopefully.

But um, there's a lot of changes, you know.

I see in the next page under the general fund, the health insurance revised from 15 to 8 percent, but it could just as well go up next year again.

Um, so just something to keep in mind.

So it's a long-winded way of saying I'm okay with keeping the uh port director on hold for now.

But I I have like Stephen and everyone else here, I'm glad we're keeping it on the books as a position that we would like to be filled in the future.

Anything else from the assembly on item B, our enterprise funds, internal service fund, and special revenue funds.

Okay, well, thank you, Brooke, for that one.

Um, we will jump now to item C, which is a discussion direction decision of the fiscal year 27 draft administrator budget with a focus on the general fund.

Um, so John and Brooke, you got a great break there.

Now uh you can jump right back into it, please.

Okay, there are only a couple of slides on this one.

I did include a report in the packet that did a direct comparison between the uh budget that was presented at the first general fund uh draft budget meeting and the changes that have been made um since then, some of them minor and and some of them a little bit more um significant.

So uh as far as like the key changes from the prior draft, um the health insurance uh reduction getting those final numbers made a significant difference.

Um it is we were told that 8% was too low, but I would like to make it clear that our broker made sure to emphasize that it was gonna be 11.6 percent, and they negotiated down to 8%.

So yes.

Um so that did make a big difference for the deficit along with freezing a police sergeant um position for FY 2027.

Um so after the first draft, there were some um assembly uh directed revisions that were made.

Then we had these deficit reductions and a couple of of other changes I wanted to talk about too.

So my net impact slide looks a little bit funny without context because both revenue and expenses in the general fund revised draft actually went up, um, but the deficit was eliminated.

So for capital and for the general funds capital projects, um, we did remove the heat pump projects for FY 2027, those were presented as resource proposals.

Um, and we added some additional funding in there for the general fund component of the Lake Hearst Monastery Kincaid project.

That along with the water and wastewater components um uh should allow us to actually complete that project.

Um, and the general fund portion is funded by the uh public infrastructure sinking fund.

That's why both revenue and um expense side of the budget went up in this revision because that difference came from um public infrastructure sinking fund.

So um that did increase the transfer to um 3.95 million, a little bit over 3.9 million.

Um, and that supports the capital projects and street repairs.

I have a question on the police sergeant position.

Um, is that a reduction of an officer as a whole, or is that a reduction of a promotion ability?

Mike, chief of police hall.

Uh it would just be a a hold on a existing position.

Uh we'd like to, we are restructuring a little bit at the police department, but our primary focus is to get our patrol officers to staff.

We do plan on hiring one or filling one sergeant position, so we'll have two for 27, but that would come with inside the ranks and then refill that patrol position.

Uh projectedly, by the way, we're looking at staffing and our recruiting efforts.

We should have that ability to have an extra sergeant come on by uh the 28 budget.

So releasing that.

I don't think we'll fill it, or we could work without it for at least another year to uh release some of that in the budget.

Okay, great.

Thank you.

Um, and we all understand overtime is not only expensive but results in burnout.

Uh dropping this position.

Do you feel that you will maintain a healthy department all around?

Absolutely.

That was a great answer.

That's right.

Can you drop another one?

Negative.

That was a great answer.

Thank you, Chief.

Thank you.

So the result is of that is a revenue increase of 2.25 million dollars for the general fund compared to the uh previous draft, and an expenditure increase of 1.25 million.

So this reduced the the deficit by about a million dollars, uh, and now has resulted in a projected um $30,000 surplus.

I did have a little note in here about um that that the result is is uh from the specific change and is not necessarily uh these aren't necessarily sustainable cuts, but I do want to also emphasize that a couple of the sales tax quarters, my projections were uh maybe even a little bit more conservative than normal because I saw some um unusual behavior in the last two quarters that's making me a little bit um less sure it looks like there could be some some impacts on some of the economic um struggles that people are are dealing with so believe it or not that the well to check.

Yeah, those were the only two slides um that I did on this, um, but happy to answer uh any questions.

I did uh a little breakdown on that comparative report that shows exactly what was um pulled out and added not so much a question, but when we got our packet dump for this week, um and I I spent a couple hours reading through that.

That's why I don't have very many questions because it was really well done.

I I I went through and was like, Well, it was oh there it is.

You know, uh what's the step so oh that's appreciation?

It was it was really easy to read and well done and don't have a lot of questions.

Um it's so thank you.

It's it's long to make a short story long.

It was well done.

And then he'll be the one to uh make a motion on the second beat reading of the budget to change something.

I have a question.

Um I was just looking at the comparables over year uh from you know 2023 to 2024 to 2026 projections and 2027.

Um, some departments it didn't seem to change by that much over the years.

Um, looking at fire protection went from you know two million and kind of just like steadily increased a little bit uh to three million where it's at for next year, um which which makes sense with like costs and you know things like that.

Um police did go up like uh almost three million dollars uh and then planning also went up a significant amount, which I understand to be the addition of the parks and rec program.

Um but can you explain a little bit where that significant increase for the police department came from?

Sure.

Um you're looking at actuals in 23 and 24, and we were very, very low on our on our staffing levels um during that time, and a lot of those positions have been filled, and uh we made some pretty significant wage adjustments I think last year to assist with our recruiting efforts.

So you're seeing numbers for a more fully staffed department.

Other assembly questions on our general fund sounds like we did good on that one.

John, thank you for bringing back a balanced budget.

Um I do appreciate the the legwork there.

Uh some of the decisions you made were not easy, um, and I think they would have been even harder to make at the table.

