Seward: City Council Work Session 10/26/2026

Hey, we're streaming to YouTube. Ready when you are. Okay. It's 5:30, and I'll call this work session of the City Council to order on whatever day this is, the 26th of October. Um, this is a work session, so, uh, we're going to be looking at the budget, and I'm going to turn it over basically to the city manager to guide us through tonight's work.

We'll have to finish by about 10 to 7 tonight because we do have a regular meeting. Also, just for the public, at a work session, we can't— we aren't voting on anything. It's just strictly a work session. So there will be time at the— after the presentations, there should be time for audience input and questions too. So I'll be watching the clock.

Okay, Madam City Manager, you may begin. Thank you, Madam Mayor. First and foremost, I want to thank everybody for being engaged and involved in the FY 27-28 budget cycle, and a big thank you to Sully and James, who did a lot of work behind the scenes to make what we'll be presenting to you tonight possible. I do have a slide deck that has been shared via e-notifications and will hopefully be up on the screen in mere moments that kind of runs through the proposals that the administration, aka us, are bringing for— bringing forward for the FY '27-'28 budget. And two things to note, um, the— or three things to note.

The slide deck is divided up into three different sections, and the first I'll run with you through tonight, which is basically the revenue and expense stream of the general fund and some of the changes that we're proposing be made in that general fund. And when you think about the city's finances, the general fund is the general day-to-day operations that are being run by a city: IT, my position, finance, fire, police, all of those things that don't bring in revenue but take expenses, and that's also funded by the revenue we bring in from tax dollars. So the sales tax, which is the number one driver of revenue in the city of Seward, property tax, and then a variety of other transfers and income that we receive through the general fund. And so we'll start tonight by going over the general fund revenue and expenditures and some of the changes we're recommending there, And then the second part of the slide deck and the third part of the slide deck are breaking down the general fund expenditures by department. So we'll have each department head come up tonight.

We have Danny and Dustin from Community Development and IT and also my department to talk through the different expenditures and any questions you may have as a whole or by line item for those departments. And then we'll do that for each general fund department, and then we also have a breakdown for the enterprise funds. And the enterprise funds are different from the general fund because they bring in revenue on their own. So that's like electric, harbor, wastewater, parking/campgrounds. Since those bring in revenue, they also— we still approve and do their expenses, but they're not utilizing general fund expenses.

One thing to note about the enterprise funds, they do do transfers into the general fund for administrative fee and PILT. And those are, those are to cover the general day-to-day things that we as the administration, as the city as a whole, do to support the general fund. And that's broken down by a formula that takes into account the full-time staff and the revenue that enterprise fund brings in. But now I'm jumping ahead of myself all the way to the end of the slideshow about enterprise funds, and instead we'll start with the general fund. And so to rip the Band-Aid off and talk through what the proposals that we're bringing forward to you tonight and in this budget.

The biggest one is the seasonal sales tax, which will increase our revenue to the City of Seward and allow us to do a drop of the property tax by $1 mil. And we're also proposing to shift the campgrounds into the already existing parking enterprise fund. And so we'll start just looking at the general fund at a glance. And so FY25, you'll see here compared with FY26, and then we have FY27 and FY28. And these take into account the revenue and expenditures that we've laid forth in this budget.

And so if you look at FY27, you'll see that yellow is a pretty big gap in comparison to the other two years. And that's because we're gonna treat FY27 as a bridge year. The sales tax will stay the same at 4% year-round and the mill rate will stay the same. The campgrounds will become its own enterprise fund and will have a larger campground and parking transfer to cover the gap that doesn't exist yet, um, with the increase in revenue that the sales tax would bring in. So you'll see that net transfer fee is about $3.8 million in '27, and then that drops to $2.5 million in 2028.

Which indicates the move to a seasonal sales tax, which would be 0% in Q1 and Q4 and 6% in Q2 and Q3, as well as a $1 mil property tax reduction. This would equal about 3— it would equal 3% on average across the year for year-round residents on their sales tax rate, and it would also allow the sales tax to drop to zero at a very, um, high cost of living time of year, January through March, and then October to December. And then those— that campground and parking transfer would return to prior levels, coming back down to a more sustainable rate for that fund. And so if you look at FY27, this is the revenue fund by source. It would bring in— taxes would bring in about $15.39 million, which is a drop from the FY26 budget of 6.2%.

And that transfers in would be about $4.9 million. One thing to note, if you look back at the previous one, the transfers are $3.8 million into the general fund, but here it's $4.9 million. They are— that includes the annual transfer to the Providence Mountain Haven rather than the general fund because we bring in revenue via sales tax and transfer that over to Providence Mountain Haven to cover both depreciation expenses and capital infrastructure for the hospital. So that is $1.1 million in both years. So when you see the yellow is not equivalent to the yellow that you see on this slide, it's because it's not taking into account that $1.1 million to the hospital, which we own.

FY '28 revenue by source, you'll see that big jump on the blue from $15.39 to $17.16. And good thing Chris changed the batteries in this little clicker, 'cause I'm going back and forth. And that is an increase of 11.5% over FY '20. 7 To overcome that gap and break down that barrier that we had that filled with the parking and campground transfer. And that returns to basically the prior campground revenue levels because one of the things we wanted to make sure to do as we shifted the campgrounds to the Enterprise Fund was that we weren't then subsidizing, we weren't then punishing the community and ratepayers by filling that gap in the general fund with additional tax revenue.

So we'll be transferring that in still, but the campground and parking becoming an enterprise fund just adds a lot more transparency to that fund and showcases how much people are bringing in annual— or how much we're bringing in annually via the campgrounds and parking. Okay, so why do we need to increase revenue? I'm going to take a sip of water.

Um, first and foremost, costs do keep rising. Heating oil and nearly everything else across the board costs more money. You may also remember this year we took on the financial asset of leasing a new community center from the borough. The city took on that former middle school space with new costs and no new revenue. We have future plans to bring in revenue, but it's a slow start and we need to cover those costs now.

We also are now subsidizing the pool and the pool manager position at the school district, and so that costs about $200,000 annually. So that can stay open for the community. We also do anticipate that shifting as pool revenues increase, but it's not going to be drastically, and it's not going— we still need to have that funding on the other side of this. The next question you may ask is, why can't we just use the campgrounds fund beyond 2027? The FY27 transfer that bridges the budget bites in the campgrounds and parking revenues too much to do that.

