Regular City Council Meeting

This meeting is being transcribed and summarized. I'd like to call this regular City Council meeting of May 21st to order. Would you please call the roll? Finnegan. Here.

Gass. Here. Bradbury. Here. Matani.

Here. Zingy. Here. Kuz. Here.

Gage. Here. Thank you. Would you please rise for the Pledge of Allegiance? Can I get somebody from the Legion to lead us, please?

Uh-huh.

We pledge allegiance to the flag of the United States of America And to the Republic for which it stands, one nation under God, indivisible, with liberty and justice for all. Thank you. The Ketchikan City Council would like to respectfully acknowledge the traditional first people of this land in Ketchikan, the Tongass Tlingit people. So under communications, uh, we'll start. We have a mayoral proclamation in regards to National Reading Month, and I'm going to ask Councilmember Can you please read that?

Thank you, Your Honor. Whereas during the month of May, radio stations throughout the nation will celebrate National Radio Month, and whereas this celebration provides an opportunity to recognize the vital role radio continues to play in the daily life of communities across America, including here in Ketchikan, and whereas radio remains one of the most accessible and immediate forms of communication, providing news, public safety information, education, entertainment, emergency alerts, and community connection to listeners of all ages, And whereas local radio stations serve as trusted sources of information during severe weather events, emergencies, elections, and other important community developments, particularly in Southeast Alaska, where reliable communication is essential. And whereas noncommercial and public radio stations make invaluable contributions through civic engagement, cultural programming, educational outreach, and coverage of local government and public affairs. And whereas 2026 marks the 50th anniversary of KRBD Community Radio, celebrating 5 decades of trusted local broadcasting, public service, cultural programming, and civic engagement in Ketchikan and Southeast Alaska through local news, public affairs programming, government meeting coverage, school board broadcasts, election forums, music, and community storytelling; and whereas KRBD continues to earn statewide recognition for excellence in journalism and community service, including multiple honors from the Alaska Press Club; and whereas KTKN has served Ketchikan for more than 80 years and continues to connect residents through local programming, including First City Forum, coverage of local school sports and community-centered broadcasting, while sister station KGTW provides contemporary country music programming for the region. And whereas KFMJ has served the community for more than 30 years through local broadcasting, live coverage of high school athletics, and award-winning radio programming recognized by Alaska Broadcasters Association.

And whereas the city of Ketchikan recognizes the many broadcasters, journalists, engineers, volunteers, and staff members whose work helps strengthen community life through local radio. Now, therefore, be it resolved that Mayor Robert Siebertson of the City of Ketchikan, Alaska does hereby proclaim the month of May as National Radio Month and encourages listeners to support their local radio stations and the services they provide both locally and nationally. Is there anybody here to receive that? Yeah, I'll receive that. All right, perfect.

Thank you. Thank you. Thank you.

We have another lay on the table, and this is Lot 3F. It's about the Alaska Police Standards training that was held here. It was a letter that I thought should be noticed and read. So it says, good morning, Mayor Stevenson. My name is CJ Smith, and I'm the Alaska Standards Council training coordinator for the state of Alaska.

Our team traveled to Ketchikan on May 10th to conduct the methods and instruction course from May 11th through May 15th. I felt it was important to reach out and express our sincere appreciation, appreciation for the outstanding staff employed by the City of Ketchikan. The level of professionalism demonstrated by the Ketchikan Police Department and the Ted Ferry Civic Center was truly exceptional and among the best experiences I've had while facilitating training throughout the state. Deputy Chief Derek McGarrigan and Vanessa Booth displayed an incredible level of professional coordination and teamwork that made it possible for us to successfully bring this training to a more remote region, uh, with ease. The time and effort they invested in ensuring everything was prepared in advance made a tremendous difference and allowed the seamless transition upon our arrival.

Deputy Chief McGarrigan took the time to personally meet us, was it, was it at 6:30 in the evening? Upon arrival, escorted us to the temporary safe center, remained there until we ensured everything was set up exactly as needed. He truly went above and beyond to ensure that we were positioned for success. Vanessa coordinated, coordinated, uh, required pre-course materials and requirements, ensured all were prepared and attended completed the pre-course materials prior to the training. Their support was vital to the success of this course, and we greatly appreciate everything your team did for the Southeast Region.

I would also like to recognize the professionalism of the officers who attended the course. The fact that many of them were balancing training responsibilities with continuing to work shifts to keep the community safe was truly impressive. Uh, until the end of the week, we had no idea we were managing both responsibilities simultaneously. Their focus, professionalism, and commitment never varied, which speaks volumes for their dedication and the culture that both you and the chief have built within the department. When it comes to the Ted Perry Civic Center, I cannot say enough about Alice and her team.

This is one of the most accommodating, beautiful, and professional venues I have had the privilege to teach in. We are incredibly grateful for the opportunity to utilize such a wonderful facility. From large logistical needs to small details such as assisting with printing, Alice and her team ensured that we had everything necessary for successful delivery of the course. Their hospitality and willingness to assist did not go unnoticed, and thank you heart feltly feels sufficient for the level of support that they provided. We are currently working with regions throughout Alaska to help develop training hubs that better serve law enforcement agencies across the state.

Deputy Chief McGarrigan expressed interest in hosting additional training in the future, and we are currently developing a statewide field training office program that we hope to facilitate across Alaska. The experience we've had working with the Ketchikan Police Department and the Temporary Center has absolutely made us interested in returning for future training opportunities. We'd also like to give a special shout out to Officer Sam Jenkins for being named Dolly Tutorian of the Methods and Instruction Course. He has a very bright future and training, and we would be more than happy to support him along with others in future instruction and development opportunities. Thank you again for your professionalism, hospitality, and support demonstrated by your staff and the community.

I would truly appreciate it did not go unnoticed. If you have any questions or need assistance, please feel free to reach out. Thank you. So that's just in recognition of some of the stuff that goes on behind the scenes in regards to the work that our staff, not only in Police Department, Ted Perry, but across the curriculum does. So I appreciate that.

Um, we also have, um, a lay on the table, which is the update to the redundant IT supply and support stuff, uh, with a correction and update to the assignment of Thailand leases. And I think there was a withdrawal of item 7B in order to, uh, bring it back in that resolution and ask at a later date. And of course we have a calendar.

There were some updates on the—. For the HVAC. Yeah, there were some updates, uh, in regards to the HVAC project that we're going to do here at the, the building, and there was some information that was provided in regard to cost savings analysts in regards to this project. We certainly appreciate that. So with that, we come to persons to be heard.

Do we— who do we have to speak to us? Our first speaker is James Lentschmidt.

You might have to turn that on. I put new batteries in, but It's the bottom. Yeah, just test. Is that better? I think so.

It takes a minute. We need a freaking better way.

It should have a little light on the side. There you go. There you go.

Uh, greetings, good evening. My name is James Kleinschmidt. I live at 633 Canyon Road. I was a 30-year full-time employee at the City of Ketchikan, ending my career retiring 4 years ago at Ketchikan Fire Department as station captain and paramedic. And having worked with Ebner Hogue, I'm here to voice support for his application as city manager.

Um, before Hogue even got to KFD, he already had a 20-year career in the Air Force, right? This guy's a consummate professional. He went on to get his master's in management and public administration. And he's already got experience elsewhere in the state working as a city manager. But you guys already know all the different qualifications for the people that you're looking at.

I want to tell you about things that I know having worked with them. And what I really enjoyed about working under Hogue was he had two main characteristics that I think apply to being city manager. He was fair and he was firm. What I mean by being fair is he has the kind of calm personality that is open and inviting for everyone to comment. Everyone gets a chance to air their grievances, express their opinions, and he doesn't come in with judgment until he's heard everybody, and then he considers it, and then he lays down a proposal, and he lets people know if it's not what they wanted to know, why that go the way that And that was different from most of the chiefs that I've worked with.

He was the most considerate person to work with. Sure, the complaints at HR went down drastically compared to previous chief.

When I say he's firm, I think that he's the kind of guy who's going to hold people accountable for their budgets. He doesn't Mintz's words. He's a nice guy, he's amicable, but he's a firm hand when it comes to the important details. The other thing that I think would benefit the city is he's the kind of guy who's always looking at what's new in the field. So he's always looking at updates to technology, updates to personnel practices.

It's just that kind of dedicated guy who's going to be the most informed person in the room for the most part.

I don't think there's too many negative things about Hogue. I think the only thing I've heard is people weren't very happy with how management of COVID went. Not to dredge up any of those past issues, I actually think he did a really good job. He didn't want to be there for that. He was the right person to do that job.

It was a hell of a job. It was a lot of juggling different interests, and he didn't have a lot of wiggle room as far as what people had to do. Those dictates came from the state, which came from the Fed. It's not like anybody else could have come out with a much different way of handling it. I thought the way he handled it kept everybody calm.

He's a great communicator. He had this COVID-19 dashboard. We could all go online and check out how things were going. There were constant updates. Facebook Q&A sessions to keep people informed.

