Ketchikan Gateway Borough adopts FY2026 budget after corrections to fund balances and elimination of software engineer position

The Ketchikan Gateway Borough Assembly on June 16 adopted Ordinance 2070 (amended), approving the boroughFY2026 budget (all funds except the Local Education Fund) after a staff presentation that corrected fund-balance figures and the Assemblyelimination of one proposed software engineer position.

Assistant Borough Manager Cynna Smith told the Assembly that the budget as amended uses general fund reserves to balance the year and to complete pending capital projects. She said staff now estimates the FY2026 ending general fund balance is higher than shown in the printed budget book, and that the "available fund balance is $5,231,856," about $2.4 million more than the budget book showed. Smith described roughly $1,187,391 of the reserves covering an operational deficit and the remainder to finish capital projects, and she told members the specific numbers and reconciliation are in the budget supplement attached to the agenda packet.

The Assemblyvote followed three public hearings and a staff explanation of technical corrections to multiple fund statements in the budget book. Smith said finance staff will revise the published budget book to reflect the Assembly's amendments, reconcile FY2024 actuals to the audited statements and correct errors in fund roll-forwards and estimates before a final budget book is published. She also explained that Local Education Fund issues (including uncertainty about Secure Rural Schools and state vetoes to school funding) will require separate LEF work-session discussion in July.

Discussion in the meeting touched on the elimination of one software engineer position (a $177,336 reduction the Assembly adopted at an earlier hearing) and on whether recent lower-than-expected sales-tax receipts would change FY2025 actuals; Smith said the $300,000 lower Q3 sales-tax figure affects FY2025 actuals and that staff will not change revenue estimates for FY2026 unless they are certain of a continuing shortfall.

No members of the public offered comment at the FY2026 budget hearing. Acting Vice Mayor Palmer moved to adopt Ordinance 2070 amended; the motion was seconded by Assemblymember Bailey and carried on roll call (6 yes, 0 no, 1 absent). The Assembly directed staff to publish a revised budget book within 30 days and scheduled a Local Education Fund work session to consider LEF-specific revenue/expenditure policy and potential transient-occupancy-tax options.

The ordinance and the staff supplement noted other bookkeeping corrections that do not change the FY2026 appropriations as adopted but will change how beginning and ending balances are displayed in the final published budget book.

Moving forward, the Assembly and staff said they will hold an LEF work session in July to examine options for stabilizing education funding and to consider transient occupancy tax exclusions for the city as part of that review.

Votes at a glance

- Ordinance 2070 (amended), FY2026 borough budget (excluding Local Education Fund): Moved by Acting Vice Mayor Palmer; seconded by Assemblymember Bailey; outcome: adopted (roll call: Arntzen Yes; Bowling Yes; Otis Yes; Bailey Yes; Matson Yes; Ulmer Yes; 1 absent).