It does not have the cash flow to sustain that size of a transfer annually, so we're using it as a bridge, not a sustained revenue source. A new sustained revenue in the form of a seasonal sales tax lets the city fund these costs without reducing any services to the city residents and increase the revenue to invest in capital infrastructure in our city, including the hospital. And it also allows for a $1 mil reduction in property taxes for all property owners inside the city of Seward.

So what does moving to a seasonal sales tax in FY28 look like? First and foremost, through fiscal year '27, so starting January 1st to December 31st of 2027, everything will stay the same. In the— on January 1st, 2028, the proposed winter rate will take into effect, which is 0%, and then for that summer from April to September 30th, it will increase to 6%. So what stays the same? The borough sales tax is not touched, so you won't have a total 0% sales tax in the winter.

It'll just be 3% rather than 7%. Also, the $500 cap on taxable purchases, trips, and lodging will stay in place as well. So it's not an incremental increase, it's an increase in sales tax on the first $500 of any purchase. Beyond $500, the sales tax does not increase at all, and that's something that's maintained by both the borough and the city. And as I said and will repeat multiple times, FY27 stays at 4%.

And so what does this mean for residents? A lot of repetition here, but I really want to drive home some of the points of why this is something we're considering And it drops the average city sales tax to 3% across the year, lowering what a year-round resident pays, and the sales tax drop when heating and cost of living are highest, and it allows a $1 mil property cut tax in FY28. And so that lays out a little bit of what that looks like. Why not start in 2027, you may ask? Can you tell that I practiced this like 15 times?

You, um, you may ask, visitors plan a year ahead. I know that there are some seasonal owners in the, um, audience that would say, well, what do I do for the customers that are coming in 2027? We wanted to mitigate that, um, debacle by pushing the 2028, um, pushing the start out to 2028 since so many bookings and plans are made at least a year in advance. This also gives local businesses time to update their booking and payment software, to build the change into their prices, and most importantly, it gives the United Peninsula Borough, who collects all of our taxes for us, the lead time to prepare and update its system. And like I've said multiple times, the FY27 larger transfer will help bridge that revenue gap from 2027 to 2028.

And so what did the community tell us that led us to making this decision? You'll see here we did a survey across the summer. Sully and I stood out in the Fourth of July festival taking some survey results. And one of the questions we asked was, would you support increasing, maintaining, or reducing city services in the upcoming budget? And 84% said they wanted services increased or maintained.

We then asked, which revenue option would you be most likely to support? Together, tourism-related taxes and seasonal sales tax drew 62% of respondents. Residents really favor revenue from visitors, and those— that's the top two there, higher tourism and seasonal sales tax. Why did we choose a seasonal sales tax? One, it spreads the impact, distributes the cost across seasonal tourism industries as a whole rather than a focused bed tax.

It allows visitors to share the cost. It brings in revenue from people who are staying and lodging outside of city limits or living outside of city limits seasonally, still use city resources. It shifts the burden from year-round residents to seasonal visitors without— within our existing revenue framework. And something to think about is right now we live in Seward and the, the population is significantly smaller and it's less busier than you may experience on a July day. But on that July day, our infrastructure is the same as it is now.

So we have to maintain infrastructure to meet the number of people that we see on our busiest day, not the number of people that we see on our lowest day. And so those visitors make up that busy day, so this is shifting the burden to them rather than year-round residents to maintain that high level of infrastructure. It also allows us to lower the property tax, which, um, the added revenue brings that down. I'll repeat multiple times, the borough sales tax will stay the same. So some things to consider A lot of this is repetitive because I do know things can get lost in the sauce, but something that many people may not know happens to your sales tax already in the winter is that borough exempts groceries in Q1 and Q4.

So if this were to pass, groceries would carry no sales tax in those months. Also, the, um, $500 cap would stay the same under this proposal, and one thing administration would bring forward as a companion ordinance to mirror another borough ordinance is to not tax the credit card fees that you'd see on a bill. And so one of the things that we've heard is, great, increasing taxes by 2%, that'll just increase the credit card fees that we have to pay. And these are from the businesses, some of that feedback that I heard. And so I did some research and realized that the borough does already exempt credit card fees passed on to customers.

And so we would bring in a companion ordinance to mirror that so that we're not adding that 2% charge onto the small local businesses of Seward. And then this is kind of a— this is a chart that shows why we went in this direction, because you'll see that very, very often every year, we see a very predictable chart of our sales tax history. And so Q1 and Q4 consistently bring about $20 million, while Q2 and Q3 bring in exponentially more, and that's in our peak season there. We haven't received final Q3 numbers yet, but I'm excited to see that and anticipate them being similar if not higher. If the, if the proposal goes through, we'll see the revenue jump from $8.7 at 4% to 10.9%.

And then you kind of, if you look at this last one and see that shift that we see annually, it brings into mind the risk that this would put on the city of Seward by solely focusing our revenue on this season. But my argument for that is that we are already doing that with that drastic amount of change over time. 20% Of our sales tax is collected in Q1 and Q4 while 81% is collected in the other two quarters.

So yes, the seasonal sales tax makes the general fund more reliant on summer tourism, but in practice we are already there. This is just allocating it to follow the season more. A weak summer would have a larger effect on revenue, but we're hopeful that this shift makes year-round life in Seward a bit more affordable while maintaining the quality of services residents expect to bring that graph to a more— it's— I don't think it's ever gonna be flat, but a more a less Mount Marathon-esque steep curve for sales in the winter months. This is just a nice little breakdown of the FY27 versus FY28 revenue that you'll see, kind of just repeating a lot of the same things that I've been mentioning about the transfers in for the Enterprise Fund and the jump in taxes. Looking to see if there's anything else I want to highlight here, but no, all of the other revenue lines are either flat or increased by CPI.

And you'll see— oh no, our expenditures aren't there yet. So one of the big changes too, outside of the seasonal sales tax— I will take a sip of water. I also just realized I don't need to narrate when I'm taking— drinking water, but that's okay. One of the big changes that we have proposed in this is that the campgrounds become an enterprise fund.

