Assembly Meeting

We'll all listen here. Okay, I'm just gonna do a little overview of our fiscal year '27 budget, and if anyone has any questions, just chime in, or if department heads, if you have anything you want to say that you think I might be skipping over that you think they should know, please just interrupt me. We're going to go through the general fund first, like always, and then talk about borrowed debts and school funding. We are going to have a few new slides. I'm going to talk about senior sales tax a little bit and how that's looking with the removal of the exemption.

Um, some new ordinances that we are going to introduce soon to increase revenues and large capital projects that are going to be occurring next year.

So let's just get right to it. So the general fund is balanced. Next year's expenses are 5% higher than last year's, and some of the reasons for this is an increase to vehicle replacement costs, 500 or 5% health insurance increase. And I just want to remind the assembly, our health insurance is about $1.8 million a year that we pay, and that includes the employee side and the borough side. So 5% of that is about $90,000.

Um, 2.5% wage increase is budgeted in there. Of course, we're going through union negotiations right now. We don't know what it's going to be. That was just a placeholder to have something in there. Uh, we have created in the general fund in community development a new position for a lands manager.

And we have increased the 6-month position to 12 months in Parks and Rec. For parks maintenance. And I ask what that person will be doing at going from 6 to 12. First, it's time to ask that question, or yeah, definitely. You want to jump in?

Um, yeah, I'm sorry, I was catching the bumpers. So the increase in that position, so that is a position that we kind of rotate here and there as we can, and we see how it fits for the year. We have a 6-month position that is solely a groundskeeper, and so they'll be out from April until the beginning of October. They go out and they work with, right now, Daniel, the groundskeeper, so he's an assistant. Um, we have the ability to, as we start seeing more fluctuation in issues at the facility, to turn that into what's called a parks and maintenance Laborer, so they'll be with Daniel and the groundskeeping for 6 months, and then they can come over to the facility throughout the wintertime, help with maintenance issues, and they can help with like plowing the yard, plowing the sidewalks, helping out with smaller maintenance things under the maintenance technician, our full-time maintenance technician.

And you only have one, correct? So this would now add 2 people for the wintertime, for the— you have one person that does all of it. So we have one person in each one of those, right? We have the groundskeeper that is Daniel, and then we have our maintenance technician at the facility who is Brandon. And so now we have Bill Craig, who is in that 12-month position.

So correct, Ed, we will have 2 people. Okay, got it. Yep. Yes, we had concerns about snow removal. So that, that'll be part of that too.

Yep, that is what they also help out with. Yep.

Yeah.

Oh, I guess, sorry, since we're already asking questions, when will the new position for the community development portion happen? Like, middle, middle of the summer? Like, do we have an idea of when that position is going to open? We're not funded until July 1st if the assembly is approved. Okay.

So, and then probably before then, we'll start working on ads and trying to figure out, do we, you know, it's not going to be an easy position to fill. Yeah. Okay. You know, we, so we really don't know. It could be 3/4 of the year.

It could be we could find somebody immediately. But again, we can't, we can't bring them on board till 1st of July. And the 3rd reading of the budget should be June 1st. Unless it gets pushed back to that second meeting, um, one reading of it. And so then we'll know again once you approve it.

Okay, sounds good. Rob, this might be a longer meeting than I thought it might be, but I was at the school forever. But the health insurance increase, I mean, I'm not a mathematician, but it increased for us 8 to 12% for 10 years. I mean, what's the end What is the end of this with the insurance companies? I don't, I don't know.

It was like after 10 years I had less coming home than I had 10 years before. I was like, are you kidding me? Consider ourselves really lucky. Everyone, we have Moda and they quoted us a 5%, but Primera quote, we all got a quote from Primera and it was, I believe, a 29% increase. Well, I'm glad you feel lucky because I'm just like, well, what?

Schools is high. I know the schools is high. It's ridiculous. And it comes out of, you know, some of it comes out of the transportation. Got a huge float too.

So when I say the noose is tightening back in October, this is part of it. Okay, that's all I have to say about that. Just irritating. Hey, Jody. So some of our challenges, we've talked about this before, sales tax revenue growth slowing down.

All sales tax exemption changes must be voted on by the public, which slows things down. Property tax is at the 10 mil cap for operations this year for Service Area 1. Of course, inflation and increased labor costs, union negotiations. I— we might approve this budget and then have to come back to you for a supplemental based on what happens in union negotiations. We just don't know.