I don't know how anybody else could have done any better with the hand that he was dealt, that we were all dealt. And with that, I'll take any questions you guys have about my time working with Heather. Any questions?

All right, thank you. Gretchen O'Sullivan.

Oh, be careful, it's a booby trap. All right, I wrote mine. My name is Gretchen O'Sullivan. I live at 706 Chatham Avenue. I also served the city at the fire department for over 30 years, um, and just recently retired.

I'm also here to express my strong support for Abner Hogue as the next city manager. I had the privilege of working with Abner for 7 years when he served as our fire chief. Throughout that time, he proved to be an outstanding communicator. He listened to his staff and prioritized clear, effective dialogue. Not only was he fiscally responsible, but he demonstrated personal and professional integrity, and he took responsibility for his role with calm city leadership style that I appreciated.

I also had the opportunity to participate in an emergency management workshop that he led as a consultant after he was no longer the chief. In that setting, he was organized, professional, engaged, and those are qualities I believe are essential for guiding the city through both routine operations and unexpected challenges. Abner has lived in Ketchikan and is familiar with the community and its environment, and that local experience combined with his demonstrated leadership capabilities make him well suited to understand and address the unique needs and challenges of Ketchikan. Based on my experience working with him and observing his leadership, I believe he would be the best Thank you. Any questions?

Thank you, G.

Deborah Simon.

Deborah Simon, South Tonkas Highway. So many things are being said about the city's library right now, and there's so many different tacts I could take when When addressing the subject, I could talk figures, like how inflation-adjusted 2018 versus 2026 budget figures show only a 6% increase in personnel costs, but a 22% increase in borough library charges and a 56% increase in school district library charges. I could talk feelings, and I can't imagine there are too many people more qualified to do that. But how about I just talk facts? Number 1, the borough does not own or operate the library.

The city council hires the city manager. The city manager hires the library director. The library director makes all operational decisions. Number 2, the borough does not pay the library. In 1985, non-area-wide residents elicited—.

Elicited—. Or sorry, be elected to stop paying an individual library user fee and allow the borough to collect a levy. Those monies are paid to the city, which uses them to operate their library. Number 3, the borough does not determine the library's budget. The city sets the library's budget during the annual city budget process.

At no time prior to or during that process are borough staff or officials consulted. The current library services agreement gives the borough two choices: pay the bill the city gives it or cancel the agreement. And number 4, the borough does not provide non-area-wide citizens with elected library representation. The library advisory board is advisory only with no decision-making power and its members are appointed by the city mayor and approved by the city council. Any borough assembly member sitting on that advisory board has been put on notice that he or she represents him or herself, not borough residents.

As a non-area-wide borough resident, I want this to change. I want elected representation in library operations and funding. How that happens is another conversation that I really do hope city staff will finally have with borough staff. Thank you. Thank you.

And then, Your Honor, I think we have the whole American Legion here. That's what I know. It just looks like—.

Mayor, Vice Mayor, council members, good evening. My name is Chris Boss. I'm the First Vice Commander of Post 3 here in Ketchikan, Alaska for the American Legion. I think we're more here as an informational kind of pass the word to the council and our community regarding our Memorial Day ceremony that's coming up tomorrow. We will be at Bayview Cemetery placing flags and crosses about 0900 in the morning, and then there will be a luncheon for military appreciation at noon at the post for all folks to come by.

On Monday, we will have a pancake breakfast at the post, 3:00, 0800 to 10 o'clock. Everyone is welcome to be there, and then at 11:00 we will reconvene at Bayview, weather permitting, Um, and we'll have our Memorial Day ceremony. Your Honor, I promised you I'd email you, and I did, and it ended up somehow returned in my junk box. So I, I gotta get your email address. I promise the next event I'll straighten that out.

Uh, but my apologies. And, uh, just would like to invite everyone to the Memorial Day ceremony. Thank you. Thank you. Thank you.

Appreciate it. Yes. So what is the event schedule? The events will be, um, at 0900, we will have, um, the opening ceremony, uh, at Bayview on Monday. And then we will go through the progression of different folks adding their input, comments, speaking, uh, you know, for KIC.

We hope they're going to be there. Um, and then we will conclude with taps and a wreath placing, uh, at the mausoleum. The event should take approximately an hour.

Is the, uh, um, Legion open in the morning? Absolutely, we'll be there at 0800. Well, some of us will be there a little earlier, but 8 to 10 is the breakfast. We'll, we'll shut down at 10, at 10:00, 10 o'clock. And then we'll head towards the Davidson Cemetery.

Thank you very much. Thank you for your service. Thank you. And that's the end of our list, Your Honor. Is there anybody else in the audience that wishes to speak to the council that didn't sign up at this time?

Hearing and seeing none, we'll move to the consent agenda. Is there anything that we wish to move up on the business item? To consent? Seeing none, do I have a motion to consent? Second.

Move to consent. Madam Clerk, would you please read the item? Or did you have— no, I need— we can read it first, then you can discuss. Okay. Okay, uh, approval of the regular minutes of May 7th, 2026, and special meeting of May 14th, 2026.

Assignment of tideland lease ADL-22462, which had the revision. Consent to assignment and amendment to tideland lease ADL-104817. Award of contract 2638, professional design services, Port and Harbor's new maintenance facility shop, Alaska Architects and Engineers. And council review of package store license renewal for Alaska Liquor Blitter North, and a council review of the distillery retail license renewal and distillery manufacturer license renewal with manufacturing sampling endorsement for Uncharted Alaska Distillery. Thank you.

Is there any item? Your Honor, I need somebody to speak about BCND, please. Item B is assignment of tideland lease.

Mayor, council members, so this is basically what this is, is these tidelands, the uplands got sold to a different individual. So these are just reassigning the lease to that new owner. And then the one that's actually amended, that is corrected to according to ordinance number 21-1938. Which, um, passed back in December '21, I believe. And it is stating that any tideland lease should be 2.5% above the unimproved land value.

So yes, follow up on that, uh, is there any cost associated to the city? No, there is not. Thank you, Your Honor. And if—. Go ahead—.

And if somebody would like Portsmouth Harbor Chief speak about the professional design services of the new maintenance facility? I can speak to that, or unless Wayne wants to. But, um, Mayor, Council members, so in the 2026 capital budget for Portsmouth Harbor, uh, it was approved to have a $1.5 million, um, maintenance building, uh, rebuilt. Um, this is to get the design work for that. Our original design was a little bit too big and a little bit too much for the approved budget, so we're going to go back to redesigning and then make it fit within that budget amount.

So, Wayne, has anything else to add? Mayor, council members, yeah, just speaking to that, um, we needed to bring this in to do the design. Uh, there was an initial design done by Marble Construction. They have since closed down their architectural firm. This very same architect that did the original design has, uh, started their own business, which is the Alaska Architects and Engineers.

And we'd like to continue with this person who already has all the drawings, has that knowledge to be able to do this work. So this will actually be for the design, uh, for all the mechanical, and also for construction support once that starts. Yes, it's commendable that it's coming up now because our maintenance facility at Ports and Harbors is very small and doesn't have proper A events, so this is a great project. So thank you very much. So, Wayne, uh, assistant manager Hart explained the existing plans, uh, the size, uh, the construction, um, was more than we budgeted for, right?

That is correct, sir. So when you're going to trim this back, what are we going to be looking at? How much smaller is this facility going to be? Are with the changes that you think that will be the cost savings? The cost savings really is in order to do the other building, uh, there was a lot of foundation work that would need to have been done, uh, that we just can't afford.

So it will— they'll downsize the building. It'll still have a mezzanine for storage. Um, it will certainly be a better building. Um, it's, you know, the, the original building was— this is our dream building. This is what we want, and, and we just can't, you know, trying to keep it within the budget, just couldn't do that.

And, uh, the idea was to be the grown-up in the room, make it a smaller, smaller building, fit our budget and fit the original footprint of what we have. Um, it'll still be a functional building. Um, there is, uh, um, they put ventilation in there where they can actually do welding in the building. Unlike really what they're trying to do now, which it's not designed for. So that's the, the mindset of, uh, going forward, downsizing it.

And that's the reason for downsizing it, so we can actually have our budget and get this thing done. All right, any other questions? Thank you. Thank you. Any other questions on consent?

I understand none. Madam Clerk, would you please call the roll? Bradbury? Yes. Gage?

Yes. Zingy? Yes. Goose? Yes.

Matani? Yes. Gas? Yes. Vinnegar?

Yes. Passes, Your Honor. Thank you. Unfinished business, but we have none at this fixed time, so it brings us to item 7, new business. And the first thing we have is the library presentation, city, uh, in regard to the city and borough library agreement.

Manager Hart? Um, so as we're all aware, the borough asked last Monday, um, the decision to submit their cancellation of the current library lease with the city. So Library Director Tully would like to kind of give a short presentation in regards to the money and everything else in regards to how that—. Perfect. So thank you.