And for transparency, this would move campgrounds from the general fund to its own enterprise fund, and the general fund then falls about $1.63 million in revenue. It is replaced by an annual transfer from the campgrounds and parking fund to make up that difference. This transfer is something that we were excited about putting together because it gives us an opportunity to showcase the ways that the visitor industry is positively benefiting the community. And so if we directly tie— we we directly tied this transfer with a variety of the different public services the City of Seward provides outside of general services, and that includes the pool, the after-school childcare programs that we fund, the senior center, community sports and recreation facilities like the community center, the volunteer firefighter and SBAC stipends, and then a small percentage of police, fire, and library services. And so that was our kind of hope of being able to showcase through, um, what line items the campground is covering, the different ways that Seward community is investing in the community around us through the immense revenue that the seasonal tourism brings.

So the FY27, like I've stated, is larger in later years covering expenditures for the season and decreases to match.

So the other big thing that a budget season allows us to look at is the general fund balance. And by policy, the City of Seward is required to have 3 to 6 months of general fund balance— or 3 to 6 months of expenditures in the general fund balance to make sure that if there was anything that ever happened, we could cover a few months, or 3 to 6 months of expenditures before before— I don't want to say catastrophe, but I don't want to think about what that would look like. But it is policy for us to have those 3 to 6 months in there. Historically, since my time at being in the city, we have had about 7 months at a time. 6 To 7.

More 7. 6, 7.

So— So in FY25, it was 6 $6.61, and there's a fine line that a city should walk here between being prepared for the worst but also being like Smaug from The Hobbit of hoarding that cash, especially when there's a lot of capital infrastructure that we should invest in in our community. And so you'll see here we are proposing to bring that unassigned fund balance down to about $4.76 by the end of FY28. And that doesn't mean that we're proposing a negative balanced budget. It means that we are proposing about a $900,000 transfer to the capital acquisition funds, specifically for sidewalks and streets and other things that are necessary. And in— and then in 2028, a $472,000 transfer to that fund as well.

And so that's a direct investment in the capital in our community and kind of bringing that fund balance and unassigned reserves more into the middle of the 3 to 6 rather than above the 6.

How we built the budget. I think this is the last slide. Oh man, it is. Okay, so these are some of the thoughts and things that we put into the budget process specifically for expenditures this year. And one of the things we, as, or I directed all the department heads to do this year was a quasi-zero-based budget approach.

And a zero-based budget approach is you take the history of what, or you take what your department does and you allocate the expenditures that you'll utilize. Historically, our budget was built by adding in a CPI increase annually. And so using this mixed approach, we had department heads review their budget line by line to make sure that every dollar is necessary, and more importantly to me, that it sits where it's actually used. So you'll look at the budget and you'll see maintenance, operating equipment, operating materials, and I really wanted to make sure that the department heads and all of us here in this room understood what each of that line was and what we were allocating towards it. So that we can have a more informed discussion and make sure that those things are landing where they're going to land.

And then as always, and almost with any organization, personnel is the biggest driver this year, and we are planning and budgeting for full staffing of 105 full-time positions. And I will say that this is probably the first year in a budget cycle in a very long time that we are budgeting for full staffing, and I'm excited to do that. The City of Seward employees are our most valued expense, and it's the people who keep this city running. So a big thank you to all of them, and very excited to budget for full personnel. I will say Butch is not here, but it does impact his expenditure to have a full staff of new police officers, which we will see, I think, on Friday— on Thursday.

So those are the general expenditures. That we propose. I'll also add for personnel, it's driven very much by our collective bargaining agreement that we have with the union, so that's a really good way to make sure that we have that locked in. What we did add and what we have changed for this year is the addition of 2 new positions, and the positions that we've added are an IT technician, which would support technology in every department across the building, which definitely helps free our IT director up to do more of the high-level things that I would like him working on pretty consistently, like cybersecurity and the different federally mandated updates that we have to do for the City of Seward and our website. If you remember, I think it was about a year ago, we had all the department heads come in and talk about what their department does, and in that presentation, Dustin and pulled out a number of how many tickets he responds to on an annual basis, and it was very, very, very high.

And so spreading that out a little bit with an addition of a new IT technician, especially as we're adding a building and more scope, is very important. We also have been adding a lot of new streets from recent housing developments and an additional new building as well. So we've incorporated a maintenance and street worker that would do about half time dependent in the maintenance realm and then half time in the streets realm, kind of dependent on what the weather is like. If it's a big snow year, there'll be more in streets in that winter. If it's a big flooding year, there'll be more in streets.

But one of the things we really want to mitigate and work on is the maintenance of all of our buildings and having a dedicated person to that. We have a lot of old buildings in the city of Seward, and we also have a new younger building, still 20 years old, in the middle school. And while we're not responsible for the overarching HVAC and roofing systems of the new community center, we are responsible for day-to-day maintenance. And a building is only as good and as valuable as the care that you put into it. So we want to make sure we have somebody dedicated and on staff to do that.

We also have funded a police sergeant position, and for the next two, it's an interesting An interesting thing that we as a city have to manage is the PERS termination. So if you get rid of a position at the City of Seward, it's very hard with the state to say, hey, we're canceling this position because of the backpaid years of PERS, which is the retirement system. So if you look at a position and say, hey, I want to cancel this, there's usually a PERS termination and fee and cancellation study that goes with it. So often what we want to do is find ways to repurpose that position, and so by statute, as long as the job is within 50% of what the original scope is, you're able to repurpose that. And so for the police sergeant, we have repurposed a former corrections sergeant position which was unfunded when the jail closed, and this gives the police department a day and a night Sergeant.

So currently we have just one that manages 24 hours a day, 7 days a week, and that was a little bit more doable when we didn't have much staff in the police department. But now that we're having more staff, more younger police officers that we're training to be longtime good police officers in the city of Seward, we've really found, um, the need there to have a shift sergeant to meet with and focus on each individual. Shift that they are responsible for. That way, a police officer doesn't go 3 to 4 weeks without seeing their direct supervisor. And it also helps us avoid that per cancellation fee.

We also have repurposed a position. Sully and I and our departments have merged together the front desk and the executive assistant position into one position. And rather than keeping that position in finance or admin, it's going to be very useful over at the department— over at the library now that the library is open 6 days a week. And so we've struggled with a little bit of overtime in there or missed hours or basically extended overuse of seasonal employees with certain seasonals coming back time and time again, effectively being year-round employees. And so this position is a way for us to repurpose an already existing position that's already been budgeted for, but allocating it in a department that it would be more useful in without any additional costs in the general fund.