But it sounds like uh by consent that the assembly is supportive of the direction you went, and I know you did your research, you dug deep and you found uh where they could come out with the least amount of angst amongst the community uh because we do our community demands a very high level of service.

So I appreciate you digging back into that and uh reducing it another what 300,000 dollars on top of the I think 400 that we cut from the previous meeting uh with nothing else on item C then moving on to D.

Do we need to take public comment on item C and no motions have been made?

Can I make a motion to take public comment on item C it would be reduced uh it would be relaxing the rules or suspending the rules to allow for public comment?

May I mate so moved?

Sarah, that's not undebatable, is it uh Sarah on the motion?

And it does require a supermajority vote.

Uh Ms.

Yes.

Mayor Eisenbais?

Yes.

Ms.

Carlson.

Yes.

Mr.

Mosher?

Yes.

Mr.

Pike?

Yes.

Mr.

Christensen?

Yes.

And Mr.

Slain.

Yes.

Motion passes to suspend the rules.

So we'll open it up to public comment on the general fund at this point.

So any item within the general fund that the public would like to comment on now is your opportunity.

Three minutes per individual.

On the very bottom.

Perfect.

Okay.

There you are.

Thanks.

Is this where the field maintenance falls under the general fund?

Okay.

Correct.

If you and if you could state your name for the record.

Yes.

And you get the same thing.

Tatiana Perkins.

Good evening.

My name is Tatiana Perkins.

I'm a board member and coach for SICA Little League, SICA Softball Association, SICA Baseball Club, and SICA Fast Fed Softball Club.

Right now, our fields are not just heavily used, they are deteriorating.

We're dealing with poor drainage, sanding water that turns into swampy puddles, and sometimes spoil lakes.

Uneven playing surfaces in unsanitary conditions like dog waste in areas where kids are actively sliding and playing, also adults.

Even when pet owners clean up after their pet, residual waste always remains.

This isn't just inconvenient and it's unsafe.

We're not asking for luxury upgrades.

We are asking for safe functional fields that meet the basic standards our community deserves.

I understand that budget decisions are difficult.

It's your responsibility that is tied directly to public safety and the well-being of our kids and our community.

This goes far beyond sports.

These fields support youth development and active adults.

They give sick ins a safe place to be active, build confidence, and stay connected.

When fields aren't maintained, practices get canceled, games are disrupted, injury risk increased, and volunteers are overworked.

Our programs rely heavily on volunteers in a community like SICA.

Those volunteers are already limited.

When maintenance responsibilities shift onto volunteers, the burden grows quickly.

Over time it becomes unsustainable.

And when volunteers burn out and step away, we don't just lose help.

We lose the very people who make these programs possible.

So this isn't just about maintaining fields, it's about maintaining the people and systems that make these programs exist.

And here's the reality: cutting maintenance doesn't eliminate cost, it delays it.

The longer we wait, the worse conditions become and more expensive they are to fix later.

I want to offer a solution focused perspective.

While reviewing the budget, I notice that grant revenue appears minimal or zero.

That presents an opportunity.

Because if we can supplement funding through grants, we're not just maintaining what we have, we're expanding what's possible.

These fields matter, they matter to kids, they matter to the community, they matter to over 500 families that live here and that you represent.

They deserve to be treated as priority and not an afterthought.

I'm asking for you to reconsider the cuts and recognize that maintaining these fields is not a burden.

It's an investment in the safety, health, and future of Sitka.

I encourage the assembly to support Parks and Rec with partnering with all user groups to come up with a plan.

I also work for K Alaska, which is an excavating firm, and we have some solutions on the table if Parks and Rec Division is open to discussing that too.

Thank you.

Hi, um Steven Bennell.

I'm president of the SICA Softball Association, and uh just want to start off by thanking the Parks and Rec department for the work they continue to do, maintaining our fields.

Uh we recognize that the challenges that come with limited resources and difficult weather conditions that we experience here in uh SICA.

That said, we've identified an ongoing issue with the materials currently being used on our fields.

Based on feedback from local experts, including Tatiana Perkins, Josiah Hill, and the team at KE Alaska.

The materials being applied are not ideal for field performance.

In many cases, they're actually contributing to worsening field conditions rather than improving them.

Our require our request tonight is twofold.

First, we ask that the assembly sports parks and record recreation in reconsidering the use of these local materials for field maintenance.

We believe that continuing with the current approach will lead to an increased long-term cost and ongoing playability issues.

Second, we ask for support in encouraging parks and recreation to collaborate more closely with the user groups like our softball community as well as local professionals.

By working together, we can identify better solutions, including sourcing more appropriate materials and pursuing grant funding opportunities to offset costs.

We're not just raising concerns, we're also bringing forward solutions.

We have identified alternative materials that are better suited for field conditions in Southeast Alaska and are prepared to help explore funding options and partnerships to make these improvements feasible.

At the end of the day, we all share the same goal safe, playable, and sustainable fields for our community.

We're trying to make these fields safe for the kids and adults that are playing and trying to go to work the next day.

Thank you for your guys' time.

Hi, I'm Carrie Iwamoto.

I'm here also with Siga Softball Association.

And really just speaking on the whole the same subject.

I wanted to bring up that I we do realize that there are plans, these really grand plans, and they're gonna be great.

I think the facility, I believe it's um that they're working on with score is really nice, but it's five or ten years out in the future.

So the kids that are in little league right now are not going to be able to see these new facility.

Half of the people that are in the league right now, the adult league, are going to be retired by then.