Okay, good evening, Mayor Siebertson and members of the council. My name is Pat Tully. I'm director of the Ketchikan Public Library, and I'm just going to— here to give you a little background on the city borough library services agreement. And recent discussions that have taken place at the borough assembly. So, um, so after non-area-wide library towers were approved by the voters in October of 1985, the city and borough agreed to calculate the borough's contribution to the library's budget based on assessed property valuation of non-area-wide borough property as a percentage of the borough's total assessed property valuation.

In exchange, the library is— was and is able to provide full library services to all residents of the borough. This method of calculation changed in the early 1990s to one based on the population of the non-area-wide part of the borough as a percentage of the total borough population, as estimated each year by the State of Alaska's Department of Revenue. This is how the borough's contribution is calculated according to the current agreement signed May 18th, 2018. Next slide.

So this is calculating the non-area-wide borough contribution is necessarily some— a somewhat Byzantine process. Each March, City Finance Department calculates the amount of the borough contribution for the coming fiscal year and sends this to the borough in time for their budget preparation. The borough's contribution is calculated as a percentage of the library's estimated budget for the upcoming fiscal year to match the borough's fiscal year budget. And as you know, the city is on a calendar budget. So the city finance department takes half of the library's current calendar year budget, uh, minus a few minor expenses, and it asks me as library director to estimate the library's spending for the upcoming calendar year and takes half of that.

These halves are added together and then multiplied by the percentage of the non-area-wide burdened population. Finally, an adjustment is made to the amount based on the library's actual expenditures of the previous year. In all but one year in the past 10, library expenditures have averaged about 7% under adopted budget. So this true-up reduces the amount the city requests of the borough for its contribution to the upcoming fiscal year. The next slide, please.

So, recent library budget increases. Since 2020, the library's budget has increased by 37.5%, and in 2026 it stands at $1,993,735.

The library's recent budget increases are due to increased personnel benefit costs and risk management insurance, as well as utilities costs and adjustments to salaries to bring them closer to market rates. In the 2026 budget, we also have almost $108,000 in one-time costs to replace failing equipment and migrating to a new library system. Next slide.

So, speaking of system migration, the $53,000 one-time cost of a new system will save money in the long run. Our current system's annual maintenance cost is about $38,400, with an anticipated increase of 7.9% a year over the next 5 years. Moving to a new system would reduce the annual maintenance cost to $22,000 in 2027. With no more than a 5% increase per year after that. In 3 years, we would have saved the money that it costs us to migrate.

Next slide.

The borough's contribution to the library budget from fiscal year 2020 to fiscal year 2026, the borough's contribution to the library budget has increased by 39.9%, which is 2.4% more than the amount the library's budget has increased during that same period. At the same time, the percentage of borough residents who live outside the cities of Ketchikan and Saxon has increased from 37.9% in 2020 to an estimated 40.22% in 2026, an increase of 2.3%. Next slide, please.

In fiscal year 2027, the city's calculated the borough's contribution to be $725,107. That's an 8.87% increase over fiscal year '26. The library budget on which this calculation was based includes the $108,000 in one-time expenses for failing equipment and the migration. Next slide. This spring, the Vernal Assembly has discussed the library services agreement as part of their fiscal year 2027 budget program.

The concern of several assembly members is that the annual increase of the borough's contribution to the library's budget over the past 3 years has been too high and unsustainable. At their May 18th meeting, the Borough Assembly voted to terminate the current city-borough library services agreement. That termination will be effective December 31st, 2026. In the meantime, borough staff have been directed to prepare a report on what it would take for the borough to have area-wide library powers and what the process would be to make the library a borough department. The impetus behind this is to reduce and limit the borough's non-area-wide contribution to the library's annual budget.

Next slide, please. During the assembly's discussion, some members have expressed concern about whether the library is being fiscally responsible.

For the purposes of analysis, I've split up the library's budget accounts into accounts that library staff have control over, which we call our discretionary budget, and accounts we do not control, the non-discretionary budget. Library staff do not have control over increases in staff wages and benefits, in building, equipment, and system maintenance, in risk management insurance, and utilities. These costs are almost 90% of our budget, and they've increased 46% since 2020. Library staff do have control over the cost of new books and other collections, program costs, temporary salaries, transportation, and training. This accounts for a little over 10% of our total budget, and we've reduced this by 11.4% since 2020.

Next slide, please. There's also been a question about whether the library suffered from mission creep. The library's mission, as stated on our website, has not changed in 40 years. But the world we live in is changing, and our communities' needs, interests, and practices are changing with it. Changes in how people find and use information and other content have made it necessary for libraries to offer more than print books.

And physical media. The library's mission hasn't changed. How we fulfill that mission is changing and must continue to do so in order to meet the needs of the people of Ketchikan. Next slide, please. The uncertainty that hovers over all of this is the probability that the school district will no longer be able to share in the cost of an online system and may have little or no school library services next year.

The Ketchikan Public Library and the school district libraries, collectively called the First City Libraries Consortium, currently have an agreement to share an online library catalog and, during the school year, our collections via the district's courier service. The First City Libraries division budget is part of the, like, the public library's budget, and the district pays for a percentage of the system costs based on the percentage of titles in our shared system that are school library titles. The district school library staff create and maintain patron accounts for their students and teachers. They keep track of books in their collections and provide a catalog with which people can find the books they want. They also teach children how to find and use books and the library.

Until the district budget is finalized, we will not know what services school libraries will be able to provide next year and to what extent the public library will be affected. Now, in conclusion, the Library Services Agreement does not stipulate how the borough will obtain funds to pay for its contribution to the library budget. Up until last year, it was paid using a 0.7 mil rate on non-arealized properties. Last year, the assembly reduced this to 0.5 mil to spend down a surplus in this account. At their June 1st meeting this year, the assembly will discuss the non-area-wide library mill rate as part of its agenda item Resolution 31H.

That's all I have. Any questions? Julie.

Pat, when you talk about the costs of employment, the benefits, are we— what percentage of that is the medical insurance that has gone up? Extra? 45% From my visit to every budget recently. I don't have that on the top of my tongue, but I can get that for you. But most of it is due to our— now I can't find my words.

So majority of when we talk about wages, the wages are a percentage, but the majority of the cost of The employee's package is what's gone up in my— I think it's a combination. I don't know percentage-wise what is benefit, what is salary, but I can definitely find that for you. Thank you. Jay. Thank you for the presentation.

My question is, do you have any idea how many FTEs we have in the library staff? Currently, we have 11.225 full-time equivalents, yeah. Is there any way that can be adjusted so there could be savings so that the library— because most of our budget goes towards wages and benefits across the board. Is there a way that that can be adjusted so we have savings in that area as well? Because if the borough and the school district budget is restricted, we might have to privatize the library because the wages and benefits will not be able to be afforded.

Right now, we have actually skimped up through the past 15 years or so. We've reduced the library's budget, and I'd have to check to see how much we've reduced it. FTE. We have to reduce the library's FTE. We've also gone to 7 days a week, I think 56 hours a week.

And given that schedule and given those FTEs, I don't think we could reduce our regular staff anymore. I myself work at a desk about a third of my time and I work fewer desk hours than anybody in the library. And there's a lot of backroom work that also needs to be done. We have a cadre of substitute staff. So when somebody is on vacation or is sick, we call in that substitute staff.

We don't have a lot of flexibility within our regular staff to cover those hours. Thank you for the explanation. Nellie. Can we— I know maybe Bob remembers, but what the fee was for when people lived in the borough had to pay. Do you remember?

For the library fee? Yeah, before we did this where we encompassed the borough program. Yeah, I was just wondering if we can get that. Yeah. I actually, I had Michelle pull this, but the budget for calendar years 1997 to 2026 It's pretty consistent from $12.48 for the library, and today it is actually less by— it's $11.225.

So it's actually the percentage of change is dropped by— it's minus $11.81. What is that you're reading, Ted? The actual, like, from 1997 costs for the budget for the calendar years from 1997. They're all like lined out for the different departments just per year. So, I commend you guys for what you're doing.

And I understand that— I think one thing that gets lost is the fact that we don't control healthcare. And in the state of Alaska, the level of medical insurance has gone up 75%. And that is for Alaska. It's 6.9% in the lower 48. I kind of went and did a little research because I am a little upset.

I would like to know what it would cost each individual in the borough and what, you know, if we had— if they had to pay for a library, because the library is for the community. It's for those who, you know, not everyone can afford internet. Not everyone can afford to buy books. I get a little personal on this, and I'm just going to say is that this library was started by a group of women of privilege that donated their books that they had. They created a shelf in the old city building and they started that library.

And Whether someone uses it or not, whether I have kids in school, I have grandkids in school, and the idea that they won't have a library, that really bothered. But I appreciate all the librarians. I appreciate every department. But I think it's really sad when we don't value, when we don't consider that we're not all a privilege and that library is important to everybody. I use it.