Hopefully we'll get get it all sorted out before the last reading of this budget, but, but we just don't know right now. We met with them this week, but I don't believe we are able to meet with them again for a couple weeks. They, they had some scheduling issues at their end, and so we, we really won't be back at the table with them for a couple of weeks. And they made a pretty bold request that involves basically changing all of our compensation system. And it's going to take us some time to go through that as well.

So we're not ready to talk to them about that either.

It's a symptom of a bigger issue. If AML put an 18% fuel surcharge a month ago, the $14— I don't eat much mayonnaise, but the $14 jar is going to become $22, and everybody's going to face it. This whole community is going to face it. And so, I mean, when the noose is tightening, it's like it's getting tighter now because of this whole fuel deal. All right, then of course we have some large vehicle replacement costs coming up.

I know, but somebody has to say it. Oh, I'm not laughing at you. I'm just like, this is true. Yeah, I love that. I love that.

You need a cookie? No. Too much coffee already. We have a general fund balance policy to retain reserves between 4 to 6 months of operating expenses. Um, sorry, here you go.

Angel's our PMEA rep, um, for the employees. That's Angel. Welcome. Congratulations. Yep.

Um, so In February, we— the assembly decided to transfer the fiscal year '25 surplus to help pay for the aquatic center project and the assisted living project. So that $6.8 million is after that transfer.

So I always include these just because I want you to be able to get a good visual of, you know, how much what our highest expenses are in the general fund, which are the school and public safety and streets. Just, um, just so you guys can get a feel for that.

And then of course for the revenues, property tax and sales tax are our key revenues to cover the expenses. And then at the very right, we added the economic fund in this year's budget, we proposed transferring about $70,000 from the economic fund to the general fund to help cover a position. Where is the money from the economic fund generated from? I mean, investments—. Our borough investments go into the—.

The economic fund has their own money that we invest separately in a special revenue fund. Yeah.

So property tax, we're at the cap of 10 mills for operations this year, and then, as you can see, the sales tax is flattening out. It's too soon to forecast out what the removal of the senior citizen exemption is doing to sales. However, I did do a slide for the first 2 months, January and February. I'm unable to do March right now because businesses have until the end of April to file for March, and a lot of them like to wait till the very last day, which is tomorrow. So I didn't include that for March.

But January totals, well, total sales that were exempted for seniors in 2025 was $527,000. In '26 for the same month, it was $74,000. And I don't think it'll be that high in the future for January. You can see how it went down quite a bit in February. It's just some businesses do things for seniors, let's say in December, but then they don't bill until January.

And so there was a little bit of that if they use, you know, cash or accrual basis for their accounting. So, so I think that that will probably decrease to, you know, $50,000 and not the $74,000. But that's total sales. And so now you can't say that that's going to directly correlate to how much sales tax that we're bringing in. We are— I mean, it's going to cause us to get more sales tax, but we don't know, like if a senior citizen were to buy a boat at Rocky's Marine, they would have used the senior sales tax exemption.

But however, without that exemption, they're going to hit the cap exemption. $1,200, So that might— some of that might just move over to that exemption. So it's not a direct correlation. There'll be a recommendation from the borough to have that raise that cap on. Yeah, and I have some slides on that.

Yeah. And so we did in January collect $26,000 more in sales tax than last year, and in February, $22,000 more.

The slide for remote sales, you can see it's not increasing as much as it was. I think they, you know, are slowing down onboarding new remote businesses, so I just thought I'd include that just so you can see that a little bit. And then this is sales tax that was collected locally in town, so you can see how that's remained flat. Hopefully next year it will show an uptick. So property tax.

This year we've added an additional expense of the area-wide mill rate for operations. Uh, we are allowed to do this by charter section 1405. You'll see the 1.71 mills is included in that, and area-wide is For everyone, Service Area 1, area-wide is included, so that increased the $5 mils to $6.64 mils. That's an increase of $164 per $100,000 of assessed value.

So the assessor said that he was going to assess all the properties starting again next year. This summer when he was here. He mentioned that he was going to be out starting all over again. Yeah, I would have to ask Chuck with him if he's doing physically looking at every— I don't know if he's doing all the remote. He's going to do the— he's going to do Wrangle Narrows.