So although that is great in the future, we really just need something that is going to get the kids through their little league career and the adults hopefully not injuring themselves and having to retire from the sport.

And so I just wanted to say I do realize that there is a lot going to that, but kicking it down, kind of kicking the can down two more years, three more years is it's really gonna be um it's not really an option if we want to keep safety front of mind.

Thanks.

Hi, my name is Katie Bennell, and I am a uh quasi representative of the Sika Softball Association as well, but I'm also invested in Little League, and I want to thank you for the opportunity to speak.

I'd also like to thank the existing efforts that the parks and recreation organization department has contributed to the fields and the maintenance, not just up at Kim Sham, but also at Mollar.

But today I want to speak specifically on my concerns about the Kim Sham sports complex as well as the detrimental impact of deferred maintenance or budget cuts would have to the facility.

To describe the conditions broadly, the fields could be recategorized as a recreational musk egg.

The fields have little to no drainage, which creates swamp-like conditions that are dangerous for players as their feet can get stuck in the mud as and result in injury.

Beyond that, the puddles and ponds that accumulate in both the infield and the outfield are breeding grounds for mosquitoes and other biological health hazards, particularly when the fields are used by dog owners as an off-leash play area, but that's a discussion for another day.

Most notably, the batter's box on the lower fields developed a hull from the field use, and it was patched using a piece of artificial turf very aptly, like a band-aid.

This is just a short list of the reasons why the Kim Cham complex is becoming increasingly undesirable for citizens to use for its intended purposes.

And it also helps explain the increased demand for the use of the molar sports complex, as it is the only safe and sanitary place for sports like softball, baseball, soccer, and more.

I don't want them to fall into the same deplorable state as the abandoned lot on Japanski.

The only way to avoid this is to preserve the funds for field maintenance and beyond that improve it by leveraging partnerships with community stakeholders and grant funds.

Thank you.

Anyone else this evening on the general fund budget?

I see none, we'll bring it back to the assembly.

Any further discussion on back to the general fund.

Do we have any further assembly comments after opening it up for public comment?

I just want to say that I appreciate everyone that came out to speak on that tonight, and I um very cognizant of the uh impact that these facilities have on you know retaining young families and um giving folks things to do.

Uh recreation is a super important part of our community and economy, I think as well.

I know that the softball season brings in a significant number of folks.

So I don't necessarily want to mess with this budget.

I know that the um team labored over it for a long time, but I would be interested in potentially uh entertaining a motion to you know support parks and rec and working closer with the user groups to explore some of these alternative solutions and um considering uh something later on if there's an opportunity um in in the mid-year supplemental or something like that.

Are you talking about basically us asking the staff to pursue grants?

Um yeah, yeah, like you know, lending lending some support to that idea um that stack can work with uh user groups and the commission, you know, and all of the the advocates that work very hard for recreation in our community.

Um if they uh think that they can find some opportunities there, I would I would love to see that.

You know, it's um it's the help of all of the volunteers that keep so many of these projects going in town, and so uh where staff can be supportive of that.

I I know that they probably already are, but if you know assembly um support is requested for staff to do that, I would be willing to to give that.

Um, and then just a flag that I would be willing to reconsider this um later on, depending on how our financials look um halfway through the year.

I know that's probably not ideal sand laying season, but uh I think that there was some good information presented about working with local businesses and um and staff to find a solution.

So I just wanted to express my support for that.

Is there a thing for up at Kim Sham because it's built on fly ash that they use loam or something so that it doesn't drain down in because you got a monitor for the dioxin that goes downhill?

So like could we get Mark up here?

Mark, could you come up and tell us what the city uses and then the KE people could you tell us what's a better plan?

Mark C V public works director and Connors up here as our main superintendent.

He probably knows more what we actually use.

So we did in the last budget cycle have a $50,000 uh appropriation to pursue uh a specific blend of athletic field sand for use in our area.

Um we didn't got in any bids back or proposals back for that, and they basically told us that we didn't have enough funding uh for essentially to cover their shipping, so that's why we saw that proposal basically increase five times to 250,000.

Yeah, um Con Dunlap uh maintenance superintendent.

Um just to yeah, to expound on the history of the facility uh construction was completed, I believe, in 2005.

Um it was built over the old landfill.

A lot of thought was put into the design of the drainage for the the entire site.

Um what we can determine, the main issue was that rather than seeding the field the fields, a pre-grown sod material was brought in.

So it was, I believe came from eastern Washington, quite a bit drier climate than we have here.

Um it was grown in a silty loam.

Um so essentially what we did is we built a super engineered drainage field, and then we put a silt cap over the top of it when we put the sod down on the outfields.

Um so those outfields do not drain, like it was said, they're kind of a muskeg probably grow cranberries out there.

We've had instances where we have taken equipment out onto the field to do some like exploratory investigation into why the drainage is so bad.

And when we used a backhoe to just scrape that top layer of the sod away, the field flushed like a toilet.

It was you could see the water spiraling down into the into the drainage field.

So long-term solution for that is a difficult one.

It would essentially be removing the entire sod out of the outfields and reapplying soil and reseeding would be the way to do it if we wanted to do grass.

We've also entertained the prospect of removing the entire sod and then converting them to sand fields.

But as was mentioned, there's also these kind of developing concepts for how to establish a more lasting uh complex for athletics up in that in that area of town.

So we kind of get stuck in this, like how much how much do we invest into developing these solutions for a problem if we may bulldoze the whole thing out and put a infrastructure, different infrastructure in there five to ten years.