I mean, so—. Judy. So is there any— I mean, I appreciate what everybody's saying, but we still got to pay for it, right? So is there any plans? Are you working on something to figure out how we're going to do this?

Because to me, if we lose a considerable amount of the funding, we're going to have to change how we do business, period. I mean, I'm more wanting my water to turn on and my toilet to flush, and I appreciate the library, but how are we going to pay for it? And I'm just wondering if you put together anything, if you've started working on a plan, or your advisory board, are you guys kicking something around? We've definitely started working on a plan and thinking about impacts, considering various scenarios.

And so we're doing that, and at the same time, we're working with the school library staff to figure out a way to continue to provide services, depending on whether their final budget, which probably won't come out until late June, includes any money for library services or library school staff. So, so we're working on that. And yes, we're also coming up with ideas for various scenarios depending on whether there are, you know, how, what degree there will be a cut library funding. Okay. And I'm sorry, just when are the, when is the school supposed to have their budget done?

I think by late June, they should. Yeah.

Abby. I just wanted to make a couple statements. I watched the meeting on Monday and I followed the discussion that's been had surrounding the library. And never once have I heard them say that they don't want to fund the library at all. It is a possibility.

Everything's on the table. But I think what they're just asking, which I think is very reasonable, is They need to be very mindful of their budget, just like we need to be mindful of ours, just like the school district needs to be mindful of theirs. And this is a cost that they see continuously going up, and they're trying to reduce their, their budget. So I think them just reopening this contract like it has been before, or agreement, is just— it's not to defund the library, as some people are portraying it as, but it's more of a we need to ensure that we're not spending more than what we have. And so I just want to make that statement because I've never once heard they want to completely strip all the funding, like never fund it ever at all.

And then also, I'm not hearing anyone saying that the library is like not important. I've said it many times at this table, and Councilmember Zingy also just took the wind out of the sail here and said it earlier, is we're at a critical point in our budget in particular that we have to look at those services that are needs that we have to provide to our citizens to ensure that their basic, basic, basic needs are taken care of.

And then we might have to give up some of our other items that aren't necessarily part of that hierarchy of keeping people, you know, in a home with running water and electricity and heat. Um, so I think this is a great time to really discuss the budget. I mean, I've said it before, we need to reduce our deficit. It is out of control. Um, and having plans for reduction of costs, however that may be— it might have to be on in-personnel, it might have to be on those areas that we don't want want it to be, but we are getting to a point where it's fairly critical.

We have a large deficit and we're going to be facing a larger deficit come this year. So I think it's just reality that we really need to look at, um, and really take it serious to find the best solution, um, collectively for our community to ensure that this remains a somewhat livable place for our citizens.

Dick. Yeah, um, I didn't hear any of the borough people at the co-op relationship committee just yesterday or Tuesday say that they wanted to cut this off. They said let's look at the agreement and rebuild the agreement and we'll see where it's at because I don't think it's going to go away. Nobody wants to go away, but they're looking like everybody said at the cost. So we might be anticipating working with lower costs, but at the same time see what the new agreement may say at the end.

So we need to make sure the agreement gets pushed forward fast enough we can deal with it during our budget. So, uh, I'm optimistic that we can come to a new agreement and we'll see what it looks like. Yeah, my question pertains to what Councilmember Kucera was just speaking to. I did watch the meeting of the Borough of Suffern, NY as well, and I did appreciate the fact, given the direction that they took that they at least gave as much heads up as possible to the library and the city as they could, and that they extended the termination date to the end of our calendar year, which is the end of our budget year. And I'm glad to hear too, because Council Member Zingier asked a question that I had as well.

I'm glad to hear that you're game planning, because there's a lot of variables here between the school district's budget, the contribution from the borough, and the differing fiscal calendars that we have between the calendar and their fiscal year. But with respect to the— renegotiation of that agreement that Councilmember Kuss was speaking to. I wondered if there are scheduled meetings or active discussions happening now, or if those are to be scheduled so that we can get ahead of this thing. If there is an appetite from the borough to meet a contribution, a certain level, so that you can do your budgeting in a timely manner, are those conversations scheduled? Are they forthcoming?

Uh, it's kind of above my pay grade, um, but I think we have not yet, um, gotten the official notice from Councilmember Finnegan, um, so we haven't—. We don't really have a schedule yet. We've been kind of waiting for that actual termination paperwork, um, but we have in the past, we've had tried to negotiate with them to get different options of how we do it. Um, I believe July of last year we did bring forward to council a CPI adjustment, um, for them to continue on, and that was denied by council. Um, I think we've also offered appraisal values.

I mean, so we've been in the works of having discussions with them throughout the whole time. Before this happens. So thank you, Abby. And then Judy. Judy had her hand up first.

Judy. Um, who participates in the negotiation? Uh, when we were discussing earlier, or later last year, was Lacey, myself, and I believe Mitch was in there. And then it was Ruben, Sina, and the borough assembly, or the borough's attorney as well.

Abby. I just wanted to plug in there that the Joint Cooperative Relations will be discussing this agreement as well. They—. The borough had brought it to us, but obviously you guys know we didn't have the discussion yet, so we were unable to say anything or get the direction of the council in that area. Um, it sounded— they gave an example.

They wanted our current agreement just kind of continues on forever to ever and never really gets reviewed unless it gets canceled and then reviewed. And so they were looking to update that to more of like a 3 to 5 year term so that every so often they actually can sit down and, and review it. Um, what was— that was what Ruben had explained to us, and then he had explained one other— this is the term, and I forgot my sheet today. There's two other like simple things that they really wanted to look at and make it more of a review process than it going through Infinity. So I just wanted to let you guys know that that did happen on Tuesday.

We'll continue discussions. Yes, I got a lot of calls from people that read that meeting as they're canceling. So everybody's asking me how much they're going to have to pay. So I think it's important to have that fee so people know what they're looking at if this doesn't work out.

Yes, just to put my two cents in. Absolutely. I don't have many cents, but a couple. Uh, I was on the, uh, meeting yesterday with the relations also, and I was a little relieved to hear, uh, the borough manager did speak on a little bit. And just to reiterate what Dick and Abby said, because they also were on it, that at least from his perspective, it was like they said, that more that they hasn't been changed or updated the agreements in a long time, and they want to review it, go over it.

Obviously, I think it it would be foolish not to assume they want to make some sort of adjustments that are going to benefit them financially. But yes, I agree that they did not seem like they want to just stop all funding. It sounded like they want to revisit and renegotiate. Where do they want to come down on that? I don't know, but it sounded like something a little more reasonable.

I think one of the interesting comments that was made And it was a fact of history that the city of Ketchikan became the operator and owner of the library. City, of course, was formed before the borough was, and so we took on some stuff by default. The hospital services, etc., thing like that. But if there was a path forward where the library could become an area-wide service managed by the borough, I think that's a reasonable discussion. The reality of it is, though, there's a debt service in regards to the construction of that building that would have to be worked out.

We would still have a cost because we are members of the borough, and that assessment could be turned over, but it would be broadened into the rest of the borough also. So the obligation would become more area-wide also. And I don't think that's a bad thing. And then if the borough and control of the library and then the interaction with the school district, I think it becomes even easier. So there's, I mean, I don't want to see that come off the table because it, in reality, if we started a community brand new today, we had a city and borough, that would be an area-wide fee because it serves area-wide services.

Um, you know, I, I was a little concerned back when the Bureau reduced the mill contribution 7 to 5, right, in regards to that, uh, to draw down those reserves. And then we get into a situation where they don't have enough funds to maybe pay for it. But that's just a process, the math. When you reduce your revenues, you ability to pay reduces also. Um, the real unfortunate thing in this, and, um, I think there people understand it as we see the dynamic with the school district right now and the pressure that are on our children and parents in regards to the financial situation they're, they're wrestling with, and then to throw the library in the mix, uh, is, is You know, it affects the kids, and that's a big concern for me of how we manage that.

And the bureaucracy should be able to come together to support the community in some way to make it all work. So I'm hopeful that through renegotiation, through budgeting, through directions, that we can get there over time. So thank you for your report. Yes, Randy. Just a comment that's probably more directed at this body as a whole.

Well, it is not necessarily the staff, but I do think as we face this challenge that we ought to at least, not to point a finger or anything, but for ourselves, we should learn the lesson and take the lesson that we are in now.

In that I remember a number of years ago, just as a regular citizen who somewhat paid attention to local news, The word was the downtown library was in disrepair, totally outdated, would cost way too much to keep it going. We need a new library. And we got the platinum version up on the hill for a very expensive amount. And we then asked the community members to pour a lot of money into that building. Which today is thriving, operational, busier than ever, still standing and being used many years later, when the impression at the time was, oh, it would cost too much to keep it afloat, we gotta cut ties with it.

