Assembly approves first readings of FY26 budgets; debate centers on capital improvement program and utility rate increases

The Sitka City and Borough Assembly held extended debate April 8 before approving first readings for its fiscal-year 2026 budget ordinances. The Assembly approved the general-fund ordinance on first reading by a 4-1 vote and the enterprise-fund ordinance on first reading by a 5-0 vote.

Finance director Brooke Falskank, in her second week on the job, acknowledged much of the work was completed by staff and offered to answer questions as they arise. Falskank told the Assembly that the long-term capital plan is required by the charter to inform the public of foreseeable needs but does not itself appropriate funds; this year's ordinance adopts the annual budget and the CIP as the public-facing plan.

Assembly member Janet Carlson (identified in the record as Miss Carlson) said she could not support the combined ordinance on first reading because the capital improvement plan did not adequately present an estimated $30 million in scoped school facilities needs she had observed in prior reviews. Carlson moved to strike references to the capital improvement plan from the ordinance but the motion failed for lack of a second; she subsequently voted no on the general-fund ordinance on first reading.

Several other Assembly members and staff responded that the budget contains the fiscal-year appropriations for the schools (about $1.9 million in the coming year in the packet) and that the larger long-range need figures are part of the multi-year plan. Brooke Falskank and other staff emphasized that the five-year plan is informational and does not commit appropriations beyond the current fiscal year.

Public comment included two residents who urged Assembly members to reconsider large fee and rate increases. Valerie Nelson told the Assembly she opposed the budget, citing rising utility rates and an increase in city staff positions and salary expenditures. Austin Cranford warned that higher utility and harbor fees could strain fishery-dependent businesses and residents on fixed incomes.

Assembly members said they were reluctant but felt constrained by the need to pass a balanced budget and fund rising infrastructure and operations costs. Assembly member Kevin Mosher, who supported the ordinances, said the community faces rising costs to repair aging infrastructure and that the city is pursuing grants and efficiencies to limit rate pressure. Other Assembly members echoed that utility rate increases are undesirable but necessary to meet federal mandates and to fund major capital projects such as wastewater sterilization and harbor work.

Votes and key motions recorded at the meeting on April 8:

- Ordinance 2025-07 (adopting budgets and capital improvement plan for the general fund, internal service funds and special revenue funds) — first reading: passed 4-1 (Miss Carlson voted no).

- Ordinance 2025-08 (adopting the enterprise-fund budget and capital improvement plan; amending Title 15 utility rates and harbor fees) — first reading: passed 5-0.

Brooke Falskank and city staff said they will continue to refine CIP presentation and staff will incorporate school-facility items into the capital documents for future review. The ordinances will return for second readings at future meetings per the Assembly schedule.