As for the infields, the drainage is the drainage problem is not as bad as the outfield.

The issue is more of our um our uh crown has been deteriorated over the last 20 years of having the field.

Um so we have areas of where it's low where we get ponding and pooling.

That's that's common for an infield.

Um it's a clay sand mix, and that's if we had a crown, the water would shed.

Um re-establishing that crown has been pretty unsuccessful with our our drag attachment for our tractor.

Um then in addition to that, we have um 20 years of a couple, you know, half cup leave-in with people every time they come and play, leaves with their shoes and on their clothes.

Um, and after 20 years, we've just lost a lot of material, and so it's starting to get down to where there's very little sand on the infields.

Um, and if you if you drag or regrade that material very much, you're you're down into the bones and you're pulling up rocks.

And so um last year's attempt, as was mentioned by Mark, was to secure some sand with a pretty specific mix that we could add to those fields.

Um it didn't the the concept was to try to address Kim Sham complex, but also all of our other athletic facilities.

We have the lower track at Mollar, where we have the same issues occurring.

Um, the keep ball fields, um, and then to some extent the landry that has some material loss as well.

Um that RFP to get sand was unsuccessful.

We were essentially told we'd have a hard time getting a barge here for the that cost.

So we increased that in this year's budget, and now we're where we are today.

So the the reduction in the the sand that the the assembly went forward with that is not going to affect the amount of maintenance that you can try to do, correct?

So you you'll still go out there and attempt your normal amount of maintenance.

Yeah, our our general maintenance through the summer is we attempt to do a weekly drag of the field with our our equipment to redistribute that sand back onto the baselines.

Um we attempt to drop material back in the low areas.

Um what was referenced earlier with some of the the faulty material was I believe in 2022, kind of as a last ditch effort, we attempted to buy sand product in town and apply it to the fields, and that was um very unsuccessful.

It was a bad it was bad material to use on a field.

Um we attempted to fill some of those low spots and it it it just it did not so that's not everywhere or that's at Blatchley or that's Kim.

Sham.

Yeah.

What could you do with $30,000?

Not much.

You know, this is really a deep one.

If you guys ever want to see, I have all the eight by ten collar glossy photographs of the reform tort against the mill, and even the piling of all the fly ash that those baseball fields are built on, and then even the history of monitoring what comes from the drainage and why they made it so it wouldn't drain, I'm assuming, because they didn't want that anything busting through any of those bags of fly ash, which is a contaminated thing, because we used to be a mill town, and so uh there's gonna be a lot to that.

And I walk over the Blatchley field every day, and I know that that was built on a muskeg just so kids could have a place to play back in the login days, so that's gonna be complex thing doing that.

We're here to support you guys.

We want baseball, but this is the first time that I've really been aware that there's been an issue because I never go up there really.

So you guys have the 50,000 from last year, or did that go back into the general funding?

We still have that capital.

We have that.

So we could we could add 30.

So you'd have less than 100, but that's not anywhere near the 300,000 that you would have had.

I mean, if it's between nothing or 30, we would take the extra 30 and see what we could do.

I mean, there may be partnerships or work we could do with some of the local contractors to try to alleviate some of the pain.

So there'd be 80,000 total if I'm adding that up right with 1580.

Okay.

Okay, yeah.

Move to add $30,000 to the sand fund.

Is that the way that you were saying is that okay?

I second the spirit of it, but I don't know if that's I second the motion.

Could we put a pin in that for just a second?

I have a quick question before you is it okay?

Please.

So I was working with the last meeting we where that happened.

Um this strikes me as an infrastructure stinking fund project.

I mean, no, I looked at it, and if you look at exactly what the allowed use of that fund, it doesn't seem to me to fit.

Sorry, go ahead.

I'd rather do the sand than pave molar, but I think we're too deep into that one right now.

Would you like me to craft a more eloquent motion?

Okay.

Second that's been moved and seconded to increase uh the sand budget in public works by $30,000.

Is there any public comment?

Yeah.

Public works if we could allow for some public comment.

Those without two last names, please exit.

Thank you, Tatiana Perkins again.

Work for Kaney Alaska, and um I just want to get really specific on the material because I would hate to buy material that doesn't work for these fields.

And um, I'm not exactly sure on um what has been used in the past, but there is also material on Valange that that was placed last summer that I think it's the local sand.

All I know is that the material we have in Sitka locally will not work for the fields.

I think in theory it seems like an easy fix because it's here, you can buy it and you can place it, right?

But then it makes it worse because then it just holds the water and it becomes like a mud pie.

And when you put that on the field where you're trying to play baseball, and it's a wet, rainy rainforest.

Um, it just it doesn't work.

So I just want to be specific on the assembly support in not buying what we have in town right now because the material would only make the fields worse, not better.

And I am just I am Josiah Hill.

I did some research on the sand and baseball fields are clay, sand, and fine rock mixture.

Um clay is not ideal here because of the water that we have.

So we need a sand and fine rock mixture, and not round beach sand like they sell at ReadyMix.

Um, it is a triangular cut sand.

So it is a specialty item for baseball fields.

Um I am not sure that this is a permanent fix, but I think it is a temporary fix to prevent injury.

Um at some point, these fields are gonna start injuring kids and players.

And I would just not like to see that.

So that's all I have.

I also think that parks and rec should heavily rely on our communities.

Um being a SICA tribe member, I know that they alone qualify for community grants in the millions that could help.

And also working at Kaney, I've worked with Adam McLeod, our superintendent and Joe Williams, our general manager, and the owner of our company, Carrie Kenzie.