Okay. Um, because, uh, he's a friend of mine, so he's going to do the Wrangle Narrows. That's what he told me he's going to do this summer. What he does in town, I don't know. I thought he said he was going to go, but I don't think he can hit them all, so we'll see.

But I do know he's going to be back at least twice this summer. So I just summarized, uh, what we can charge, uh, property tax area-wide versus service area, just for everyone's reference.

Service Area 1, of course, will have the area-wide mill rates included in there, and then we'll have the Service Area 1 mill rate for operations of the things that area-wide doesn't pay for, like the police and things like that. And then we have our— Service Area 1 has debt service of 0.3%. $3.6 Mils to finish off paying for the aquatic center and the library.

And can you read those ones? Both of those—. Both those are paid off. 20—. Is it 20?

Yeah, this next year is our last year, so this is it. And then, um, yeah, we'll just have that one bond that we're paying on for, um, the school for the roof project. So pretty exciting. So do we get to take another loan out, or—. Well, get out of here.

Go ahead. Yeah, sorry, Bob.

Yes, can you, um, describe to me, Jody— I thought you were just digesting. Did you have a question? Sorry.

Last year was 10.8. I mean, it's really almost flat, so this would be an increase of $13 per every $100,000 of assessed value.

So operations is 10 mils in, in 2026, and then the debt service, which is the 0.57 plus the 0.36, is, um, $1.93 mils.

And the aquatic one was the one we voted on, right? The public voted on—. You have to vote on all of them, but us—. Oh, okay. Yeah, okay.

Yeah, yeah, it's our third. We actually had 3 different bonds for the aquatic center, right? And, uh, we just needed to bond a little bit more to finish it off, and that's what this one is, and that's what pushes it over 10. That we're allowed to do. Yeah, the charter says operations, $10 million cap.

You can't go over that, but debt service, voter-approved debt service, you can go.

You can go quite a bit. Yeah, sky's the limit. I think we're allowed $5 million. Oh no, it's— well, it's gone up now, so—. Oh my gosh, let—.

I believe it says right at the top here. Oh my God. $45 Million we were able to. You've done a good job. Right now we just have $4.1 million of general obligation.

Robbie, you would be maxing out that cap. I know you.

Max out about everything, seems like. So the other day I sent— oh yeah, go ahead. Could you just go back a couple to this area-wide service area power? Yeah.

I haven't seen this before. So I just took language from the charter and just try to summarize it. So on the left, the area-wide, this is what we can charge property taxes for area-wide. We can charge for, and we've had historically only been doing education. Me, can I let me?

Yeah, please. I, one of the discussions we had earlier, Bob, was that it was time that if, you know, outside of Service Area 1, the charter allows us to charge for the things that, that what Jody's showing here, which we hadn't done before. So one of the things we did in this, this Jody did, I think, did it quite, quite well. Is she, she is showing, okay, if you, even though you live outside of Service Area 1, you know, some of these things you can, you, you get benefits for. And so therefore we've increased the mill rate outside the service, she has, outside of Service Area 1.

And just so that there's no, I think that this is going to, this for me, well, it's going to, uh, raise a lot of concern, at least anybody that owns property off the road or off the island, because it is, it is increases Jody shows on her other slide. So just so you know up front that we will have people here talking about the increase. So, but I think Jody, what Jody's showing is it's reasonable. She's going through this and showing the ratios, and I think she has a reasonable approach that's pretty defensible. And so then Papke's, for example, is the area-wide side, right?

Which used to be just education, but now we're tacking on assembly, library, cemetery, hospital, so on for those guys outside. Just batch. Just batch. Because they do use those services for the most part, anybody living out there. Okay, thank you.

They don't use— do they use the roads? I would think so. Yeah, I would think so too. All right.

Not charging for roads. So community services budget out of the general fund can be found on page 31, and the transit room tax fund can be found on page 62. We put in the budget everything that these community services requested, except Humanity in Progress, they requested $30,000. We put in $12,000 to match what we gave them last year. All the other community services asked pretty much for what they received last year, so we just— we are balancing the budget and Steve decided to keep it flat.