And then last but not least, we did incorporate about $30,000 to hire a part-time, non-benefited position in Sports and Recreation for custodial services at the new Community Center, and that's to maintain all of the community shared spaces that we have up there and help with snow maintenance and things like— or snow removal and things like that, just so that we can make sure that that building once again is being well maintained in the long run. And so that is my spiel on all of the big changes and revenue adjustments and all the crazy things we're proposing on a revenue side. And the small details will be more for the individual departments. But I do want to take a second before I invite Dustin up to see if you have any questions on that first bit before we go into individual department detail. Okay, questions for City Manager?

Oh, Councilman Pogrebin. Ah, we're at 105 employees. Yeah. And I just Googled Palmer. And they have 50.

Homer does not have a Parks and Rec Department. Homer does not— what else does Homer not have? An Electric Department. Homer does not have a— there's other things too. There's like one employee in their Parks and Rec Department.

And so I think, yeah, you said they had 50? Seward has 50. Seward has 50 too, yeah. The question is, it doesn't seem like it to me. I guess the question is, how do we know when we have too many?

How do we know when we've overdone it? Yeah, I think that's a great question. I think too, if you look, go back to kind of the statement of our community has to maintain and be ready for the largest day of the year. So while we have a level of employees that are at like a seasonal— like if we had a department right now or a city right now that was staffed for the people that were in the community city of Seward right now, we would have a smaller city of Seward staff. But on the flip side of that, we have to budget for and provide services for the biggest day, like a July day, so that increases it.

I also think we take on more departments being on this side of the peninsula than Kenai or Soldotna or Homer. Sewall Datna also doesn't have dispatch. They don't have a fire department. They don't have a harbor. They don't have an electric department.

They don't have— they do have a cool new sports and rec building, but there's— we do everything. So in the other side of the peninsula, they can rely on the borough. They can rely on Kenai-Sewall Datna to share an animal shelter. So that's a really good tool for them, but we don't have that. So I think there's a point where you're like, oh yes, it is too much, but that's also when you've reached the growth of the city.

There's nothing in here that we're proposing with the addition of, um, employees. It's actually probably a decrease still because the jail has been closed now for a few years. But yeah, it's a— that's more of a philosophical question than one I can answer right now. But I would say if you do apples-to-apples comparison with other communities on the peninsula, it doesn't work because of our distance. Does that help?

Yeah. Questions around here? No? Just one kind of question. Excuse me.

Thank you, Madam Mayor.

On the transfers to the general fund from the different enterprise funds, is there— there's a specific formula for that? It's based on what? It's 70% of the revenue of the department and 30% of the full-time employees. So the larger your revenue and the more employees you have, the larger the general fund administrative fee will be. And so we actually did synchronize— synchronize is not the word I wanted to use— but we did synchronize those across all departments because it was pretty variable in the past.

And one of the things, if we go way into into the future, you'll see that on the electric fund, which we're not talking about this today, but the general fund administrative fee in 2024 was $1.7 million— $1.1 million. And that was not necessarily based on that formula. So we've been slowly bringing that down and then synchronized— synchronized is not the word I want— standardized, standardized that fee across all enterprise funds. So one department one enterprise fund is not being substantially impacted by an administrative fee over the other. So you'll see here from FY24 to '27 and '28, that's dropped from over $1 million to just under $700,000, specifically because we never want to be reliant on one enterprise fund completely, and we want to administer that fee fairly across the board to all of our enterprise funds.

But pretend like you didn't see that slide because that's not till Wednesday.

Okay, other questions at this point? Well, go ahead. Thanks, Madam Mayor. Just one other one, again, just the general information question more than anything, on changing the, the parking and campground to an enterprise fund as opposed to take, you know, so we're taking it out of the general fund financially.

It's gonna play out about the same for us overall once we get past this gap and that kind of thing. I just wanted to make sure that we understood, you know, you're talking about transparency and how much it actually brings, but I'm less concerned about the transparency and more about the overall financial benefit either way. Yes, so this first year, there's a significantly larger transfer because we're utilizing the reserves in that fund to be the bridge year. Then after that, it will— it'll, um, it'll go back to a size that is equivalent to the prior year's campground revenue, if not a little bit more. And so, um, or not even revenue, um, profit, because in 2027 we anticipate So the general fund charges for the 2026-ish year was about $1.5 million, and then if you take about $5 million of expenses for personnel, etc., across those departments, we're recommending a transfer of about $1 million.

So we're making sure that that's not being pulled from the general fund and then being filled in with more revenue, more tax revenue. It's just being utilized as a transfer transfer, which is different than that administrative fee transfer. So yes, we are utilizing this one more than we would say like an electric. Just the one year though. But just for that one year and then using that following years for the transfer in.

So enterprise funds, say the harbor has enterprise fund. They earn money to fund their— Systems. Yes. On the parking and campground, who, who's that, or who is that, who's, who's using that money? So the parking and campground enterprise fund is operated by Parks and Rec.

Um, like I said, we'll still maintain a transfer into the City of Seward general fund that is larger than the usual administrative fee to pay for the community services that we've outlined and provided. In the— on this slide. That will continue just to make sure that we're not losing that revenue in the general fund. There will also be additional funds in there, profit you might say, you would say, and that could be utilized for capital in campgrounds, parking, or other places. I know Mel has a lot of ideas of if that gets to a good enough spot, the things that we can utilize in that for Parks and Recreation.

So just to follow up on that, like the harbor doesn't make enough to cover its costs, nor does SMIC, right? You guys want to jump ahead slides so much. No, let's go. Yeah, so here's an interesting— the harbor makes just enough, barely, to cover their cash expenditures. They do not make enough to cover the depreciation because they have such high-valued equipment over there.

It costs a bunch of money to replace a travel lift or a SynchroLift. If you then look, the Harbors is pretty similar but not as drastic. Their cash expenditures are slightly outpacing revenue, so no, in the grand scheme of things they do not make enough. They've been very reliant over history, um, especially in the depreciation side focusing on grants from the state and the feds. This is a big discussion we had too, of like, is this the year we change that?