And they're all open to having discussions on donating equipment, donating operators to help.

I know I think parks and recs kind of scrape some of key or something, but we even are open to putting in like a French drain.

It's just very temporary.

It will help move the water off so it doesn't hold.

Um, I just think that the assembly should support Parks and Rec having a bigger open discussion with the broader community and that use the fields to come up with solutions because I think with 500 plus families being involved that use the fields, we can all come together.

I'm in the nonprofit world, I do grant writing, and then working in the earthwork business.

I think there's a lot of resources out there that won't cost the city money.

Thank you.

Anyone else on adding $30,000 to the sand budget for the fields?

Assembly discussion.

Yeah, I first of all, I'm sure Kevin is hearing this and the other people of Parks and Rec.

And um I'm not sure that doing this does anything.

I mean, we we don't have a proposal yet.

And and I'm hoping I don't think we don't need to have a motion to ask this parks and rec to work with the groups.

I mean, I think that that's uh I'm sure they would be doing that and be willing to look for other things.

And if they have a proposal where this 30k would make a difference, encourage them to come back for a supplemental.

Uh, but just doing it blind like this, at least from what I'm hearing, doesn't really necessarily help.

And and it may be, you know, but if we can get an actual, okay.

Here's here's an idea that the group was put together and working with parks and rec.

Yeah, then let's let's have something to vote on.

Thank you.

Uh thank you for your comments.

Thank you for public comments.

Appreciate it.

Um I kind of think uh it'd be okay to approve this 30,000.

I I don't see us as just saying, okay, here's 30 more grand, and then take the 50 from last year and just go buy a bunch of sand from a random place.

I see this as you know, taking this funds, asking, you know, obviously, we're not as the assembly, we're asking John uh as our employee to to work with Parks and Rec and Public Works to you know, kind of do some creative thinking uh within and without the community community partners to um kind of come up with some creative solutions like have been discussed.

Obviously, we that's not something where we would get into the details of, but I think there's um volunteers will and help.

Of course, some things to keep in mind too is when you have volunteers or insurance requirements and things like that that need to be considered and talked about and thought through.

Um, so it's not always quite as easy as we think, but I definitely want to think that we should have our uh eyes and ears open to any possibility of collaborating with community partners.

Um and I want to reiterate we're not just giving this direction to go do it, we're asking John.

I think John's hearing our discussion here and understanding that as he is nodding his head.

Um so I'm fully in support of this 30,000.

I think that's good, a good idea of just taking what's left over and JJ.

Uh good point in and identifying that 50,000 from last year, so it's really 80,000.

Um I'm in support.

Thank you.

Yeah, I just want to thank um everyone for coming with the solutions mindset.

I think that's really hard, and often we don't get to hear that, and so I'm I'm appreciative of that.

And uh I think that you know, 30,000 might not be so much, but 80,000 is uh significant amount to look to partner with.

So I definitely want to um you know flag this at the government to government meeting.

I would love to work with the tribe on uh looking for some you know joint ways to fund these important activities, and um altogether I think you know it's it's not the ideal, but we're here to make compromises, and this is a relatively small amount of money uh that we can add to hopefully create a much larger amount of money and um you know support these activities uh until we can get a better solution in place.

So just want to thank everyone for the collaborative spirit tonight.

And I'm I'm supporting it also because what I'm hearing is this uh crush sand, like you'd have to cut the crush sand with the inferior product that there's now because 30 grand isn't gonna go that far, and if mixing that all in would add more stability, and then people would learn from that, even if that was a waste.

And if mixing that all in would add more stability, and then people would learn from that, even if that was a waste.

I'm I'm good for having 500 families at least see us doing something for the traction and sliding into base.

I don't really know of the round beach sand and then putting in so much of the crushed uh you know sharp angled sand if that would make it more stable.

I don't know how it goes, but I could see it uh being a thought anyway.

I've been educated more on sand tonight than I ever thought uh would be possible.

It sounds like our public works team has that under control, so I appreciate that.

Uh yeah, I see this as a little bit of seed money for potential partnerships here.

It's also reassuring to me that we did not have that $50,000 spent last year.

So our public works teams understands that they will not be buying an inferior product.

Uh so I'm comfortable uh adding this money, knowing that the money as a whole will be gone to a correct and good purpose, uh, not a temporary patch that has been tried previously and does not work.

I also know that if a solution cannot be found at this money in the future budgets, they will come back, they will ask for more, and we'll be able to get it done.

It won't be just spent randomly.

Sound fund brook, can you please put that in as 502 101 slash sand fund?

I'm happy to add the word triangle cut to the sand fund if that needs to be a part of the motion.

Sarah, please.

Right on the motion to add $30,000 to the general fund budget for ball field sand, Mr.

Christensen.

Yes.

Ms.

Carlson, yes, Mr.

Selene?

Yes.

Mr.

Pike?

Yes.

Ms.

Riley, yes.

Mr.

Mosher?

Yes.

And Mayor Eisenbais.

Yes.

Motion passes 70.

Thank you.

Uh, anything else on item Cembly, or we're ready for a break?

That's a quick way to get us to the next item, isn't it?

I know a new trick.

Well, in an effort to get home before uh 10 30 this evening, I'd like to jump back into our agenda tonight.

Uh thank you, everybody.

Uh, I just wanted to make sure there's anything left on uh the general fund before we move on to the capital improvement plan this evening.

Katie I move to revert to FY26 funding levels for travel for assembly members to the Alaska Municipal League gathering.

Okay.