And also, Mayor, you may be familiar with this one, the same discussion was had about the fire station, which is now a very prosperous, thriving business. Uh, local entrepreneurs stepped up and made a great business there. But same thing with that, we were told, oh, the building's way too far gone. It's kind of like what we hear on vehicles a lot. Oh, the vehicles need too much repair, it would be more expensive to keep them going, so let's buy a new one.

So I just think this is— it's worth taking a pause for when the next building comes along or the next fancy vehicle comes along. Maybe we consider it a little more because The community took on a huge debt by paying for that building up there, and I'd like to learn that lesson whenever the next one comes along. Thank you. Yeah, I'm just one—. I hope simple question for Director Tully, if I may.

It just goes back to those varying scenarios that you're considering. I know you mentioned the school district, you expect their budget to be completed sometime in late June. I wondered if there were other, for lack of a better term, like red flag dates where you know you'd have to implement one scenario versus another, just so we can kind of keep a a general— and maybe you don't have them now, but just we can keep like a general timeline in mind because I know normally you'd submit your borough to the manager staff by September, August, September, right? So are there like cutoff dates where you know you're going to have to shift from one potential scenario to another that we should be keeping in mind? Oh, I think, um, after the late June scenario for the school district, uh, I think it will be, um, when we start preparing the 2027 library budget.

I think that by then, hopefully we'll have a better idea of how negotiations are going and what direction we're going in. We may still have to do a couple different versions and, you know, keep it open to various scenarios because that's not much time between now and, say, mid-August. Which is usually early August is when we start coming up with our budget for the next year. And so we might have to be thinking in a couple different directions so that we can pivot depending on how negotiations go. Thank you.

I think one of those scenarios should be what's the library look like in 2020 with $750,000 over cap?

Anything else?

Hearing, seeing none. Um, the Item B was on bringing us Item C, authorized budget transfer award, contract number 2626, Ketchikan City Hall HVAC replacement to Dawson Construction LLC, authorizing construction administration services payment to, um, Ms. Beck Engineering. Can I have a motion?

Your Honor? Yes? I move the city council award contract number 2626, Ketchum City Hall HVAC—. I think there's a motion right here.

Here, pass that over to—.

I move the city council award contract on the 2626 Ketchikan City Hall HVAC replacement to Dawson Construction in the amount of $2,742,100— I'm saying that wrong— um, 114, established project contingency of $257,866 for a total authorized project cost of $3 million. To Section 3.12.051 of the Ketchikan Municipal Code, authorize Amendment Number 2 to the Ketchikan City Hall HVAC Professional Design Services Agreement with R-E-S-P-E-C Engineering for Construction Administration Services in the amount of $128,772. Authorize a budget transfer in the amount of $1,248,396 from the appropriate— appropriated reserves of the Public Works Sales Tax Fund to the 2026 Public Works Building Maintenance City Hall HVAC Replacement Capital Account. Authorize funding from the 2026 Public Works Building Maintenance City Hall HVAC Replacement Capital Account and direct the city manager to execute the contract documents on behalf of the city council. Second.

Moved and seconded. Mayor Hart. Um, so this is— we have, uh, our Public Works Director, uh, Seth Brackey, up here as well. Um, but this is something that was again budgeted in the 2026 general government capital and general government budget. Um, what we're asking for here is our original request in the budget was roughly $1.9 million.

Um, as we're all aware, costs go up and they continue to go up on everything that we do, whether it be shipping or product or Other things are labor. So what we are asking is for additional funds in regards to this project. We did throw out an RFP for this project. I believe we received 4 bids in regards to this, and Dawson Construction was the lowest bid. But I'll let Public Works Director Seth Brackey add anything else if you like.

Go ahead, Seth. Thank you. Sure. Thank you, Honorable Mayor. Council members, Seth Brackey, Public Works Director and Engineering Manager.

Right away when the bids came in for this project, we recognized that they were high over our estimates. Um, so in our immediate evaluation of these bids, you can see Dawson Construction was $2.74 million, the next, PK Builders, $3.08 The next, $3.447 million. The next, Marble, $3.488 million. So, looking at those numbers, you can see that the bid from Dawson's reasonable and, and low. So, next we want to see, is there any way that we could cut costs from this?

And, or is there a way to phase this in a way that could save costs? And through those discussions with our design engineer, uh, RESPEC Engineering, they're a consultant on this. Also, Roger Smith, the mechanical engineer from RESPEC, is online and can answer any questions or assist. But there, in our review, there really isn't a way to change this, whether through phasing, um, or changing of the project that would save us money. So that was why we couldn't recommend it.

That's why we want to bring this forward. Um, just the history on this— back in 2018, uh, we've been at this for quite a while. We've been kicking this can down the road. 2018, The project was estimated at $1.2 million. So delaying this project, the hard truth is, will just cost more money.

So I think we have a a good bid that will get this project done well, uh, and get it completed before we have a catastrophe of the boiler failing and have to dump money into an old system. It's basically wasted money. So looking at all the options, this is hard decision to make. I think that it's the only decision that won't cost additional funds from here moving forward.

Yes, Jay. Your Honor, I mean, I've objected to this from the very beginning with the budget session to the current system that we have. We keep hearing the boiler might fail and it might affect a lot of IT systems and other systems. But truthfully, how long? Because we are not flush in cash.

We are in a deficit and facing a larger deficit.

How long can we prolong maintaining the system so when we have the revenue, we can deal with it?

Thank you, Council Member McConney, for that question. I'd like to bring in our mechanical engineer, Roger. Roger's been on site, evaluated the existing system, I think can speak to its current condition and the issues with the current system. Roger? Yeah, you bet.

And I'm sorry, this is Roger Smith with RESPECT. Yeah, that's a good question. It's a good point too on how much longer will it last. And that question is always hard to answer. So, you know, it's been well maintained over its time.

The boiler though is now 43 years old. And a serviceable lifetime is expected to be about 35 years. So that's— and that's just one part of it. There's also the fan systems for the building and the cooling system for the building. There's multiple systems there.

Those units are over 20 years, and with those types of systems, they've reached the end of their serviceable life. They use refrigerant that's R-22, which is Freon, and that is no longer produced. So the maintenance is just going to get harder and harder. I can't give you a timeline of when your system might fail. It's just—.

It's—. We know it's well past its expected life. Another part of it is the ventilation system itself. And the ventilation is inadequate and does not meet current code. So part of this project is replacing the heating and cooling system for the building.

Part of it is the fan systems and the ventilation for the building.

Thank you. Yes, Riley. I'll just weigh in on it. Uh, first of all, I just want to say this is nothing against any of the bidders, including the one who won, at all. They are doing their job and putting together numbers that work for them.

Uh, but I have to remain consistent too. I also have opposed this project from the very beginning, including through budget time. And at this point, I now have way more reason to oppose it. As Jay said, we are not flush with cash is a ginormous understatement. I mean, to me, this would just be a huge mistake to go forward with, with it being this much more expensive, even more so.

But we're closing 2 schools, teachers are being laid off. We're just hearing about our library situation. Citizens' rates. We're hearing from the people now. It's finally catching up with us on all these rate increases.

People—. I mean, we say it all the time, but it's the reality— people cannot afford what we are charging them in rates and taxes. And, uh, at some point we have to step back, look at what the community members— what we are, I would say, asking, but the way government works, it's demanding of them. To keep their lights on, to maintain their lives, uh, and we need to show some skin in the game here, show that we are going to make some tough choices just like we're requiring the citizens to do. This is a project that, uh, you know, we've heard information on it.

Yes, it's necessary, but I just—. I—. There's no way I could support this with what the community is going through right now. So I would encourage everyone one with— I mean, we went from $1.9 million to $3 million. All the more reason to delay this.

I know the argument is just like I said earlier, we hear about with vehicle maintenance and stuff, the longer you put it off, the more it grows and expands in the future. Sure, but at the same time, we have to start reducing somewhere, and I would rather reduce, uh, on this project than have to lay off a bunch of employees. And I fear that that's the direction we're going with a lot of our different budgets and what's going on. So I would just encourage the council to consider that this was already a big ask. It's now much bigger.

And at this point versus where we were during our budget, I would say a lot more information has come out in the community. The community is in a lot tougher position with the schools closing and other things going on. So I remain opposed to it. Not anything against any of the contractors, but just out of fiscal obligation to our citizens. Thank you, Rani.

Yes, Jack. Yeah, and I think, Daniel, did you have your hand up? Okay. I was just curious if you could speak to the status of the appropriated reserves of the Public Works Sales Tax Fund. Give us some sense of how that fund is standing currently, if you're talking about a $1.2+ million drawdown.

Yep, thank you, Council Member Finnegan, for that. I'd like to turn to the finance director.

Good evening, Mayor and Council. Um, Michelle Johanson, finance director. The—. We do not have sufficient funding in the Community Facilities Development Fund. The only other fund that we can really draw from for capital improvements is the Public Works Sales Tax Fund.

