Juneau sets aside $4 million against a $12.9 million flood barrier loan

Juneau has set aside about $4 million toward repaying the state loan that paid for the HESCO flood barriers along the Mendenhall River, the wire-and-fabric baskets filled with sand and gravel. The debt runs to $12.9 million, so the reserve covers less than a third of it.

The Assembly approved the transfer Monday, moving the money out of the flood-improvements capital project and into a reserve account in the debt service fund. It came from general funds and restricted budget reserves.

The loan is from the Alaska Department of Environmental Conservation, which forgives half the principal once repayment begins. About $5.4 million of the borrowing authority is still unused, and staff expect to draw on it.

What the money bought is temporary. The city finished rebuilding and repairing the first phase in July under a $14.8 million budget, and with the second phase the system is designed for floods up to 63,500 cubic feet per second, roughly an 18-foot stage at Mendenhall Lake. A staff memo last month put Juneau's local share at about $9.6 million of the more than $20 million spent on the first phase and its reinforcement.

The Assembly also moved $500,000 into the Lands Fund the same night, to restore riverbank property after the barriers eventually come down, which a 2024 ordinance already required. Minutes have not been published, so vote counts are not available.

How Juneau pays for permanent protection is unsettled. The same memo says the Assembly could create a service area with its own mill rate, either limited to the protected properties or boroughwide.