And it would be if we hadn't gotten the big announcement from the Coast Guard, where I do anticipate a lot of this depreciation could be incorporated in some way, shape, or form into grant monies to help, um, increase our general, um, revenue stream over at the harbor. But yeah, over time, that's definitely something that we want to steer away from, but it's not an issue that the parking at Campground has because the customer base is much varied, much broader. So I guess the question is that most enterprise funds are funding these departments, but in the Parks and Rec Department, they're going to have an excessive amount. And is this where City Manager and Finance Department comes in and says, hey, or the City Council? I mean, how do you guys manage that.

So Parks and Rec doesn't think they have an unlimited budget because they've earned more than they need? Well, it goes into a fund which is then allocated as necessary, and it's a separate fund from Parks and Recreation. So like Tony has two funds, a Harbor Fund and a SMIC Fund. Those two don't, don't overlap. Does that make sense?

So like it's And yes, it would be in my purview if a Parks and Rec director says, parking made $500,000 this year, I'm buying, like the show Parks and Recreation, I'm gonna do an ice town and this whole town's gonna be covered in ice for 15 weeks. Then why, you know, that's my job to be like, no, don't do that, that's not a great idea. Also, that fund is not yours. Money to utilize in that way. And if anything came to you all for approval, you would say, no, don't do that, that's not a great idea.

Yeah, so that— does that answer the question? Okay, okay, okay. First and foremost, let's have Dustin come up and talk through his department.

So this is going to be on page 24 of your slides. It is also page— let's find it in here— page 12 of the budgeted line items. I did— I'll rip the band-aid off for Dustin and say that his two big changes in FY26 are the additional position. We also moved all computer hardware expenses into the IT department throughout the city because Dustin and his department are the ones that order it, so he should be the one in charge of it. But I'll, I'll pass it over to him to talk a little bit about his department and the different things in his budget.

Yeah, so I'll just kind of hit on some of the highlights. And since we haven't really given an departmental update this year, I think it was last year we kind of went through and did that, so So, just kind of to remind you about the IT department, we currently provide IT support to every department within the city. So not just administration, but that's Police Department, Fire Department, Harbor, any department in the city, we support that. And I think Kat left my joke in there that I usually tell anybody that we talk to. If it has blinky lights and it plugs into the wall, we're responsible for it whether we want to be or not.

So we pretty much cover everything. So currently out of the department, we're a 3-member team. So the IT Director, Senior Technician, and a Technician. And we're supporting 100 to 105 year-round users and then the additional seasonal users that come in.

Kind of went back and looked at our 3-year average on just help desk tickets. And we're averaging charging 700 to 800 of those a year. And I estimate probably only 70 to 75% of the issues we deal with generate a help desk ticket. So you're thinking, you know, emails that we get or phone calls that we get for other things that would also be considered kind of a help desk ticket. What else are we responsible for?

You know, cybersecurity monitoring and response. That's system backups, disaster recovery planning, that kind of thing. So when we started talking about adding the new position, I was trying to think of an easy way to summarize what that would mean, and I kind of came up with the current team is fully occupied keeping the city systems functioning as they are now, but it doesn't leave adequate time or bandwidth for us to focus on prevention, modernization, and then building kind of those department departmental relationships. Having that time to focus on working with each department, to go through their kind of daily processes, and helping them, like, how can IT help you modernize those processes, or how can we use the tools that we already have in place better to, you know, make things more efficient. So the goal of adding this new position would be, one, to free up time for the entire department to have time to focus on that, not just me, but all of the staff to have more time to focus on not just putting out the fires, but how can we continue to improve our systems and what do we need to be doing to kind of future-proof and make sure we're keeping things up to date, not letting things fall behind.

So kind of like a rebalancing of the current IT workload. And then having that time to spend times with departments and focusing on their kind of day-to-day and how can we help you improve that, because that's our ultimate goal is to ensure we're giving the support to the department so they can do what they need to do. Examples of that would be like having time to maybe do a ride-along with police and fire and see— they've got new technology in their rigs, how are they utilizing that, how can we help them better utilize that, what's working, what's not working. Having time to do things like that.

So, yeah, that kind of covers reasoning for the new position. And then another big change Kat discussed was moving all computer hardware purchases into our department. Historically, that's been kind of spread out among all departments. So that's why you'll see the big increase in that line item, is because we're just bringing all of that kind of under our department to help better manage that. Some of the other big changes in line items, the software and services line item this year, you'll see it's a little bit higher, or 2027 is a little bit higher than 2028.

We just have some renewals for some storage devices and things like that that are on a 3-year basis, so those will all be hit in 2027. Line item for operating supplies, you'll see that increasing because we have kind of consolidated operating materials and operating supplies into one line item because historically we haven't really split it up that way, so it just kind of makes more sense to roll it all into one line item. Um, and then do you want me to talk about the capital? Yeah, so I'm gonna— we have a capital discussion on Thursday, but a few of those are for Dustin, so I'm inviting him to Speaker:COMMISSIONER ARKOOSH] —speak to that as well, some of the capital expenditures that we have allocated to his department that we are, I think, legally required to do. So—.

Some of them, yes. Yes. So, yes, the one that we kind of have to do due to, you know, new federal mandates and things like that is upgrades to the City website so that we make sure we are maintaining ADA compliance with the new standards. And we have to have that done by April of 2028. So we'll be working with our vendor to make some updates, add some additional services into the website so we make sure we meet those standards.

And then the two big projects there as well, we have a phone system upgrade. So I was looking through the records, this is one we've kind of kicked the can for a little bit, and the current system was installed in 2008.

And so that means the hardware is now well past its useful life. We're kind of getting to that point where we're just kind of waiting, you know, for something to break. And the systems we have now are no longer supported. So we're proposing to just do an upgrade of the current systems, so keep the same vendor and just upgrade our systems instead of ripping everything out and putting something back in. So, and then the other big capital project is the, servers in the city data center.

We did PD a couple of years ago, and now it's, it's time to do the ones on the city side. Again, that hardware is end of life. Vendor will not extend the warranty past 2027, so that means we would have a harder time getting parts and pieces if things start to break. And the new system would be similar to what we have in PD so that those are compatible and can work together.

Questions? Yeah, questions. Yeah, go ahead. Oh, thanks, Madam Mayor. Um, just a couple questions here.

The refitting— did we have to refit the community center, and is that going to flow into 2027, or is that mostly a '26 budget? It's mostly— I think we're getting most of that out of the '26 budget. So there will be some new computers going over there. Some new networking equipment. But I think we have room in 2026 to kind of get all that out of there.