Um, it is projected to be $4.8 million at the end of 2026. It meets the 25% of total expense— expenditure balance that is required or set in the fund balance policy, so it is in compliance. Um, but understand that this is This is a big ask. I think the other question though is what, what happens if we don't do this? We have a building, and if we're not maintaining the current building, like, what are we doing with the staff in the building?

Are we moving them out? Are we buying a new building? We still need funds to make those improvements. And then the funding for this type of improvement increases as you go along. So what's the plan if we don't do this?

Go ahead, Jan Lee, then Jay. Michelle, based on the switching from oil to electric, what's the cost savings and how that would save on the— or either one. I see that it would be a savings of $290,000 to $435,000. Um, and in the current situation since March, our gas has gone up, or fuel has gone up quite a bit. So what does that look like over the period of the— once the project's put in?

Thank you, Council Member Gates. That's, uh, one of the lay on the tables there, memo I updated. Uh, we had done an analysis on the fuel savings from December. We all know since then fuel has gone up significantly. So December we had— we were paying $4.36 per gallon for heating oil delivered to this building.

That's now gone up to just short of $5 a gallon delivered. And I think the forecast is for fuel oil to continue to rise in the near future. And stay high for the foreseeable future. So this building goes through right at 4,000 gallons of fuel oil a year, and that adds up. So this new system will have a life of 20 to 30 years.

That's at the bare minimum 80,000 gallons of diesel fuel that would be saved. Uh, heat pumps, these types of units are a lot more efficient, and it does result in cost savings, also has an added benefit of improving the work area for the staff. Diesel— many, many people are going away from HVAC systems that rely on diesel fuel. So, right. Just to follow up on that, I'd like to also— I mean, I don't know how deep the analysis has gone on this, but I'd like to point out also that at least if we follow recommendation from the finance department, our electric rates is going to go up 46% over this 5-year period.

So while diesel is also expensive, when electric rates are going up that much, we have to consider that too. So it's not necessarily a wash on savings in that thought.

Okay. Just a point of information from the finance director.

You just told us that we are in compliance with the 25% requirement of the reserves. If you draw down this $1.2 million, where do we end up?

So the 25% is $2.2 million. The current projected reserve for 2026 is $4.8 million. So we take out $1.2 million, we're at $3.6 million. So we're still in compliance with that projection. Follow-up, Your Honor?

Yes. So, You said projected reserves? Yes, based on what we've budgeted in 2026 for all of our capital in the public works sales tax fund. And the projections you think would be accurate? Based on the capital projects, we haven't had any other major changes out of that fund.

We, we did take a little bit, a little over $100,000, um, to offset the lack of increase for sales, seasonal sales tax. So we took $130,000, I think, from public works sales tax fund offset. Thank you.

So this is probably one of those points where we need to think about prioritizing. So, um, we underestimated the cost of this. Uh, the bids came in all fairly close. The contractors were looking at those numbers apparently different than we do. Um, so that $1.2 million ask, is there a way that we can defer and cut the present capital budget projects, uh, to make up that money out of the already funded capital projects?

Because that's the reality of it. We don't have enough money to do all the capital projects. So I would suggest that we look at if there's a reduction we can do this year. I don't know what, you know, $1.2 million looks like in our capital budget, but it's something that we might be able to defer and move off to another year and reappropriate those capital monies to this particular project. And maybe it would take just a little bit of a draw out of reserve too, but rather than adding money to, we reassign the money that we already budgeted for.

Your Honor, we can certainly look at all of those capital projects. I just remind the council that, um, there's $6.5 million in the capital budget, and that's across all general government departments. So So it's not just one department that we can go from in building maintenance, because the only other project in building maintenance in—. It's $100,000 of the abatement. So the—.

Within this one department, there aren't any other capital projects to take from. Um, so it would have to be an evaluation of all the projects in the general— in the Public Works Sales Tax Fund, um, to determine where we could That would be my suggestion. Abby, your honor, thank you for that suggestion. I, uh, definitely would not be supporting the $1.2 million drawdown on the, um, public sales tax fund, but I do like your idea of looking, um, and assessing needs versus wants and figuring out if we can reappropriate some funds to make this happen. Um, and if not, then I mean, I just, I can't support the the large increase, which I didn't support it earlier either.

So, so I understand the general government has a lot of different departments with a lot of different capital projects. The council approved the capital project, uh, presented by the, the general fund. And then, um, I, I think that this is the reality of where we are today with the reserves where they're at and the demands that are coming up on us, that we just got to reduce or we got to reassign some of those funds. I don't know what that looks like. You guys are on the operational side of that, are able to look at that and see if there's some redistribution we can do.

Um, and I think there's a portion of maintenance for this— I don't know if anything comes out of KPU budget for this particular item. Nothing, nothing appropriated by the Department of Okay, but, um, I think as they— I know you want to get this project rolling, uh, and I do understand that if we delay this project, we come back for it 2 years from now, it's going to be instead of a $2.7 million project, it's going to be a $3.3 million project or $4 million. I get that. So that's why I say that it's expedient for us to look at our other capital needs and see if there's a way that— and it may not get us 100% there, but it may reduce that draw on reserve by half or three-quarters. But I think we have to get creative with our funding and find where we can manage the overcost on this thing with our other REO assets.

Yes, Your Honor, I would just bring up the Uh, so awarding this project tonight, um, would really take money from reserves that would impact next year's capital projects potentially. Um, so we'll be bringing back, um, the deadline is in June for our different divisions to bring back capital improvements for next year. Um, then we'll have a work session with the council, at least one, multiple, and at that time projects for next year can be throttled or reduced. That's one option to award now and, and look at reducing projects for next year. So we're fully able to authorize this now and move forward to avoid any additional costs.

If we need to look at projects, the direction is to look at projects to cut out of this year's budget. Each one of those will come back to you to be awarded or not awarded. So you could decline those at that time later this year.

So, if, if we had had a correct estimate and you had at budget time told us that this project was going to be a $3 million project. We would have adjusted the capital budget accordingly.

We wouldn't spend as much capital on other portions if this was a priority for us. And that's what I'm saying, we're going to have to look at this year's budget.

But I understand if, if the council— I mean, I don't know how we do this, but if the council were to approve a draw from the reserve with the proposal that the Public Works Department's going to come back, the general government side of stuff's going to come back with proposed adjustments to the capital projects by deferring some projects and reshuffling that money for this year's budget. We'll look at everything next year.

Jay, I think your suggestion was accurate. We need to get an assessment. We are almost into the second quarter of what projects, capital projects, are not feasible to do because of maybe staffing, because of not getting proper bids. And then this should have come to us before this contract was awarded or asked for, that maybe we could have managed to find the funding, and this is going to get us to raise rates and taxes again. So I think it would be prudent that we get back a combination of capital projects that are not possible to be taken care of this year and then go forward with it.

But the reality of it is, is at this point in time, we got to— to meet construction constraints and, and procurement, all that kind of stuff— we got to move forward with this or just delete it altogether. And, um, I understand there's other things going on in the community, but, um, I do agree that, uh, maintenance of our facilities is paramount. Whether this project could be postponed, I don't— I don't know. But we know that we move exponent. You're going to have to pony up another million bucks, bottom line.

So I think that the council has been very conservative in trying to figure out how to manage the capital budgets and operating budgets. And if we get an overrun like this, overestimate, we underestimate, we get a higher cost, we have to adjust within the present budget and make it work. I would think rather than just going and taking money out of the piggy bank. We can't continue to do that. That's not a good practice.

So what say you? Want to take a break and think about it? Yes, please. Huh? Yes, please.

We're going to take a short 5-minute break. To order, um, We had conversations in regards to trying to meet the threshold to get this project moving forward and some of the ideas that we could potentially do to do this test. One of the questions was, is at what— how long— much time do we have before you actual awards?

Thank you, Mayor Siebertson, for that question. We are attempting to double-check right now with our attorney. We believe it's at least 30 days from opening a bid, be from May 8th to June 8th.

And so when do you think you could get back to us with a preliminary assessment of potential projects that we can defer from this year's budget to make up the difference? I think definitely for the next meeting, the June 4th. And I don't have a problem with doing a special meeting if we need to get there, uh, but I think it's a prudent thing to do. And, uh, and I, as I said, we'd love to get all of it, but if we get close, I think that's how it will also— so, um Go ahead, go ahead. He called you first, you win.

Your Honor, I move to defer this item till June 4th to allow staff to assess and prioritize currently funded capital improvement projects in order to determine a stronger fiscal pathway to this HVAC system upgrade. Do I have a second? Oh, second. It's been moved and seconded to defer, uh, until the next meeting? Yes, sir.

That meet our timelines?

Uh, I believe so. I believe so, yes. All right, so there's a motion to defer on the table. What's that?

Sorry, any questions, discussions?

Hearing none, please call the roll. Gus? No. Zingy? Yes.

Gage? No. Bradberry? Yes. Finnegan?

Yes. Gass? Yes. Matani? Yes.

