Assembly reviews FY2027 budget assumptions; staff directed to pursue library talks and options to shore LEF
Loading...
Summary
Finance Director Charlene Thomas presented FY2027 budget assumptions (2% COLA, 10% health insurance increase, $400,000 added transient occupancy revenue); assembly discussed school district central-treasury liabilities, a $3.5M oil-spill appropriation awaiting insurance reimbursement, transit subsidy/CPV fund allocations and library funding; staff were given direction to negotiate with the city on the library contract and to include transient-occupancy revenue changes in the budget ordinance process.
Finance Director Charlene Thomas led a work session on the borough’s proposed FY2027 budget, laying out core assumptions: a 2% cost-of-living adjustment (COLA), a projected 10% increase in health-insurance premiums, an interfund-loan interest rate of 3.07%, no new positions, and an added $400,000 in transient-occupancy (cruise/visitor) revenue included in the baseline.
Thomas said the presentation intentionally used conservative revenue assumptions (2% growth on sales and transient occupancy) and that moving transit into a separate special-revenue fund produced a more accurate picture of the general fund’s net transit cost. She also noted the borough’s current accounting work with auditors to reflect the school district’s roughly $5.4 million central-treasury liability properly between funds.
Assembly members spent substantial time on three budget risks: (1) an ongoing oil-spill cleanup for which the borough has appropriated $3.5 million but expects insurance or contractor-carrier reimbursements (staff said $3.21M has been spent to date and invoices are under review), (2) the school district’s cash shortfall and how central-treasury liabilities are shown on borough books, and (3) the library fund shortfall following a recent reduction in the mill levy that may push the library fund to a negative balance unless revenues or contract terms change.
Transit Director Kai Reeve described a $102,109, three-year fleet-software contract (Samsara via Carahsoft) as a safety and liability-reduction measure that provides live feeds, diagnostics and in-vehicle coaching; the assembly approved that purchase later on the consent-transferred calendar after discussion. Thomas outlined CPV (cruise-passenger visitor) fund allocations and noted the fund is below the recommended one-year revenue reserve for some future requests.
Assembly directions and next steps: Members asked staff to pursue at least four follow-ups tied to budget structure and risk management: (1) initiate or resume negotiated discussions with the City of Ketchikan about library service costs and consider a temporary cap on the borough’s contribution or other contract adjustments (attorney noted the current agreement requires 180 days’ notice to renegotiate terms); (2) include a proposed ordinance option during budget adoption to redirect the additional transient-occupancy revenue (the ~ $400,000 from lifting an exemption) into the Local Emergency Fund (LEF) as part of the FY27 budget process; (3) HR and staff to return with wage/benefit pay-plan analysis (Gallagher review) intended to slow payroll-growth trajectory; and (4) continue neighborhood planning workshops and capital improvement planning as scheduled.
Why it matters: The FY2027 assumptions and the staff directions address near-term cash pressure, contingency planning for the school district and oil-spill reimbursements, and policy choices (library funding, LEF routing) that could alter next year’s tax and service mix. The assembly emphasized conservative budgeting while asking staff for targeted options to manage payroll and contractual costs.
What remains unresolved: Timing and amounts of insurance reimbursements for the oil-spill cleanup; final accounting for the $5.4M school central-treasury liability; and the specifics of any library contract adjustment or transient-occupancy revenue reallocation—all to be brought back for subsequent budget sessions.