Go ahead. And you're talking about cybersecurity, does that also involve security for our utility system? To, you know, because you hear all over the country where there's attacks coming on, you know, utility departments, electrical infrastructure, that kind of thing. Is that part of all that? It is part of that.

Our team We kind of support the support for that, I guess you would say. They have another vendor that kind of is the main point of contact on the SCADA system on that side. But we are slowly kind of getting more and more involved with that. And especially as the RRC and the RTO requirements expand, being able to free up some of Dustin's time so we can have a stronger involvement in that, at least to advocate for the Seward in some ways or just make sure that we are up to date is definitely something that is a priority on my end as you look at the other bigger utilities and what they have at their disposal.

Other questions? Go ahead. Just, this is really not, and I apologize, necessarily related to this, but through your knowledge, is there a way to increase bandwidth in Seward? Yeah, that's a little above— I'm not sure what the providers can bring in, if there's any more room, or if that's bringing in more fiber. Is there a priority for bandwidth, like maybe the city should get a higher priority?

Yeah, it's possible. I don't know if that's something they would offer or not. And they're doing the line in the campground, to send bandwidth to Cordova. Yeah. Yeah.

I'm like, no, keep it here. OK. Thanks, Jane. OK. Great. Thank you.

OK. Thank you, Dustin.

Next up, we have Danny. Look at that, right after another. And his department is the Community Development Department, which is on Page 14 of your line item things, and there's one thing I want to point out before Danny does jump into his department. First is— or it's just one thing. So first, we did not— some of the previous discussions we had were around adding a code enforcement officer this year as another position for the City of Seward.

And as we were kind of digging in and talking with Danny, because I told him that if we did, he would have to manage them, We talked a little bit about some of our past experience and moments where we have enforced code, and it's not necessarily worked out the way that we would have anticipated. And so I didn't propose the addition of a code enforcement officer position this year because instead I want to work with Community Development, Planning and Zoning, our different boards and commissions to make sure that the code that we have is a strong structural foundation for the enforcement of that code. I think a really good example of that is recently Danny and his team tried to— went to enforce the code that we have for political science. And then we saw how that might not necessarily— the codes we have in place might not necessarily fit the needs of our community right now. And so as we look down the line of adding a code enforcement officer, having them come in and enforcing the codes as is, I would anticipate and expect a lot more of situations like that.

Or at its worst, even a weaponization of that position because the foundation isn't there. And so as we built the FY27/28 budget, we did not include that position, but it is a priority that Danny, his team, and I are working on to make sure that we get those to a place in the next few years so that in '29 or even sooner, if the community and council wants, we move forward with proposing and bringing in that position. And so Danny only has 3 proposed staff still in his department, and I'll let him take it over to discuss the rest. Yeah, thank you, Kat. So yeah, Community Development, we have 3 full-time staff members, although we work very closely with our GIS technician, which is kind of like a 4th staff member that we meet with regularly.

Yeah, in our office, as many of you know, we work very closely with the Planning and Zoning Commission, responsible for some of the long-term planning and the larger-scale plans the city has. I know everyone knows we're working on the comprehensive plan. In addition to that, the Municipal Lands Inventory and Management Plan is the other kind of big plan, and that's the plan that outlines every single piece of property the city owns, how it's used, how we want to recommend its use for in the future. So I'm assuming once we kind of wrap up the comprehensive plan, we'll kind of jump back into that plan and see what kind of updates we need there. And obviously, GIS is kind of a third tenet of our mission statement.

A couple things that I kind of point out on our slide deck here is really not much has changed in our budget. It looks like there's a— it says a 21% increase from '26 adopted to what we're proposing in but that number is a little misleading. We have not incorporated our GIS technician's budget into our, our department budget in the past, and so we're just proposing that we move that into our budget for 2027. But if you were to take that out of the budget, it's actually about a 4% decrease in what we're asking from, from last year. And so Yeah, our budget is not that much different.

Mainly contracted services or subscriptions is kind of where we're spending money. So GIS is a big one there. We've done most of the comprehensive plan in-house, but now we're working with someone to do the design. So that would be a little bit of that budget. And then as we move forward from the comprehensive plan, we'd like to flush out a little bit of the economic development side of our mission statement in our office, which includes, you know, a tourism economic impact study, which we've been working with the Chamber on and talking to the Planning and Zoning Commission on.

We've always set aside some planning funds for continuing updating work supporting city property and any development projects that come up, or continuing to work on on the recommendations in that Municipal Lands Plan. And then, obviously, we'll continue working with Grandicus, which does our short-term rental compliance and monitoring. Another big project that we're working on is that wayfinding project, and I'll just put a plug in, tomorrow at the library from 5 to 7, our consultants are here, and so they're going to kind of show the first— their first attempt at a wayfinding system, and then we'll be doing a town tour with them on Wednesday. But if anyone's available and wants to come to the library, 5 to 7 tomorrow, I know you guys will be busy. Uh, that is funding— that, that— those funds came from the CPB funds for the design, and then there'll be another set of funds that will be the fabrication and installation of that system, which will kind of go through that route first.

Um, so we hopefully don't have to go into our contracted services. And then, yeah, I was going to mention the code enforcement thing. Our office obviously supports better enforcement. Our commissioners have raised that as well, so I want to make sure that we're voicing that for them. And just from— I can add a couple things to Kat, is really a couple things that we'd want to do is like, if that's going to report to our office, our office only oversees two titles.

And so what does that look like when you have a code enforcement officer who's, you know, ideally looking at the entire code. Also, we need to update our code so that there is some teeth to our code when it comes to enforcement. Like, right now we ask politely 3 or 4 times, and then boom, we send you a letter from our lawyer that says we're gonna sue you for $1,000 a day. There's no middle ground of like, what, what can an enforcement officer do? What kind of fines can they put up?

And so it's kind Act nicely and then throw the hammer down. So working on the comprehensive plan and my recommendation to Kat was typically after you implement a new comprehensive plan, one of the next steps is to use that plan to modernize your code. And so that's going to be kind of our next big project after that is looking at firms that can help us like analyze our code, look at our new comprehensive plan, where can we update it so we put some someone in the future in that position, we set them up better for success because it's a modernized code. We have some teeth to the code of what they can do. And so that's kind of what we're looking at there.

