Juneau officials outline phased flood-mitigation choices, funding sources and buyout option for vulnerable neighborhoods

City Manager Kester told the Juneau City and Borough Assembly Committee of the Whole the purpose of the staff memo was to frame the decisions the assembly will face ahead of the 2026 flood season and to request policy guidance rather than votes.

Kester said the Phase 1 local improvement district (LID) project is complete from a construction standpoint but remains to be “put a bow on” through certification of the assessment rule, which would allow property owners to seek exemptions or adjustments. “You also have an opportunity to adjust the amount of that LID payment. It just can't be more than $6,300,” Kester said, referencing the maximum amount shown in earlier notices.

Kester noted the city received $880,000 in outside funding for Phase 1 (transcript wording: “Click it in Haida was able to bring $880,000”) and that the Alaska Department of Environmental Conservation (DEC) has offered a 50% forgivable loan for construction-eligible elements of that work. Kester said those outside funds could be used to offset general-fund expenditures or reduce property-owner assessments.

Nut graf: The assembly spent most of the session asking for more engineering detail, clearer cost estimates and legal options for dividing cost responsibility between residential and commercial property owners. Staff repeatedly cautioned that Phase 2 — which would require armoring — is much more expensive and needs better cost estimates before the assembly can make decisions about assessments, special tax districts, or other financing.

Phase 2 uncertainty and questions for staff

Kester described a rough order-of-magnitude cost estimate for Phase 2 armoring as about $17–19 million and said staff has not yet developed the detailed cost model the assembly will need. “We have not spent the time that we need to get you even better ballpark number, and that is an absolute number that you are gonna need before you make any decisions,” Kester said.

Staff framed the key choices as: what inundation level to design for (for example, 18 or 20 feet), how much of the riverbank to armor, whether assessments should use a methodology like Phase 1 or a different approach for commercial properties, and whether the city should create a special tax district or other financing mechanism.

Assembly members asked for:

- A clearer breakdown of residential versus commercial tax base and how assessment methodologies would differ; - A realistic timeline and procedural steps if a special-tax district and a special election would be required; and - More visualizations and science briefings (Kester proposed a special committee session with the scientists conducting the hydrology and risk work).

Kester said Congressman Begich had secured a $3.2 million appropriation request that could be directed to Phase 2 but that the funding was not yet final. Kester added the Army Corps of Engineers is engaged on longer-term solutions and is exploring whether armoring or HESCO barrier support would be eligible under Corps programs.

Recurring and maintenance costs

Kester stressed that LIDs are intended for capital projects, not for ongoing maintenance. “The city attorney has said that LIDs are a mechanism for capital projects, not for maintenance,” Kester said. The city did set aside roughly $500,000 for a property-restoration fund (for things such as removing a damaged deck and restoring a property), but dedicated maintenance budgets and staffing models remain unresolved. Kester suggested the assembly consider at least a part-time or 0.5 FTE engineering position focused year-round on flood matters.

Buyout option for Butte/View Drive

Kester said staff is working with the Natural Resources Conservation Service (NRCS) on a potential voluntary buyout program for the peninsula of homes on Butte (View) Drive and that NRCS will be invited to a special committee meeting tentatively scheduled for Oct. 13. Under current assumptions Kester described, NRCS would fund about 75% and the local share about 25%, but the precise program rules (including which parcels must participate for eligibility, how the purchase price is set, and whether a partner other than the city can provide the nonfederal share) remain to be determined by NRCS.

“I think an aerial image really helps show how difficult that is,” Kester said, describing the peninsula geometry and the need to consider demolition, conversion to parkland, and whether nonprofit partners could assume long-term ownership.

Assembly members pressed staff on how many homeowners want a buyout (Kester said two households had expressed clear interest so far), how NRCS sets purchase prices (staff described appraised value options and said the city and NRCS still needed to clarify whether the program uses pre-disaster or post-disaster appraisals), and whether a partial buyout could proceed if some neighbors decline participation (staff said eligibility rules are a question for NRCS).

Actions and direction

Mayor Weldon moved that staff be directed to prepare an ordinance to redirect $5,000,000 in matching funds for the Capitol Civic Center toward flood mitigation, with $1,000,000 allocated for maintenance and $4,000,000 for Phase 2 work. The mayor spoke in favor, saying the immediate flood need justified the reallocation. The chair stated “Any objections? Seeing none, that is so moved,” and staff recorded the motion as directed for ordinance development.

Discussion versus decision

Staff repeatedly emphasized this session was informational and about defining the additional data and analyses the assembly needs. Formal decisions were limited to directing staff to draft ordinances and return with more detailed cost, timeline and legal analyses. Kester listed a number of specific homework items for staff, including: refined Phase 2 cost estimates, assessment-methodology options that separate residential and commercial contributions, timelines for special-election processes if a special tax district is considered, and NRCS participation details for a buyout program.

Ending: next steps

Kester said she would bring additional detail back to the assembly, including maps, visualizations, and technical briefings from consultants and federal partners. The assembly asked staff to schedule a special committee meeting focused on flood science and buyouts and asked for more detailed financial scenarios, including potential implications of the borough’s 12-mill cap on property-tax–based service-area financing.