Oh, uh, local contribution to the school district, uh, we put in the same number as last year. However, I would like to say I just got the school's budget and about an hour ago, and I had talked with Shannon like a week or two ago, um, they're still proposing that the borough, um, give them $3.45 million, although If they get that BSA approved by the state, they will be fine with $3.25 million. So I told them that we were putting $3,250,000 in the budget, and once it's decided what the school is getting from the state, we can always go back and, you know, talk about it again.

One of the things I wanted to show you about this slide is we use Secure All Schools to help fund our local contribution, and we're trying to not use as much Secure All Schools since we only get about $600,000 a year, and sometimes they say, no, you're not going to get any more. And so So this is doing that. By last year, or I guess this current year, we're using $770,000 of Secure Rural Schools. Next year, proposing to use just $660,000. We're trying to ratchet it down, and then, but in doing so, we're having to use more taxes to help pay for the school.

But we just want to reduce our reliance. By reducing Secure Rural Schools, are we just like saving a little bit more on that side? Is that what basically the point of doing so? Um, yes. Okay.

So just because we don't know when it's going to end, they tell us it's going to end. So last year at this time when we had this discussion, we were told it was going to end. We— and so we were really serious, we have to stop using this fund so much. And then right after we approved the budget, they're like, oh, we're going to extend it for 3 years. Well, we just got last year's payment last month.

We're supposed to get this year's payment in May, and then we'll get one more payment next fiscal year. And then, and then who knows? So yeah, well, they don't find out how much they're going to get per head per student till June or July or something. We talked about this last year. Yeah, so that's the problem, right?

Like if we give them more than they need, Then, you know, we're trying— we're having to make cuts on our end and having to, you know, charge ratepayers— or not ratepayers, taxpayers— more when they might not need it. And so like this last winter, the school had, I believe it was like $800,000 surplus, and they were trying to figure out what to do with it. And, you know, they just end up putting it in their capital project funds. What Jodi has been trying to do is to say we can bank that money for them. But they're, you know, in the school, they're limited in the amount they can carry over from year to year.

I understand that. Yeah, yeah. And but, but for some reason, we're not, we're not communicating quite well, quite as well. And I like to see is it where we could hold that money and keep it for another year for them when we don't spend it on other things. Even on a classroom, you have to spend it by this date because you can't carry it over for a bigger thing 3 years from now.

It had to be spent. So, and honestly, since we just were able to balance our budget with the 3.25, if they're going to need more money, it's probably going to have to come out of this fund.

Yeah, I believe $6,000 of it was for the roof. That's— believe so. I have it right here. Yep. Can it be done?

I had a question when you looked at that. Can it be done for the amount they're, they're showing? They just had an estimate in here, but they don't have any quotes or anything else.

Oh yeah, they also said in their application, in addition to the roofing funds requested from the borough, the museum is pledging $4,000, and we are requesting $6,000 from the Petersburg Community Foundation. Oh, with the remaining funds, $22,000 being requested from the Rasmussen Community Support Granting Program for a total project estimate of $38,000 from Curtis.

So, future ordinances to increase revenues, um, the sales tax cap, that's going to come before the assembly at the second meeting of May. I'm just taking the old one and dusting it off, adding some different language, updating sales tax caps that have maybe increased in other communities, um, because that was part of that ordinance. And then it'll be before you at that second meeting. The marine passenger fee ordinance increase will be at this next assembly meeting on Monday. I'll start it.

What do we end with? What's that? What did we, uh, decide on? Well, it's being proposed. Well, I'll get to it.

I have a slide on that. And then we're talking about increasing building permit fees, which will happen later.

Why is that? I don't know if I should touch that one. I don't have a slide on that one. But maybe this summer, maybe this fall, depending on us for later. Yeah, I am.

This is, this is, it's coming. There's a lot of things happening. Yeah. So I just— I'm digressing a little bit from the budget, but I just wanted to add this. In 2025, businesses exempted over $25 million in sales due to hitting the $1,200 sales tax cap.

So the items I've highlighted in green are related to tourism. The fuel, of course, you know, can be for fishing and whatever as well. It's not necessarily tourism, but there are charters, cruise ships, lodges, boat rentals that fuel up. So I highlighted it, but I just wanted to give you guys an idea of what—. Everybody's bracing themselves for the fuel, by the way.