That's been moved and seconded to change the budget to 26 levels uh for Alaska Municipal League travel for assembly members.

Is there any public comment?

Katie, you want to talk about your motion?

Yeah, I just think that we, you know, we have a budget shortfall, and um, well, now we have a perfectly balanced budget.

I'd love to leave us with a little bit of a surplus.

Um, but I think uh, you know, we're all we're all being asked to make sacrifices right now, and while I believe that AML is uh a great experience, it was beneficial as a newly elected, and I want to make sure that that is still there for other newly electeds and our mayor.

Um I I don't think that it's necessarily appropriate for us to send all of the assembly members to AML at this point in time when we're having to consider these cuts in other spots.

So I want to ensure that that opportunity is still available for the newly elected in the mayor, but uh think that you know, in this time of kind of constrained revenues, um I'd like that it just remain those three.

Um can Katie, can you tell me what uh savings that will give us?

No.

Um we don't have a number.

The current amount budgeted is 20,000.

The uh amount per person that is about budgeted is essentially 2500 per person.

So I think it would be a savings of around 15,000, but we don't have the exact amounts.

However, the FY26 level was what was budgeted for three people.

So that's why I suggested to revert to that.

Okay.

I don't think it's in there.

I don't think that level of detail is in there.

It's not broken out, it's just under travel and training as as a whole.

Um we would just take whatever per person, it was time seven, we'd take it whatever the per person cost is and change it to to the three.

And can someone tell me, I'm kind of ambivalent about it, but um can someone tell me remind me or remind the assembly of how the why we moved changed and added the rest.

To include the entire assembly.

So if we're talking about adding, I I can speak to that because I was an advocate for when I returned from the the last annual AML, which is the only one we're talking about here.

Uh this assembly gets very little professional development as we go through our time here.

Uh and I see AML as a direct way to increase the assembly's efficiency and productivity.

Uh so I advocated for sending five of the assembly members.

I didn't think it needed to be all of them.

Um nothing against the two that are coming off.

Um, but with just a year left, I thought we could have got uh a good compromise there if we sent first year and second year assembly members um who still have uh a bit of time left on the body.

So that was uh something I advocated for.

Um it did come into the budget.

Uh John, I thought had John had cut it previously to make uh the budget e whole, um, but he said it was a little bit of a hot issue and he didn't want to touch it, left it up to us.

So I would continue to advocate to send five assembly members uh just due to the professional development that happens there.

Um this assembly receives you know, we we get a small stipend, um, but we don't get very many perks of the job um if that helps people you know make it through weeks where we have four meetings in the week um just to stay on and stay strong.

Uh I'm all about that.

But that's only the additive side, not the takeaway side.

Scotty and then Tor.

I I think it was a great program.

I was bummed I didn't go this time because I wanted to see how the Northwest Arctic borough was going to get along without the 850 million, or no, uh the 54 million dollars for 850 heat pumps that was gonna go to the Northwest Arctic borough, and just stuff from the presentation when I was there from Valdez's city planner, Seward City Planner doing avant-garde stuff, and I want you don't get a chance to get back and talk with these people because you're not, but you know, you can network there when you see them from the various seminars, and even with the you know, the the kelp farm down at Prince of Wales that uh you know absorbs uranium in the in the running downhill and they harvest the kelp and they get selenium and different stuff out of the water in the kelp, you know, avant-garde stuff that's happening, and it's it's worth going.

And just even just the housing thing alone of what Valdez did.

So it's been two years, you don't get to talk to those people except at that, and then everybody comes together and brings their own little there's just so many different educational things there about happening in the state, you know, and it's not really a political thing, it's just what's happening from trades to energy, uh it's a good thing.

Yeah.

Yeah, I a couple a few thoughts here.

Um and I said I wasn't gonna say this, but oh wait.

Uh the first of all, I I hadn't been for a few years until last year, and you know, uh professional development is a good way of saying it, but it also re-energizes you as an assembly person.

I mean, uh I think Scotty's definitely right.

The networking, you learn a lot of stuff, but it gets you excited again about doing things and ways to do things.

And there is a political aspect.

Sometimes we get to bend some legislators' ears and some folks from the federal government that are there to speak to us.

And I know that there's been money coming to Sitka that started at AML.

Um, and we uh we also will at times work up the grounds well to speak as a group to Juno to the legislature and and to a lesser extent the feds.

Um I think five people is appropriate because you wouldn't get all seven to go even if you wanted to.

Um but and then I said it earlier I said I wasn't gonna say this, but the budget is I mean we're we're right on the line now, but I'll guarantee you we're not gonna be later.

And the 15,000 isn't gonna make any difference either way.

Um it's like I guess I it is an estimate, and to me we're there, and I think we should keep it.

Um I said I wouldn't be surprised we don't get five people, but um we're not gonna make any difference in it.

It would be I understand why we the motion was made.

It's not the first time that's been done.

It was when I first got in the assembly 20-something years ago, everybody went.

And then for the same exactly the same reason we stopped doing that, and I think it hurt us, and it hurt.

Um, and so I would advocate keeping it in.

I totally understand why we want to do it.

It's but um I I don't see it as uh I I think the benefits outweigh the the uh moral victory of taking a little bit away from ourselves.

JJ The policy ideas and strategies you can gain from thinking um out loud with others in similar conditions is was really beneficial for me for the one time I went to AML when I was newly elected.

Um, you know, we have a lot of unique challenges in Sitka, but there's a lot of other Alaska community keys communities that really understand and can help help us through.

Um I talked a lot about housing when I was there um with people.