And that passes your honor. 5 To 2. Thank you very much. We'll move that to the next meeting. Brings us to vouchers.

Look, we have none. Manager's report. What do you have for me? Um, I don't have too much besides what's in, uh, Manager McLaren's report. Um, I'll just do a brief overview.

Um, the mayor had asked us to come back with some grant writer positions, possibilities and costs and stuff like that. Um, as you can see in Matt's, um, report, it's roughly— we do have $90,000 set aside annually within the city manager's office budget for budget or for grant writers. That any department can use throughout the year. As Matt looked at it, a salary range for a grant writer, a full-time grant writer, would burn around $99,000 to $157,000 a year. That's salary benefits and all the other stuff that would be part of that.

Also within his manager's report, Council Member Bradbury had asked for an update on the redundant IT study. Telecom and IT have been working together and deciding what's redundant, what's not, how they can work together, what telecom can do for IT and what IT can do for telecom. So I think that relationship is going well, and I think they're on the right path in regards to that. Also within the manager's report is a Creek Street bathroom survey results, which Public Works had sent out in regards to get some ideas in regards to what citizens and businesses are looking at. It was a pretty good turnout.

I believe we had roughly about 213 total responses, probably 214 different opinions, but I think we got some good information out of that. So, good, good. Better than most. Yes, Jay. I don't know whether the Assistant City Manager can answer this question, but regarding IT and telecom, the feasibility study.

I mean, we keep hearing it's going well, it's going well, it's going well. Has there been any consensus of what is being replicated and duplicated? Do we know anything? Oh, I mean, we keep hearing it's going well, going well, going well, but where is the facts? So within that report, I mean, I think some of the redundancy that we've, we've figured out is just the install of, uh, fiber network and everything else like that.

IT was running their fiber, telecom was running their fiber. They agreed that telecom should be running the fibers for networking and everything else like that.

I don't know, I can't, I can look into it, but I personally at this point in time can't say anything else really that's been redundant. I don't think they're finding a whole bunch. I think it's more of, as I believe Manager McLaren stated in his report, that At this point in time, there's really no reason to reduce staff or anything in regards to that. I think it's more of just kind of jobs that each one have been doing together at separate points that one telecom could do instead of IT doing and vice versa. So, and hopefully we're going to get into some better efficiency and, uh, you know, definitions and guidelines in terms of how we manage that.

The interaction between—. Correct. Yeah. Good. Yes.

I just wanted to state or ask a question on that redundancy study. You know, everybody's mentioning FTEs, but I know one of the big things was looking at the actual CIPs and the projects and those contracts that we have externally and looking at any cost reduction by keeping it in-house versus going out of house. And doing that analysis. I think that's where this started, but everybody seems to be focused on FTE. I noticed in the report as well, which is not a focus of the program or the redundancy study.

So I'm just curious to know if we're actually looking at the cost of services. I can, I can look into that.

So anything else?

Um, council committee reports? We do have a Port and Advisory Board report, uh, Councilman. Yeah, your honor, in my report I had mentioned, uh, concern came out of the meeting that the boat float where these vessels dock on the outboard outside, there is no protection. I don't know whether this information is, well, from this year or last year, that two people hit the drink because there's no protection. So I'd like to have four hands to direct the Ports and Harbors Director in conjunction with P&D engineering to see that we can find a railing to protect people from falling and be the city getting sued or result in injuries and death.

Um, yes, go ahead, Mayor. Um, Council Member Mattalian, we did do— we did get a report from P&B in regards to that. Um, they do believe that it is safe and everything else the way it is currently, and a railing is not necessary. Um, what P&B stated was, um, Based on the review, potentially applicable codes, including building code, OSHA, and ADA requirements, and the internal discussion with our owners here at P&D, we are not able to identify any code requirements mandating guardrails on the float. The closest provision they found is the building code requirement for guardrails where fall heights exceed 30 inches.

The float has a design freeboard of 18 inches, so that requirement does not appear to apply.

But just to follow up, the concern of the boat users that take on guests is that people are taking pictures, they're not looking and falling into the water, and that could turn into a catastrophe.

Well, I guess I'd be concerned about the liabilities. Yeah. But those liabilities are drawn up in the contract for the use of that float. There is no contract for the use of that float. Okay.

So it's a loading/unloading zone for tourists. Any boat can use it at this current time. I mean, I can't speak legally and liability-wise, but I think a lot of that responsibility would be on the tour operators, making sure their passengers get on safely and are paying attention. I think we should review this. Yes.

Does that float have a safety ladder on the actual float if someone falls in so they can get out? I would believe so. They all have them. Yeah. And another concern with that in regards to the port is depending on where we put the rail, people tie up differently.

Um, so everybody's going to have to tie up at the exact same spot. You're going to lose space with them too if you're trying to get 3 or 4 different boats in there and one big one's in there. So that's some of the concerns that the Port Harbord Structure has as well. So thank you. Yes, we don't have any rails on the whole dock.

Yeah. Yep.

All right, uh, City Clerk's file. Uh, nothing, Your Honor. City Attorney's file. Nothing, Your Honor. Future agenda items.

Your Honor? Yes. So, um, this week I read a lot. I read something in the paper about data centers. I received a bunch of calls about data centers.

Um, I don't recall seeing anything about that. Has that come before us? Has we been provided any information on that? I think it would be important now that people are They believe that the mayor's moving forward with data center, so I think it might be a good idea for the rest of us to maybe know what the heck, what that entails. I think we can come up with a, a report for the, the council on that, but the reality of it is, is there's a customer that wants to put in a data center and they requested information from the utilities, both electrical and telephone.

In regards to our ability to supply power, telecommunication, and water. Because these data centers, at some point when their air cooling systems can't manage the outside heat, then they kick in a water heat exchanger to provide that cooling. The project was brought forth through AEDA. The state of Alaska in regards to housing a test operation on the shipyard property. They identified a plot of land out there.

They worked with the contractor. They've hired local contractors for design. And my understanding is it would be a half a megawatt plant— data center. I don't think they have the room on the shipyard to fill out a full data center, but this is their test process to see how it works. The company will pay for all the appropriate upgrades, construction, and stuff like that.

The shipyard will not be responsible or involved in the land lease. That'll all be through ADA itself. For the utilities, on the electrical side of it, if this thing is a half a megawatt, so that's 5,000 kilowatts, and if you use like a penny above the residential rate, this is a half a megawatt load 24/7. It'd be over half a million dollars worth of revenue, I think, off that.

Operation, roughly. Yeah, but I guess this is for the discussion, but I guess I'm curious about the maintenance and how it all works. So if somebody has some information, we can certainly get you some reports and data on that sort of information. I think that the company would do that, but it's fairly benign sitting there running 24/7. And they're required to do all the maintenance on it.

It will have a blower and a fan on it, so they talked about the noise level, and in that industrial area, um, it's a very— it's, it's a, it's a small load noise from what I understand. But, um, yeah, we'll get some information on it. That'd be good. Awesome. And I have one more request, Your Honor.

Um, I know that we provide a special rate to the shipyard, and my With having raised rates for all of our citizens, I'm wondering if we can look at that contract. We should be able to raise their rate in accordance with what the rest of us have to pay, I think. Yes, sure. We are currently looking at that and trying to see if we can renegotiate that at this point in time. Okay, do you know when you'll have some kind of an answer for it?

I believe we have Raph Tellis looking at it a little bit right now, but It's all going to depend on ADA if they want to open up that contract and renegotiate or not. So, and the contract isn't with the contractors, with the Alaska Industrial Development Association. When it was written, it was transferable, but that doesn't mean that we can't go in and renegotiate. When does it end? I was just about to say, it's a 30-year contract.

I believe it's 2035. Yeah, we just love the '30s and the '20s, because everything inside here decade. Anyway, we'll work with them on that. Judy, answer your council member, um, sorry, we all have it. I'm glad I'm not alone.

If ADA were to lease it out to anybody other than a shipyard, that sales agreement would cancel. But as long as it's a shipyard, that sales agreement is transferable. Okay, but there's nothing in that contract that says, you know, we're going to raise the rate every however many years? It's that rate for 30-some years? No, it's rates— it's redeveloped every year, but it's based on Seattle and Portland power and lights, which is going up, which has gone up.

But I believe Portland kind of revamped how they do their industrial rates, so So that's kind of affected us a little bit as well. So yeah, and I think that we got to look at changing conditions too. They're going to ban that shipyard. It's outside of the— they'd have to renegotiate for that too. I'm going to read Council Member Zingy's mind here and ask, why in the world is our shipyard based off of Portland?

It was to be competitive. It was— yeah, I would imagine it's to be competitive with them down there. Um, so instead of them going to Portland or Seattle, they would come here. It never worked out. Follow them up, I guess.

All right. Yeah, just a couple of comments on this tough Raider topic since we like to debate things in future GenCon. But, uh, I do want to take that since it was— since the D-word, data center, was brought up, I do want to take a moment to address it. And I think we I generally am very in favor of economic diverse development, diversity, trying to find new areas of revenue. Generally, I side on the less regulatory side, but also we do have to hear, listen to our people.