Yeah, I mean, it's very— Southeast, we've seen it in all of our budgets. Yeah, are we sitting now at the lowest tax cap of anybody in Southeast? Yeah, actually, I have one of my staff putting that together again. I believe we are the lowest. Ketchikan's second at $2,000.

You know, Wrangell just increased theirs this last year to $5,000, which we tried to do. What do we—. You know, like Juneau and stuff is $10,000, $15,000. Some places have no limit, no tax cap, you know, like down south and things. But is it— this is a work session, right?

Yeah, sorry. Um, you know, the With the sales tax cap, I mean, it does need to increase. I mean, there's definitely a way we can get money, especially from people that are just coming here for a day or two or whatever. Um, the fuel thing is going to just eat up everybody, right? If you're getting taxed more down on the fuel, is there another— and I'm just talking out loud— is there another way we can help the fishing fleet in a different light that can maybe offset this?

Not a whole lot, but just a little bit, enough to be like, well, we know we need to increase this, but but in return we have this other thought that can help mitigate something. I don't really know. I'm just trying to talk out loud, maybe like lesser of two evils kind of thing. There's some at the national level, at the federal level, that's talking about food producers and transporters, like the trucking companies and transport, maybe AML as well. But if you produce food for people, Maybe there needs to be a break because I, I don't know, I haven't been without food for a while, but it's, you know what I'm saying.

There also is a proposal in the legislature that in addition to a $1,000 PFD, there is a fuel, uh, fuel to everybody, a fuel tax, or not fuel, a fuel increase. And I think it was $200 when I looked last, I looked at it. Per person in Alaska. That's not— is that just private people? Is that commercial?

It was everybody. Every resident of Alaska, we get it. I understand. Yeah, the commercial trucking companies and so forth. Yes.

No, it's huge. It's off the charts. Yeah, I know. I'm not— that's going to trickle down to everybody here. Yeah.

Is there anything that anybody happens to know off top of the head that could— I've lived in communities where when things got like this So like a kind of like a cap during the summer months, not necessarily 72. But you could cap it at 125. I'm just using random numbers here. So budget figure, divide it by 2, right? 50 Cents a gallon, planning on 6, you're getting twice as much as what you put in your budget.

So they would come at a happy number in between and say this is the Challenges is Alaska's got some of the low—. Actually, I think it is the lowest fuel tax in the country. So anything we do, you know, we talked, for example, internally, we talked about a fuel tax at some point as a potential way to raise money. Has to go before the voters. No, I mean, and you see communities not in Alaska, but down south that are you know, the state comes in and says we're going to forego collecting the fuel tax during this, you know, Iran stuff.

You know, we don't have that. The state gets all that money. So it's really a, you know, there's not much on the directly that we could say, okay, we'll stop collecting this so people could fuel up cheaper. So I, I've been struggling with this because I remember last year, or when it, you know, the last, um, time we voted on it, because I was talking with fishermen about it, and I struggle with it because you could— we keep— they keep circling to the same thing I circled to is that we have a fixed population that you're continuing to tax more, right? So that there's the struggle there where it's like, okay, but raising to 72 up makes sense on the other out, uh, other portions.

And then I always thought with the fishermen too, there's many fishermen— Stainers, let's use them as an example— they will come here to offload, but sometimes they want to stay on the coast and they'll go to Craig. That their, the, uh, sales tax cap, if I remember reading, was like $7,000. They're not going to stop and complain, or they might complain, but they're not going to not get fuel just because they're there. However, that doesn't mean I don't think that Petersburg could do a good job about being like, hey, you know, we still appreciate you. So we're— we understand that we need to bring this up, but maybe for the fleet during the summer months, we number cap it.

I don't know what number cap it is. Like, if it's 5,000, that would raise it to 300, right? Maybe at the dock, maybe cap it at $125, $150. This is just talking to— we're at a work session, since I may as well bring it up. And if we're going to be having it just for fishermen for fuel, yeah, I don't think you can do that legally.

Okay, well then I'm— I have no other—. Do is do some kind of incentive. And other communities do this. If you bring a fish ticket from Petersburg, you know, some kind of a reward. If you, if you sell your fish to Peters in Petersburg, like, how would that work?

Yeah, I'm not sure. Bring a fish ticket and you could get something for it. Something? Oh geez, like, uh, half price on your mortgage. I don't want to bring that up, but yeah, exactly.