Um child care was another big topic, and hearing what other communities did um helped me understand some ideas to bring you know that right solution to sit good, not just copy and paste um, but to see you know why they did what they did uh and bring their their inputs into SICA to have us have our unique outputs.

Um you can just mix with people, like for instance, an assembly member from Whittier.

I was like, oh hey, we now you know do your dispatch.

How is that going for you?

And you can have kind of really frank conversation conversations with people and get good feedback.

And I found it to be a very valuable experience.

Um, and I knew it was tax dollars that was funding that trip, so I made sure to get the most out of that experience.

And I think others uh other people would would do the same.

So for my $2,500 that came to me for that, uh, I think we we got that much in advice for policy outcomes and the work that I I've done in three years.

Kevin, uh sure.

I would uh tend to agree with uh most of the comments here.

I think you know, sending five is a good compromise, and and like Tor said, even if we had all authorized, I don't think logistically every single person would be able to go just because schedules and things like that.

Um $2,500 is not really a lot in the big span of things.

I do agree about the um, you know, sometimes as an assembly person, you can feel uh you know, you're working with current members, you're working with uh the public.

Um sometimes it it is nice to talk to other elected representatives in other communities to kind of get some other ideas.

Um, so it helps you feel like you're not operating in a vacuum and trying to come up with solutions all on your own all the time.

I think that can be very beneficial to you know get to know other uh other people and see what they're doing and share ideas.

So I don't know.

I mean, logistically right now, it might be easier just to vote down this motion in my mind and just direct John to uh or the staff to schedule five members who were willing to go, but um I I think it's worth sending the members that desire to go.

Uh I don't think that like I I agree with Tor, even if we authorized all seven to go during the year just because of schedules.

I don't think that all seven would be able to go.

Uh Kevin, procedurally, so uh there is the funding for seven in the budget right now.

Um, if we need to change that, it would be by motion.

Uh, and I'm fearful of passing the responsibility of picking who doesn't get to go to an administrator.

I see what you say.

Are you all gonna make me amend my motion?

You could do it.

Um, I just I uh appreciate hearing uh the value that it's it's brought to others, and um, you know, if this body wants to vote to send five, I would be supportive of that.

Um my point was just that yes, it it is extremely beneficial, and I'm glad that we see that as a professional development opportunity for our assembly members, and I hope that everyone that has gone and continues to go uh really does you know make a meaningful experience of that because that is our our citizens' dollars at work that are paying for that.

Um I would also you know it's it's not the only chance that we have for um to to meet with others that are working at other municipalities and um always the opportunity to you know pick up the phone and continue those conversations, like that's also part of the the job and the professional development.

So it's uh you know, for me, I'm like, okay, I'll also be looking for more opportunities to invite those other perspectives into the room.

I definitely, you know, the ADU conversations that we're having were had up at AML and were shared over from Juno.

Um so yeah, I see those benefits.

I want to maintain that.

If someone wants to um make an amendment, I would um I would vote in affirmative for that.

I'll make an moment or amendment motion.

I moved to amend the motion to change it from um or to send five uh assembly members to AML uh during this budget session.

So with the motion on the floor, that doesn't really flow with it, does it?

Because we reverted it to a motion on the floor was to revert to the FY26 um budget level for the Alaska Municipal League.

Correct.

So we're talking about the conference.

So and that was three, which what was budgeted um for the assembly.

So then okay, okay.

So you're you're comfortable going from a dollar amount to a person amount.

Well, I inserted that for clarity for myself.

If you're comfortable with it, I am.

Yes, I am.

Okay.

Yes.

So if you wanted to make an amendment, you could change three to whatever you want to change it to.

Can you help me with that?

Yes.

I um so you would make an amendment to uh increase the number of assembly members for attendance at Alaska Municipal League from three to five.

So moved.

Yeah.

Second.

It's removed and seconded to increase the attendance at AML annual conference from three assembly members to five.

Is there any public comment?

Further assembly deliberation.

Sarah?

Okay, so um you're voting on the primary amendment right now, um, and that's changing the number from three to five members.

Mr.

Pike?

Yes.

Mr.

Mosher?

Yes.

Mayor Eisenbais?

Yes.

Mr.

Selene?

Yes.

Ms.

Carlson?

Yes.

Mr.

Christensen.

Yes.

And Ms.

Riley.

Yes.

Okay, the um amendment passes.

Now the main motion as amended uh to send five members to AML.

Right.

Correct, which it's currently budgeted for seven.

Uh so we'd be reducing that number by two discussion.

Sarah?

All right.

Um the motion to send five members to Alaska Municipal League uh conference.

Ms.

Carlson, yes.

Ms.

Riley, yes.

Mr.

Celine?

Yes.

Mr.

Mosher?

Yes.

Mayor Eisenbais.

Yes.

Mr.

Pike?

Yes.

And Mr.

Christensen.

Yes.

The motion passes seven zero as amended.

Uh thank you.

Anything else on the general fund this evening?

Item C.

No.

No.

Uh, that'll bring us to item D tonight.

Um, so this is gonna be a discussion direction decision of the fiscal year 27 uh capital improvement plan.

That says plan.

I go off this.

Uh John, you have an introduction here, and then Brooke, I'm sure we'll take it away.

We'll just have Brooke take it away with another very short presentation.

And then I'm probably gonna be calling Mark and Ron up here to help out as well.

And Connor.

Okay, I just have a couple of slides on this one, too.

The um main reason there's so few is because I did quite a robust presentation when we had the earlier meeting on the capital program.