And this issue, probably only second to the rate increases, I've been hearing from more people on almost any other issue, and people are very, very concerned about it. And I'm glad that there's going to be a report because a lot of people are unsure what's going on, but they hear data center, and I share some of those concerns. A lot of people's red flags go way up. So we just need to make sure that we're doing our due diligence, that we're keeping an eye on things and, uh, making sure that this doesn't turn into something we don't want to turn into. Because with this AI world world going on.

There's a lot of benefits to it, but I'll just say we need to be very, very cautious and, uh, careful. I'll see if I can invite the principal down to do that. Yes, besides the electric, I'd like to know what the impact to our water would be. Yeah, all those great—. Yeah, I'm also curious if, if that's going to be on the shipyard, if even though the contract for the shipyard is 2035.

If that would be something we, we can negotiate, or would it— would all wrap in—. Data center falls outside of the shipyard's contract. There'll be a complete separate—. Okay, that's what I'm talking about—. Discussion.

Yeah, that's not part of the shipyard rate. Um, Mayor and Council comment. Abby.

I'm good today.

Jelly? Um, I don't have anything. Judy?

No, I don't have anything. Dick? No. Jay? Yeah, thank you, Your Honor.

I'd like to thank, uh, Senator Stedman, Representative Bynum. They put in $18 million in the budget for electrification. $9 Million for Juneau and $9 million for Ketchikan, and there's a very good chance that it's going to be passed and that money will be awarded to us. Both Representative Bynum and Senator Stedman have worked very hard on it, so I'd like to thank them for that. Thank you for that, Jay.

Miley. A few things. One, with the season kind of in full swing now, more and more people. I think we have to give consideration to our citizens who are expressing concerns.

For a number of years now, sitting on this body, I've, you know, you hear things, you hear complaints, you hear people's thoughts on the tourism, and now it's getting a little, it's getting a little overbearing or a little too much. But it's— people are really starting to have some valid concerns now. And it's been interesting, you know, over this last 6-year period that I've been on here, 5 years, we went through COVID, which was unprecedented. There was no cruise ships. There was worry that the numbers would never come back to what they were.

Obviously now we're way beyond that and increasing every year. And I do feel like we get a little caught up sometimes where it's like, well, you know, with the borough and the city and CLIA and all these different groups, and we kind of go— I myself think, well, maybe, you know, down the road we'll talk about it, and nothing ever comes up. But I will just say this, uh, at one point the idea of limitations were brought up on numbers of passengers or numbers of ships or any way to do, for lack of a better term, regulate it. And it was like, well, that would be almost impossible because the itineraries, and it would screw up all the different itineraries of all the ships, and it would be undoable. Well, now in some form or another, other communities in the region are doing it.

I understand maybe that the way they're doing it may not be the best way, but the fact is other communities are doing it. The ships are still figuring it out. The The people are still coming in huge numbers, and I, I have to be honest, I feel like we're, we're at that point. Uh, it's just grown and grown and grown, and our town hasn't grown to keep up with it, our infrastructure, all the things we always talk about. So, um, I don't know, I just think we need to start looking a little more seriously at our tourism and how it can be more sustainable.

Um, I've heard people who are familiar with other regions that have been heavy in tourism, how it grew and grew and grew, and it did get to a point where it's no longer considered a desirable location, from what I've told from people from those areas. So I don't want that to happen to us, and I just think that we're at that point now. So take that for what it is, but I think it's time we start looking at that. I appreciate that. Thank you.

Um, Jack. Thank you, Your Honor. On a Tuesday morning, wearing a different hat as a board member of a nonprofit, uh, organization, I got to join a meeting at Pioneer Hall regarding some of their planned redesign for the building itself and for Pioneer Alley. And there were representatives there from the Public Works Department, from the Police Department, from the city manager's office, and it was just Really nice to see that kind of engagement from high-level employees of the city working with nonprofits who work directly in our neighborhood. And it was really just refreshing to have a conversation like that that involved city staff in the shared interest of improving our community in the best way possible for visitors and residents year-round.

So, just wanted to speak to that because I thought it was great. Thank you. Um, yeah, it's been a— A busy week here downtown. You see all the actions and motions moving around. Um, glad to see DOT is off the bottom of Deermont.

Uh, that traffic is now flowing. It's a, a nice, uh, transition, so that's working out. Um, baseball— the kids are doing good. School will be out soon, so I want to make sure people watch it while they're driving through residential neighborhoods because there's going to be a lot more kids on the street, which is, um uh, of interest. And, um, talking with the fire chief, I want to make sure everybody is, uh, uh, thinking fire safety, fire alarms, uh, exit plans.

Uh, we've had some incidents in the community that are very sad and, uh, potentially, who knows, preventable. Uh, but, uh, we want to make sure that we keep carrying that message to the community, and I asked the chief to to work on a program to get started again. I know they have ongoing stuff, but we need to make some blitzes here. We're getting a lot of calls lately in that regards. Um, but I love to see an active community working hard.

I hear less complaints because people are working, making a living right now, and they're out doing things. Without North Cove, that operation is is growing out there. The investments out there are very obvious, and as well are the ones in the community. There's new stores going into the community all the time, which brings more revenues. I've asked maybe that we start looking at— I think we did a study on, uh, City of Ketchikan providing business license so we can track what's going on with our businesses.

And, uh, it's an idea that I think there was some work put in by the clerk's office. We have some background information on it, but I think it's something that's worthy of us looking into. As we look, uh, at the tourism committee, we'll get a better understanding of what the businesses are in the community and what you're doing through that business license. And in the past, we've had some individuals that, uh, or businesses that have failed to pay taxes, maybe haven't met fire codes, all that kind of stuff. And a business license is one of the means that we can bring them into compliance.

And it doesn't have to be expensive. It could be $2. But it might be a worthy option to think about. I think we have to revisit in some manner fees for the bus traffic coming into the Ketchikan and Ward Cove area, a minimal fee so we can start tracking and see what those impacts are. I know that talking with DOT, a lot of the traffic from buses is— it doesn't necessarily break the asphalt, but it breaks down the sub-bases on because of the point loading on those buses.

And so, and we'll have some of that on our own streets in town that we'll have to be looking at. So there are definite impacts. There's a way that you have to facilitate that, to make it fair and reasonable and not getting a big wound-up thing about, uh, independent visitors coming in on airplanes, stuff like that. But we've talked about it in the past, and I think it's something that hopefully the Tourism Advisory Board will meet and get information on and bring back to the council. We're a growing community right now, and we've grown to the point we are with very little management of traffic and access and pedestrian.

And I think that we need to develop that plan, pedestrian corridors, whatever it may mean. But I think we have an opportunity to improve the situation for both the residents and the tourism groups.

I thank the council for all their work, and now we have Um, executive session. A request for an executive session to review the candidates for the vacant city manager's position, uh, for the city council. Your Honor, yeah, and city council takes action as determined appropriate regarding offering the city manager, general manager position to a finalist candidate.

I have a second.

Any discussion? Hearing, seeing none, Madam Clerk, would you please call the roll?

Zingy? Yes. Bradbury? Yes. Matani?

Yes. Finnegan? Yes. Yes. Yes.

English. I thought you did.

I did too. No, you stopped short. Okay, I'm sorry. Okay, I move the City Council declare consistent with the Acting Assistant City Manager's memorandum dated May 14, 2026, it is the best interest of the City Council to review and discuss candidates Abner Hall, Michael Kovacs, and Mike McLaren— Matt McLaren for the vacant City Manager/General Manager position in executive session in accordance with KMC 2.04.025 and , which may involve matters that immediate knowledge of which would clearly have an adverse effect on the finances of the city, and discussion of subjects that tend to prejudice the reputation and character of any person, provided the person may request a public discussion. Thank you.

And then we'll accept it. Any further discussion? Thank you, Mayor. Um, with that, Madam Clerk, would you please call the roll? Okay, uh, Gage.

Yes. Zingy. Yeah. Poose. Yeah.

Johnny. Yeah. Sorry. Yes. Yes.

Finnegan. Yes. Bradburn. Yes. Your Honor.

Yes. I move the city council offer the position of city manager, general manager, to Abner Hogue and direct the staff to enter into negotiations for contract terms and conditions acceptable to Chair Council. Second. It has been moved and seconded. Discussion?

Um, I thought, uh, thank the council for their attentiveness, and they had, uh, very honest and open conversations about, um, the, the candidates as a whole. And so I really appreciate the time that they put in. This been a long and arduous endeavor. So with that, with no other comment, please call the roll. Madani?

No. Gass? No. Finnegan? Yes.

Bradbury? No. Gage? Yes. Zingy?

Yes. Poose? Yeah. That passes 4 to 3, Your Honor. So with that, we have another motion.

Adjourned. Any opposed? Hearing and seeing.