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Sitka assembly begins FY2026 capital-plan work; staff outlines funding limits and sinking fund status
Summary
City staff presented a preliminary capital plan and explained that approved appropriations include multi‑year, phased projects rather than cash-on-hand. The public infrastructure sinking fund held roughly $4 million after a FY25 transfer; staff warned inflation and scope creep will drive future funding requests.
City staff presented an early draft of the Sitka City and Borough capital plan and told the assembly on Tuesday that the approved appropriation listing does not necessarily represent money available for immediate construction.
"Approved capital appropriations include projects that have been authorized through the annual budget or through supplemental appropriations," Brooke (staff) said, adding that those listings can reflect multi‑year phasing, grant matches and projects still in design. She pointed the assembly to the interim FY2025 financial statements as the best way to see actual remaining funding.
The presentation also described the public infrastructure sinking fund, which staff said is restricted by municipal code for infrastructure repair and replacement. Brooke said a FY25 transfer of roughly $3.2 million was made into the sinking fund and that the current balance is a little over $4 million, while cautioning that some funds show negative balances because costs were incurred before reimbursements arrived.
Staff recommended using a conservative inflation guideline when planning multi‑year projects — citing about 15% annual inflation for planning five years out — and noted that design phases typically consume from 10% to 20% of project costs early on, rising to near‑construction drawings at about 95% completion.
Assembly members asked staff to provide clearer resource proposals when the budget packet is delivered so the assembly can see which requests are capital and which are operational. "If the assembly takes no action tonight, staff will continue developing the capital plan as part of the draft budget," Brooke said, noting multiple opportunities for assembly input.
The meeting closed with members asking staff to refine risk scores and to present options for prioritizing projects in the downtown corridor, with an RFQ planned to use a City Streets for All grant to guide multimodal design decisions.
Next steps: staff will provide resource proposal forms next month and update cost estimates for mid‑to‑long‑range projects as they are reviewed and prioritized.
