Kodiak Island Borough adopts FY2026 budget, sets area-wide mill rate at 8.91

The Kodiak Island Borough Assembly approved a balanced fiscal year 2026 budget and set the area-wide mill levy at 8.91 mills after extended debate over funding priorities and the borough's maximum allowable property tax revenue ("MAPTR"). The final package included a substitution amendment to the introduced budget and targeted increases for nonprofit grants.

The budget ordinance (FY2026-01) was introduced, amended by substitution and then amended on the floor before passage. Borough Manager Amy Williams described the ordinance as the borough's annual budget and said it was presented as a balanced budget: "The fiscal year 2026 borough budget is offered as a balanced budget, meaning that proposed expenditures do not exceed anticipated revenues and planned use to fund balance." Williams said staff provided level 2 and level 3 updates to the assembly during packet review and noted changes to the solid waste fund and other line items were reflected in updated summary sheets.

Why it matters: Assembly members repeatedly flagged looming fiscal pressures including rising operating costs, uncertainty in state school funding and the borough's tax-cap constraints. Assemblymember Beau (referred to as Bo in proceedings) warned that "our current spending trajectory is not gonna be sustainable in the coming years" and urged early planning. Manager Williams and the finance director explained how different mill-rate scenarios would affect the facilities maintenance fund and compliance with MAPTR, the borough's limit on year-to-year tax revenue growth.

Key facts and votes - The assembly approved an amendment by substitution to the budget ordinance; the motion passed unanimously (5-0). Roll call on the final budget (as amended) recorded: Whiteside ' yes; Ames ' yes; Griffin ' yes; LeDoux ' yes; Sherritt ' yes. Outcome: approved. - The assembly separately adopted the tax levy ordinance (FY2026-02) to set the area-wide mill rate at 8.91 mills for tax year 2025. That amendment (to place 8.91 mills in section 2) and the main motion as amended both passed by roll call 5-0.

What the mill rate change does: Finance staff presented three mill-rate scenarios in the packet, ranging from 8.89 to 9.25. Manager Williams explained those scenarios primarily change how much is deposited to the borough's facilities maintenance fund (Fund 469). At 9.25 mills the schedule would have funded approximately $537,925 to facilities maintenance; at 9.08 mills the facilities allocation would be about $212,925; at 8.89 mills staff showed no transfer to the facilities fund and a $150,000 reduction in parks and recreation contracted services/equipment to reach that rate. Williams said maintaining MAPTR in full requires a mill rate at or above the assembly's 9.08 threshold; anything below 9.08 would not fully maintain MAPTR.

Assembly debate - Assemblymember Beau urged early planning, saying the borough should not wait until a crisis. "We need to be proactive," he said. - Assemblymember LeDoux emphasized the risk to schools: "If we don't fund it, then it will restrict what we can collect in taxes next year... So I think that's a very, very dangerous thing to do for the future of quality schools in Kodiak." - Assemblymember Ryan and others pushed for tax relief for residents. Ryan moved an amendment for an 8.89 mill rate (which would remove $150,000 from parks and leave no facilities transfer); that motion led to additional negotiating and a short recess. Following the recess, the assembly agreed to an amended compromise of 8.91 mills and approved a separate small reallocation (a $30,000 transfer) to restore nonprofit funding lines.

Line-item adjustments: The assembly amended the budget to increase two nonprofit funding lines (health & social services and education/culture/recreation) from $85,000 to $100,000 each and adjusted the Parks & Recreation line to reflect the negotiated mill rate impacts. Finance staff confirmed the school district's requested increase (an aggregate figure presented earlier in packet review) remained funded under the adopted budget.

Process and next steps: Manager Williams said both the budget ordinance and the tax-levy ordinance were required steps: the borough must adopt a budget and then levy taxes to fund it. She reminded the assembly that MAPTR calculations and certified assessed values will affect future years and that next year's negotiations, including union negotiations and uncertain state education funding, could require further fiscal decisions.

Ending: The assembly approved the FY2026 budget package and the area-wide mill rate at 8.91 mills. Members and staff said they expect continued work on multi-year planning and encouraged early discussion of longer-term fiscal options.