Skagway assembly hears draft FY26 budget showing about $3.4 million gap as departments press for staff and equipment

Manager Deach presented a draft FY26 municipal budget to the Skagway Municipality Assembly of the Whole on Oct. 14, saying the document is intentionally a working draft that lays out department requests and service levels before cuts are made. "I really wanted to go over what we've been putting together over the past few weeks, with department heads," Deach said, adding that the draft currently shows a deficit that "is going to need to change, and it will."

The manager framed the draft as more transparent than past budgets, with capital outlay for some larger equipment shown inside operating budgets so the assembly can see the full staffing and equipment picture. Deach highlighted building‑condition assessments for municipal facilities, a push for clearer staffing lines, and an emphasis on preventative maintenance to avoid larger replacement costs later.

Why it matters: the draft includes multiple new staff and equipment requests across departments while the municipality confronts a preliminary shortfall the manager estimated at about $3.4 million. Assembly members repeatedly asked for clarifications and suggested the draft will be pared back as port and capital project revenues and allocations are finalized.

Major departmental requests and details

Administration: Deach proposed reallocating some legal costs to the departments where they originate, adding an accounting position and funding an on‑the‑ground IT technician (contracted) to reduce reliance on remote IT services. Borough Treasurer Heather Rodig said the FY25 insurance shortfall will be covered by an upcoming budget amendment of about $900,000 to bring premiums in line with actual costs. "We have a budget amendment coming forward for about 900,000 to bring our '25 insurance to where it should be," Rodig said.

Recreation: Jason Verhaeg, director of the recreation center, explained that a prior single "jack‑of‑all‑trades" position will be broken into more specialized roles and short‑term contracts to better match seasonal work and technical skills. "Separating it into contracts ... disperses more money out into the community and gets specialists who are knowledgeable and passionate," Verhaeg said. The department also requested a part‑time attendant and listed capital outlay items such as a van and a mural.

Fire department: Chief Rauscher (introduced to the assembly) and Deach outlined safety and operational needs including replacement of a failing electronic door‑lock system, additional portable radios and pagers, and a proposed fire administrative manager to handle licensing, reporting, scheduling, grant administration and compliance so the chief can focus on operations. Training and equipment maintenance — from paramedic courses to SCBA replacement — were stressed as priorities.

Police and public safety: Sergeant Michaels and Deach described staffing shortfalls (three on duty now) and the plan to hire two police officers who are currently budgeted but vacant. Training for those hires (academy seats in Sitka) was estimated at about $35,000 for two recruits. The police requested replacements and backups for body cameras and listed capital items including a VirTra immersive training simulator budgeted at $170,000, a canine‑unit vehicle replacement, and potential acquisition of a thermal drone from Valdez Police Department for search and rescue use. Sergeant Michaels said that with five officers on staff "there would be little to 0 overtime" for routine coverage.

Communications/dispatch: The communications budget includes $115,000 in capital items, including a $20,000 dispatch simulator to keep emergency‑dispatch skills sharp year round, $40,000 for CCTV camera replacement, and $55,000 to replace a failing jail intercom and access system.

Public works and parks: Public works proposed a street sweeper in capital outlay estimated at $500,000, sign replacement and post upgrades, and continued collaboration with the Skagway Traditional Council on adding Tlingit language signs in high‑visibility corridors. Parks and recreation requested a sign‑making machine, a utility work truck, a dump trailer and an additional seasonal trail crew position.

Visitor services and CPV funds: Tourism Director Baker described a shift toward "destination management" to address congestion, visitor expectations and data collection; the visitor department proposed creating a part‑time year‑round visitor information specialist. Treasurer Rodig told the assembly the CPV (cruise passenger visitor) funding allocation is spread across general fund and enterprise budgets and that the full CPV budget will be presented with the capital budget; she said the municipality is expecting more than $6 million in CPV revenue overall.

Decisions and votes

Early in the meeting Assemblymember Potter moved to allow Assemblymember Henry to participate remotely; the motion passed on a roll‑call vote with five yes votes. At the end of the session Assemblymember Hillis moved to adjourn; that motion passed on a roll‑call vote with six yes votes.

What comes next

Deach said the draft will change as the assembly reviews port allocations, capital projects and other enterprise funds. Members repeatedly urged deeper line‑by‑line review to reduce the roughly $3.4 million gap and discussed options that could include a future sales‑tax change and budget amendments. The assembly did not adopt the budget at this meeting; members asked staff to return with more refined numbers and supporting detail for requested positions and capital items.