Finance committee recommends FY25 budget amendment after clinic’s $1.07M supplemental request; manager previews 11% FY26 increase

The Skagway Municipality Finance Committee voted to recommend an ordinance amending the FY25 budget to the full assembly after hearing a request from the municipal clinic for $1,071,394 to cover overspent FY25 costs.

Director Wall (the clinic director in the record) told the committee the supplemental request reflects months of higher patient volumes — including urgent-care increases of 96% in July and, by Director Wall’s figures, up to 285% in September and 236% in October compared with the prior year — plus costs for added providers, aging equipment and pharmacy contracting. He said the clinic purchased a portable and suite X‑ray replacement under a federal grant (noted near $400,000), carried extra providers through a high-volume summer, and moved toward hiring permanent, benefited municipal providers to improve continuity of care.

Manager Dietz said many items in the FY25 amendment are bookkeeping to reflect previously approved assembly actions, but flagged several larger changes: a substantial insurance cost increase (Dietz described overall property-insurance allocations rising sharply and cited department reallocations), incorporation of clinic adjustments into FY25, and capital outlay that appears in operating budgets. Dietz warned that adopting the FY25 amendment before the FY26 second reading will change FY26 draft numbers and recommended presenting an updated FY26 document that reflects the amendment if adopted.

Committee members questioned whether the clinic’s staffing and revenue changes were included in the FY26 draft. Director Wall said he had attempted “truth in budgeting” and factored staffing changes into FY26 by moving to four provider teams (two permanent municipal employees and two locum teams) on 12‑hour shifts to reduce overtime and improve continuity. He also said the clinic has pursued higher state reimbursement under the APM (alternative payment methodology) and recently completed enrollment with Cardinal (a wholesale contractor) for pharmacy reimbursement, though timing delays reduced expected FY25 revenue.

Committee discussion noted the FY26 draft shows a roughly 11.3% increase in general-fund expenditures driven by salary/benefit adjustments, insurance increases, capital outlay and several departmental requests. Dietz reported projected sales-tax reserves of about $11.9 million and CPV reserves of about $1.8 million and reminded the committee of a code requirement to keep roughly 50% of the operating general fund in reserves (about $6.75 million). The manager also described large planned capital projects in FY26, including an incinerator replacement and wastewater treatment upgrades, and said the FY26 draft anticipates transferring $10 million from the port fund to capital projects.

Assembly member Burnham moved that the finance committee recommend the FY25 ordinance amending revenues and expenditures to the assembly for approval; Assembly member Henry seconded, and the committee approved the recommendation by voice vote. The ordinance will appear on the assembly agenda for consideration; final adoption and exact FY26 figures will be determined by the assembly at first and second readings.

The committee asked staff to provide a version of the FY26 draft that reflects the FY25 amendment if the assembly adopts the ordinance, so the public and assembly have consistent numbers going into budget adoption.