That's what they've done in other places. Okay. Every fisherman knows in the fleet that Fuel's cheaper in Wrangell than it is here. Yeah, but if they're—. Actually, it is.

Well, I fueled up there. But if their sales tax cap brought up to $5,000, it don't really matter anymore. No, I understand. So if we're going to bring it up to, you know, Southeast standard, which probably— I mean, we should because there's a lot of tourism money that needs to be capitalized on. But I just know where we're going to— where the head is going to happen, right?

So, well, and we'll talk about this more when, you know, we get to that ordinance. OK. Sorry, it would be like if we did something like that, like, say, transients, because I have guys running all the way in from the coast to sell black cod this last— this first month. And if they could get half price on their morrage or something. But the other thing is the harbor doesn't— isn't the one that needs to take the hit.

You know, who's collecting the taxes or who needs to take the hit? So that's why, you know, it deserves a bigger conversation. But, uh, do you have questions? Well, yeah, I just kind of think maybe we should revisit the whole philosophy of why we have a hard cap on sales tax. What is, what is the underlying thing we're trying to do with that money?

Um, well, we'd have to dig that out when it was set. I can't remember what year now, but I'll let you know when we introduced this. Um, I remember researching if we had put it in the costs, our inflation, it would be over $10,000 now, our tax cap. So the idea is to encourage local purchases. No, it's to capitalize on people that are spending more than $1,200.

You're only capped if you spend $5,000 on something, you only pay $72. Yeah, I mean, if you go down south, they don't have sales tax. Yeah, I mean, I never encountered that anywhere else. Steve brought it up last meeting. He said, well, if Say a company comes into a lodge and they're gonna rent out how many ever, they'll write one check for $15,000, $16,000, whatever it is.

The most they get taxed on is the $1,200. So they paid $72 in tax. Yeah. Yeah. Right.

But I mean, why we originally, why Petersburg and not just Petersburg, but why in Alaska the sales tax cap became a thing. Help out the fishermen. Okay, all right. It affects some things more than others from looking at that. Like, it probably rarely impacts your, your, uh, telecom bill, but it totally impacts your fuel bill if your fuel is over $1,200.

Yeah, and that's, you know, I have a smaller boat, I'm always right about at it, but so I'm paying about as much in a gill netter as the seiner sales tax all year. Is that—. That's exactly right, Bob. But anyway, but is that, is that cool? I mean, to keep it low, you mean low for someone else?

Well, and then to us though, if it is a work session, you know, those are the guys that can write it off. I mean, commercial guys can write that expense off. You're taking 300 gallons of fuel is different than somebody off the coast that's taking 3,000 gallons of fuel. It just seems philosophically kind of arbitrary, like what we're doing here. Is it It's just a giveaway to some people and not others.

And so what are we getting for it? You know, you can say that also about harbor rates too, right? With harbor rates, they're writing that off as well. Yeah, yeah, yeah. Expenses.

Move on to the marine passenger fee ordinance, which will be introduced at this next assembly meeting. Um, in it, we're currently proposing, um, to increase it to 8 I believe that number came from an assembly member. Was that you, James? Perhaps. Um, so this will generate an additional $30,000.

We use it for things such as the restrooms, cleaning them, Singly Bridge materials, janitorial at the library in the summer when all the tourists go up there. Some new proposals that we have on page 20 are Page 64 of the budget is the Singly Bridge engineering, False Creek rail installation and trail maintenance. Someone from the community requested that we look at, you know, a lot of tourists go out there to False Creek and the path down is uneven and things, and to put a rail in. Was that you? But I had asked the state, I didn't ask the borough.

No, I even, I went and talked to him like, and he said he was, I was asking if I Can Travel could put it in because everything takes so long. And he said this, he said that we're in such an interesting position that we're one of the only communities that a private person wants to pay on to put on something out there when he said that he can get the money But they just have— I've heard nothing since. So that's interesting it came here because I requested it directly from the state. Oh, no, no, Fish and Game. State.

Yeah, yeah, state. Yeah, they said that they would do it. I didn't know it would come to here. That's where— this is the first time I've heard of it since I've talked to them. They can't do it.

Liz, do you want to talk on this at all? Go for it. Go for it. Okay. I don't think they have the money.