That's one thing that I've set aside some funds in my 28 contracted services for, but that would kind of be— the entire city would need to kind of help with that because it would affect all departments. And I've kind of kept Kat in a loop for that, but yeah. Um, but yeah, and then I would just want to point out that on 2028, I think that's just a typo that our GIS position was put into '27 but forgot in '28. So we're, we're not actually jumping back down, we're just kind of reallocating where we're putting that, that budgeted line item in our department. So I'm not perfect, but I'm close.

Yeah. Um, and then also in that 2027, there is a bit of an increase in there because we're budgeting for the completion of the comprehensive plan and the wayfinding. The wayfinding will probably be funded through CPB funds, but since it's coming out of there, we wanted to make sure that that was allocated in that contract. So I'll let Danny— if there's any questions. Any questions?

You answered all of mine before. Yes, Councilman? Thank you, Madam Mayor. Just one question. Do you anticipate a time And we're not going to contract out GIS where we can do that internally ourselves and not have that contract expense that's doing a great job, but it's also out of state.

It's out of the city. Is there a thought that that might happen in the not too distant future?

That's a great question.

The—. Yeah, I don't have a great answer for that. It's not like— that is an expertise that would be hard to find, and I don't have that skill set. And so it would be a matter of finding someone like that, maybe comes to us and says, "I have that skill set," and we can see what they can do. But it's kind of just an ongoing new era that we live in, that we're always maintaining and updating our GIS systems that, yeah, I don't know what that would look like if we—.

Her contract ends in 2028 is what I think it is. Yeah, we have the contract going through 2028. I think one of the things that— so there's the pros and cons of the contract is Selena lived in Seward, was— we found this really exciting toolset that she has and was able to utilize it rather than previously utilizing our engineering and architectural firms to do a lot of that work, which came in at a very high cost year over year of making sure that got done. Adding a full-time position for a GIS person inside this, like an FTE for that, would also be substantially more expensive because of the added benefits and the full package of that. So we're kind of in a nice little sweet spot right now.

But if we got to the end of the contract and did an RFP and there was somebody inside the community or state who was like, yep, I can do that and can do it to the same level and at the same cost, we'd be open to it. But with the, the way that we have it now, it's, it's a high expense but a screaming deal for what we get and what we had paid previously in the past. So not until the end of 2028 is it an option. But in the meantime, Always something to consider as we look around and see what talent— is talent a weird word to say? What people in the community can do, because Selena was a cool find like that as well.

Thanks. Council Member Barnwell. Just a quick question. When are you finalizing your comprehensive plan, and is it going to be a digital as well as a printed? I assume the digital one will be a live version that will be— Yeah.

Is it right? Yeah, so we have run through— we finished our first draft of it. Our person that we're working with for the design, we meet with them in a couple weeks, and then— so yeah, I imagine there'd be like a hard copy but also a digital, you know, we'll have it online and available in that aspect as well. But I would I would say in terms of finishing it, once the design and layout is complete, typically you give, what, 30 days for public review and comment. And we maybe want to push that out to P&Z and you, this body as well, ahead of that so you have some time.

And I wouldn't want to do that during the holiday season, so probably early in the new year. But we'd like to have it finalized and up up for a vote for adoption. Any other questions? Okay. Okay, and then the last department on the agenda for tonight is my department, Administration.

Let's see. Oh, City Manager. I have a great emoji next to mine as well. Um, so the City Manager, AKA Administration, is on page 11 of your budgeted line items. And so department responsibilities: carry out council policy and supervises daily city operations, manage personnel and labor relations with the HR team, does governmental relationship grants and procurement, project management, which is a big lift for what Jason does in his day-to-day.

And so if you look at the budgeted line items, the major cost drivers that jump out are the contracted Services, which we've been utilizing for grant writing to maintain and stay up to date and apply for the different grants available across all city departments and enterprise funds. And then my— the travel in my department is pretty high. I do do an annual trip to DC and Juneau, do ICMA every other year because it's a big lift and it's also right now, and so I don't enjoy doing it during the budget season. And so those are the big drivers of the costs outside of salaries. And I think that's something to remember as we talk about major cost drivers.

That's— I told the department heads to not do salaries or personnel in that because that is always the major cost driver. But this year we were able to incorporate a decrease in that for dropping the full-time employees from 4 to 3.5 by splitting the executive admin position with the finance department, and that absorbed the bill payments at that front desk and has been really, really great for the city so far and is working pretty well. Um, and I think that's all for me. One thing too that I did want to notice out that we did this year, um, for each city department, I had them request a tentative travel plan for FY '27 and '28 to accurately portray what their travel requests were, and that's on page 60 of the budgeted thing. So you'll see the, the list there of the different travel that I attend annually for lobbying and at both the state and federal level.

I just have a quick question on legal. Oh yeah, um, there's a massive drop-off on legal. How does this happen? Yeah, so legal in 2024 was about $140,000 in, um, and in '25 about $98,000. You'll notice in '26 there is none.

We've moved all of our legal into the General Services Department department, and so all of the legal for the whole city, including enterprise and general funds, is in one department rather than calculating it down to the individual. And so that was a shift we incorporated in '25 and didn't really fully get into until '26. Good. Councilmember Barmo. Just kind of follow up on that.

It gives us a little more detailed or granular look at legal. For instance, if there I know there's a lot of legal costs for you guys every year or some year. Can you give us as a public some information?

So our legal does not charge hourly based off of department. They charge a flat fee each month, and if there's anything additional in litigation or anything, they'll charge over that, but—. Why would you have $140,024? We took on a— the administration took on a large portion of that cost. So the bills come to my department and then we pay them.

And so they were being allocated to my department or our administration department. There's, I think there was also— Yeah, I think there was also some, I don't remember exactly, but I think there may have been a litigation in that year. As well that was allocated towards that. And if it's allocated in that way, we could utilize that line item. But for the general monthly fee that we pay to the law firm, we just incorporated that into that.

Because yes, I understand the balance there between transparency and simplization, which isn't a word, but we have a really, really wonderful staff setup with our attorney and our law firm where they charge us a flat fee each month. And so it's something that I have to work department heads out of every once in a while because they'll be like, I don't, I didn't want to call the attorneys because I knew it was going to cost $200 to, to get them on the phone. I'm like, no, it doesn't. That's not how our payment works. Some months we'll use it exponentially and other months we won't at all, but it's good to just always have that resource available so you're not doubting or questioning whether or not that expenditure is going to hit the line item.

