Finance committee recommends Assembly amend ordinance to cover $1.68M clinic supplemental, adds IT contractor to FY26 budget

The Skagway Municipality Finance Committee on Dec. 3 recommended the Assembly amend ordinance 25-14 to incorporate a revised package of FY25 amendments that includes an updated request of about $1.68 million for the municipal clinic and related changes to capital and reserve accounts.

Borough Manager Deetsch told the committee the municipality had prepared two linked ordinances — one establishing the FY26 budget and a second amending FY25 — and that recent adjustments required attention because they affect 2026 starting balances. Manager Deetsch explained a proposed funding split for the clinic supplemental, based on a proposal from an assembly member, of 68% from CPV funds and 32% from sales tax, and she showed back-of-envelope calculations indicating CPV reserves would fall to roughly $1 million under that scenario.

Director Ball, who prepared a memo on the clinic finances, told the panel the updated supplemental reflected an error in his original projections. "When I did the original projections, I missed 1 payroll period," Ball said. "My numbers were low." He said that permanent hires made this year — including a physician and a dental hygienist with benefits — contributed to the higher spending that led to the supplemental request. Ball described the supplemental as the result of those staffing and operating costs and said he expects next year’s budget to be more stable once recent rate adjustments and contracts take effect.

Ball also outlined revenue-side issues. He said the clinic’s Medicaid payer mix is about 20%, lower than many centers, and that the clinic had received a Medicaid rate increase this summer that should help revenue going forward. He cautioned, however, that changes to federal or state funding formulas could materially affect the clinic’s prospective payment rates. "If they cut the base, it'll hurt a lot," Ball said, adding that the clinic has pursued a wholesale contract to reduce supply and pharmaceutical costs.

Manager Deetsch reviewed other FY25 amendment items that were bundled into the proposal, including removing a previously budgeted $1.5 million wave-barrier CIP line after a favorable condition assessment, and shifting $50,000 into a port office remodel. She explained how those edits interact with the clinic supplemental and with the municipality’s CPV and sales-tax balances.

The committee also discussed adding a dedicated IT contractor to the FY26 budget. Deetsch said the municipality currently relies on a contract with Alaska Technical Services (ATS) and on staff who have absorbed IT duties, and that the new contract position would act as a cybersecurity officer and on-site liaison to implement recently adopted policies, manage devices and licenses, provide troubleshooting and staff training, and coordinate escalations to ATS. "We need someone to act as a cybersecurity officer," Deetsch said, and later explained the compensation estimate: "Dollars 32 an hour, so with taxes and everything, it comes out to the 54,000 a year." The position was proposed as a contract role (about 30 hours per week) without benefits.

After discussion about funding splits and timing — members considered either a two-step amendment or a single amendment capturing all changes via a consolidated table — the chair moved that the Finance Committee recommend the Assembly amend ordinance 25-14 as proposed in Table 2 (the consolidated package). That motion was seconded and the committee voted in favor with all members saying "aye."

What happens next: The Finance Committee’s recommendation will be forwarded to the full Assembly for consideration under ordinance 25-14. The Assembly will consider the recommended funding split, the clinic supplemental, and the proposed FY26 IT contractor as part of its ordinance deliberations.

Clarifications: The committee’s recommendation does not itself appropriate funds; it is a recommendation to the Assembly. The committee discussed figures for CPV and sales-tax impacts (manager’s presentation estimated CPV reserves falling by roughly $400,000 and sales-tax reserves by roughly $220,000 under the scenario discussed), and Director Ball said the supplemental resulted from a projection error that omitted a payroll period. The exact final allocations and any further amendments will be set by the Assembly when it considers ordinance 25-14.