So um there's a lot of uh helpful information on there.

I did not um think anyone would like me to repeat all those same slides.

So I kind of just did a summarized um version.

So included with um your draft budget packet was um an updated capital documents that make up the updated capital improvement program.

Um so uh projects are shown in two categories in our packets.

So the one category is approved capital appropriations, um, and those are presented with each fund's operating budget.

Right after their operating budgets.

Then the other category is the mid to long range for planned and unfunded projects.

So that's a separate document provided with the budget.

That big table that's four or five pages, five pages, I think.

But it's gonna and it's gonna be continued to be refined over time.

So our our CIP supports planning, not immediate construction.

It does include projects and design, phased or awaiting funding.

It is important to note that appropriations do not always result in immediate activity.

Projects might move through design funding and construction phases.

So staffing and workload, um, procurement, uh, grant opportunities and requirements.

And I talked a little bit about this, I believe, at the general the first general fund budget meeting.

About um we are are emphasizing trying to complete as many of our existing projects as as possible and closing out some of those old ones.

There, they're probably um at least on the general fund side, less uh capital appropriations than normal, ignore the school ones.

There's lots of projects on there, but that's different.

Um, but we intentionally did that to kind of focus on um what we could complete and and what we can close out as well.

So I don't think that I presented anything that was brand new compared to the first meeting, except that there wasn't a level of detail in the documentation.

So the thing that's a little bit different is I provided a packet, I don't remember what I called it, supporting documents that have like the project cover sheets and the resource proposals all in one place that list the scope and the funding sources and all of that.

So that was not included the first time that we talked about the the capital improvement um plan.

I realize that I interchangeably um use those words also.

I'm probably not supposed to.

Um but otherwise, there were a few changes made to the actual mid to long range plan.

This one since that first meeting, but but nothing too significant.

Thank you, Brooke.

Discussion on our capital improvement plan.

Is GPIP gonna be incorporated into this at some point?

I mean, it doesn't have to be this year, but at some point um to be shown as a fund with capital.

You always have a car a hard question.

Uh it's I think there's still a lot of decisions like we talked about earlier, a lot of policy decisions on what GPIP looks like, and I'm way oversimplifying this, but the intent with GPIP was to get the land out leased out, sold and then the infrastructure is absorbed into the city.

So it all depends on what the future of GPIP looks like.

Thank you.

Um I see a recall from charter that it's with the fiscal year that's being planned plus the future five.

With four years and then the long range.

I think that all kind of matches into what we're what we're trying to do to you know do that incremental improvements to get to our our charter requirements.

Um is there um what do you think are the categories, the funds that have the the most um need for building out the next year?

What are your next couple couple years?

Um, for which areas do you want to get kind of more robust understanding of the capital needs for I'm I'm not sure I have an answer for that.

It it's all gonna depend on what the what the risk matrix looks like as we score them out, and and it's not it's never a simple we're gonna take the top ten.

Um sometimes you have to be strategic in how you fund them, you know.

You know, if you if you know you can hit the top three, and then maybe you have some other dollars and hit something further down the list, but I I couldn't give you a clean answer without um without seeing where the risk assessment lies every year.

Thank you.

Um I can't tell I can tell you that the harbor fund needs a lot of work.

Um those numbers are quite old.

Um, and we have to look at more phased approaches to kind of navigate the new funding climate that we're in with that fund.

So we know I I've talked to Brandon, we know that needs a lot, um a lot of attention.

So I know at least on on my end that that's um higher up on the priority list to at least figure out what it is um that they need and how much those things cost in today's dollars.

Great, thank you.

Um I see a lot of coordination between water fund and we and wastewater um and electric, which really gets at um some of our goals here when that was added about overlapping with existing infrastructure to align efforts for improvement.

So that's that's really lovely to see.

Thank you for everyone who's contributed to this.

Um it's helpful, even though it's a spreadsheet, I kind of consider it a map to see where we're going.

And it with numbers kind of solidifies where where we're going to you know articulate aspects of the strategic plan.

Um it helps to also see how much we're funding at a time for things that we know are coming.

So Catley Ann Street, Lincoln Street, um improvements, uh kind of thinking that project was happening a little sooner, um, but the with the um not resource proposal, but the other sheet that's in there, um, that helps to kind of give that supplemental to understand why we're in the conditions that we are for the kind of longer term funding needs here.

Um so you can gain um a multitude of information just by you know your first pass and then your second and your third, and then connecting things and seeing why um you know one road has been in in deferred status for for 10 years because the those efforts, those infrastructure needs are being placed another one.

So it's a great document.

I'm not really a numbers person, uh more of a visual person, and so seeing it as a map and understanding why um things are being allocated the the way they are, being planned to be allocated the way they are uh is helpful to understand you know why isn't that project happening right now?

So I appreciate all of this effort.

It is a monumental task, but a great template to continue to move forward with as we take on and understand um that we are more alone in funding larger projects than we have been in the past with this with being a a town in Alaska.

Um so with that um comes more need for for planning in this long range way to be able to communicate with you know new assembly members and the community for why um why things are the way that they are.

I mean that's a very valuable tool.

Thank you.

Anything further on our capital improvement plan.

Okay, uh, with nothing else.

Um this would bring us to persons to be heard.

This is public participation for any item on or off tonight's agenda, not to exceed three minutes for any individual.

Okay.

Uh seeing none, we'll move to adjournment.

All those in favor say aye.

Aye.

Any opposed?

Uh thank you, staff who came out tonight.

It's uh I know it's a late night, but we appreciate you being here.