And so we— I really like that aspect of our legal contract with Sam and his team. We're getting a little off topic here, but I just— does that also include the electrical department's legal costs? So the electric department has their own legal line outside of that for the RTO and all of the things that we utilize that for, specifically Cody's time there. We approved that, I think, about a year or so ago when we accepted our role in the rail belt transmission because, um, I went to one of them and realized that a lawyer needed to be at it. So that, that fees, those fees are outside of that.

So that kind of falls into the category of anything else above and beyond their, their daily legal duties. Okay, Heather, okay. And Madam Mayor, I believe that is all for me tonight except I do have a fact-checker who texted me and said that Soldotna has 105 employees. Here, I wrote it down. Homer has 110 full-time employees.

Soldotna has 75. And then a town that I often utilize as a good comparison is Valdez because they're far from everything as well as us. They have a population of just under 4,000 and they have a 138 full-time employees.

Well, I got one text that said Soldotna has significantly more than what he said, and then I did the other searching by myself real quick. So. Okay. We have, oh, 10 minutes or so if public wants to comment, ask, just raise your hand and I will allow it. That.

Yeah, if it's— you might want to just be heard, or you can talk loudly from back there. It's your choice. This is a work session.

I'm watching the clock though, because we got to have a break.

A couple questions on clarification. Should I direct my Is that a question to you? Oh, to the—. Yeah, you said—. Or the group?

It's just—. I'm here somewhere. I'm just trying to understand the shift from the campground to the parking. And I think I've got it somewhat figured out, but I could use your help to clarify that. So we're going to take around $1.4 million of campground revenues, move that into the parking enterprise.

So we're moving a general fund revenue into an enterprise fund. And then we're going to transfer funds back to the general fund? Because the items that you've listed are being paid out of the general fund. Yes. Okay.

Yeah, it's—. Can you help me from a business perspective understand? It was something that was discussed on the council frequently as wanting some transparency of what those funds are utilized for rather than going directly into the general fund. So it was a discussion that was had up here multiple times. I received some direction to do that.

It definitely doesn't seem like— it shows a loss in the general fund revenue, so I understand both sides to it. Yeah. Yeah, it's a wash. From our end and what we were hoping to showcase based off the direction received from council was to have some more clarity and transparency about how much money money is coming in annually from the campground since it was just mumbled jumbled up into the Parks and Recreation. So was that at the request of council that you wanted this process done like that? Okay.

And, uh, and can you— Sully, can you please clarify? I looked at the financial statement in the packet. It had for 9 months our campground revenue was only a million, not a million $1.4 million. Do we have all of our campground revenue? We don't have all the campground revenues allocated into it this year yet.

Yep. Is that lag? Yeah, there's a lag. They're open until the end of September. So we haven't closed September yet.

Yeah, it's not a lie. Those are real numbers.

Just trying to clarify because the $9.30 is—. Yeah, but at the $9.30 And then we'll close it right after that. So, yeah, I can understand that. But my only concern on that is this, uh, I don't— I, I just see where we've used the parking fund as a nice vehicle to loan funds to other departments at times. And once we start rolling stuff in from the general fund, where does that stop?

Because you're not kind of open up Pandora's box of What's next? I mean, we do something else and we need more money, so it comes out of there. Yeah, yeah, go for it. Yeah, part of my justification or concern with the campground in the Parks and Rec Department is that it almost becomes a slush fund for Parks and Rec. Uh, in my— I felt that there was a, there was a lot of cash in the Parks and Rec discretion as if, hey, we earn this money, we're going to spend it.

And I wanted to make sure as a city we were being conservative in terms of spending our money, and then we just didn't have unlimited funds for partial rep. So that was kind of the rationale. Question? I would also add to that— oh, sorry. I would also add to that, one of the things that is really awesome and exciting about the parking and campground fund is that we have utilized it for internal loans and things like that in the past for the animal shelter, etc.

I think this only enhances its ability to do that because of that fund being hopefully receiving more revenue down the line as camping costs increase, or we've added some new electric, so we'll be able to increase those prices down there. So I think it— the hope is that eventually it becomes a much more stronger tool to subsidize or to loan out funds for bigger projects across the city for capital. Quick follow-up question to the council members' comment. Can administration confirm, has for the last 2 years campgrounds exceeded Parks and Rec cost? Has it been a positive cash flow?

No, it's not, not even close. Yeah, no. So it hasn't generated—. But it's the different departments within each of them. So I would say that the campground costs themselves and it is close.

I think it probably is— sorry, I just ate 100 rand.

I would say it's close enough, but the individual departments themselves don't necessarily allocate or correspond directly, because Parks and Rec itself is huge. It's parking, sports and recreation, maintenance, cemeteries. They plow so much snow that I just realize as well. So I'll use it either way on it, and I apologize again for eating that. Can I go around that conversation?

That, that's a really good point, and that was part of this. I don't think that— when are we gonna whittle their purview down so that it's more tempting for those guys? I think this is also part of that, um, journey of making it a little bit more defined of This is Parks and Recreation and this is the Parking and Campground Enterprise Fund.

So. I just had a quick comment about when you're talking about departments just having a slush fund or, you know, oh, this money's there, we'll just spend it. I've long been advocating that department heads be accountable to their budgets and if there's variances quarter to quarter that they speak to that. I'm hoping we can get to a place where people are living just within the budgets that we make versus just, oh gee, we're over budget, but, you know, without any real accountability or explanation for how those things happen. One more ask, if I could.

Oh, sure. And then—. On Dustin's budget, I appreciate the consolidation of activity. It's becoming a huge part of our society on IT and businesses and government. Might I suggest we consider rolling all the software subscriptions that are rolling in, that we're having to allocate out through finance to all these departments?

Would it be best to just dump it into his department and allocate it out in the general fund administrative fee? As a means— because we're not getting a roll-up of the general fund expenses, so we don't know what the real cost of all the SaaS software. So the major software that all individual departments utilize are within his contracted services. Individual departments themselves have their own SaaS, so we wouldn't be able to do a full broadcast of that because there's software that Danny and his department utilize that others don't. So we wanted to keep that as a line item in there.

And then like Microsoft services and those are all individually in his department.

Okay. Anyone else before we—.