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Sitka Assembly moves FY27 draft toward finalization; water, wastewater, harbor and airport funds highlighted
Summary
At a special meeting April 23 the Sitka Assembly reviewed FY27 enterprise and general fund proposals: the draft includes a 6% water rate increase, a 2% wastewater rate, proposed 4% harbor increase, airport projected $390,000 operating gap and a frozen port director post; the Assembly approved a $30,000 sand supplement and limited AML attendance to five members.
The Sitka Assembly spent the bulk of its April 23 special meeting reviewing components of the fiscal year 2027 draft budget, including enterprise funds, internal service funds, special revenue funds and the general fund. Staff presented proposed rate adjustments, capital needs and several funding and staffing decisions the Assembly adopted or directed staff to pursue.
Brooke, the staff presenter for the packet, framed working capital as a planning buffer that is not identical to cash and explained that the electric fund draft includes a customer fee increase (no energy rate increase) that will raise a typical residential bill by less than $1 a month and that about $700,000 in planned projects were deferred under current rates. On water, Brooke said the draft includes a 6% rate increase—"about $4 a month for your typical residential customer"—to cover anticipated debt service tied to a critical secondary water project expected to add roughly $1,000,000 in annual debt service beginning in FY27. On wastewater Brooke said the draft includes a 2% rate adjustment and capital appropriations to meet a required effluent disinfection standard by 2030; staff said they are pursuing a State Revolving Fund loan through Alaska DEC and hope to secure loan-forgiveness components but cautioned the city cannot always count federal funds as the local match.
Mark Sevey, public works director, told the Assembly staff aims to finalize loan and grant paperwork within about six months and that the final design for the effluent project is coming in around $1.1 million. "Our goal is to try and have that ironed out in the next 6 months or so," he said.
Harbor funding pressures were a recurring theme: the draft includes a 4% harbor rate adjustment that staff said aligns with a 2024 harbor rate study; the Ports and Harbors Commission recommended 3% and proposed studying revenue options (reallocating portions of the fish-box tax distribution, expanded fee areas and anchoring/mooring fees) to make up the remainder. Brandon Calhoun, harbor master, described ideas like creating designated mooring areas and serviceable moorage as part of possible revenue plans.
The airport fund showed a projected FY27 operating gap of about $390,000, driven by the terminal project’s larger footprint, higher utilities and operating costs and reduced aeronautical revenue after Delta’s departure. Staff said bond and PFC proceeds are restricted and that short- and mid-term solutions could include paid parking, additional lease revenues, or general fund support.
On the general fund draft, staff said negotiated health insurance costs lowered projected expenses, and the budget now projects a modest $30,000 surplus after changes including freezing (not eliminating) a police sergeant position for FY27. Chief Mike Hall said holding the sergeant position is achievable while the department focuses on patrol staffing.
The Assembly took three concrete votes tied to the budget discussion: it suspended the rules to take public comment on the general fund, it approved adding $30,000 to the Public Works sand fund for athletic fields (7-0), and it amended and approved reverting Assembly travel funding for the Alaska Municipal League to FY26 levels effectively limiting attendance to five members (approved 7-0 after amendment). During public comment, several community members urged more funding and coordination to address field drainage and safety; staff described past procurement attempts for a specialized "triangle-cut" field sand mix and the difficulty of shipping and sourcing suitable materials.
The Assembly and staff agreed to continue work on grant and loan packaging for wastewater disinfection, to prioritize harbor project scoping and cost updates, and to return with details on lease and capital proposals as they are refined.
The meeting did not finalize an omnibus ordinance; staff will incorporate the Assembly’s directions and return with revised materials prior to the second reading.