That's okay. I mean, I feel like if I put it in, it'd be fine. Yeah, but you can't do it either. And the borough has a—. We're part of a management agreement.

Yeah, we're out there. Can I donate something? But it was harder. It's harder to take money from private, like almost impossible for a state, apparently, state facility. So annoying.

Yeah, all I want is a handrail anyways. But I think this does a handrail and it actually maybe helps create a switchback so it's not so treacherous to go down.

Sorry, I didn't see the easiest way to get sure. Well, it comes from them anyways, that $8. So there you go. So these changes in the main patch under your feet, are we going to be like in 2 years? Will there be something else to adjust this, or—.

Well, you could add that to the ordinance, but I think currently it's just increasing it from 5 to 8. Yeah, yeah, then we can vote to raise it to 10 if you want. There'll be 3 readings of it. Yeah, and I, uh, when I proposed that, I proposed that 8 because, um, I sent out a long time ago this, the, um, There's a catch-a-can study of the cruise ships and stuff, and then you hear about other communities doing it too much. Like, I think Skagway got in trouble because they had like, they're charging $15 per head for one side and another $15, so it's $30 per head every time they come to town.

And then Juneau was not spending their money right. And so, and for me, I don't like big jumps. I like incremental jumps. So $8 is good, and then in another 2 years we can raise it to $9 or $10, and then just slow instead of these huge, just dramatic jumps, which we're seeing seeing with everything else. So that's why I chose 8.

And anyways, are you going to retro it back to the beginning of the season, or is it going to start July 1st? No, it's not going to start until January 1st. How? Because it's too— it's too soon to do it to the cruise industry. I mean, a lot of times they book these cruises a year in advance for people, and so, um, we're gonna give them a lot of notice.

This currently 5 going to 8. This is every visitor that comes to Petersburg on a ship that has more than 24 people. 20, 20. And so the people that are lightered in are paying the same fee out from Frederick Sound. Okay.

So ways to continue to balance the budget. Well, so this was a list from last year, and now we are at the $10 mil cap for property taxes. Increase the use of Securitl Schools. That's only good for short term. It's not sustainable.

Fisheries business tax. Currently, the general fund gets $350,000 off the top of the fisheries tax that we get, and then the rest goes to the harbor. Cut expenses, personnel services, use reserves, which is again is not sustainable. Modify sales tax exemptions, must go to the voters. Increase rates annually for other services, which we're, you know, really starting to look at here with these proposed ordinances and things.

Area-wide charges for services other than education, which again we have in this budget as well. And motor pool replacements, evaluate more if possible, which I think they do. But yes, go ahead. Curious, what does it take to— is it possible and like okay to think to start offloading stuff that I know that we subsidize a couple things that for a long time now, right? And because there's been our money put into it, maybe federal money into some of these buildings or whatever, uh, if we were to try to sell those to private, could we?

Like what, Manor or the community cold storage? Or I think with the value of the Manor, it might need to go to the vote of the public for our charter reasons. Anything over $500,000 has to go for sale, for sale has to go to the vote of the public, voted for approval. So we can, we could, for example, if if the hospital wanted to work with us, we could have— we could have a management agreement with the hospital to run the Manor without it changing hands, and they could do that. But if we tried to sell the Manor, it would have to go to the voters first.

Have we had that conversation with the hospital yet? Bob, do you want—. Yes, we are having that conversation with the hospital. Oh, we are? Yeah.

Oh, it'd be nice to know. I mean, what are—. Sweet. What's that conversation back in there? Back Jeff, it's back in their hands right now.

So I can't— I don't— I can't answer your question because they have— they had to go back and look at some things where they wanted to take it over. Then they'll— they'll be back to us. So they approached the borough? We approached them. We approached them.

Yes. Because I know that, you know, there are things that we're subsidizing, so that's another way to save money, you know, if we are not subsidizing as much. So, I don't think it's the borough's responsibility. I don't think so either. I mean, we have basic services that we should be providing.

Yeah, say that again, Jeff. I didn't hear you. Well, there's basic services that the borough should be providing, and I don't know about, um, I mean, in these times where the budgets are going to get tighter and tighter and expenses are going up and up, I don't think that's the borough's expertise is housing. Yeah, right.

That road maintenance, uh, Secure All Schools fund for roads right now is $624,000. Uh, last month we actually received $108,000, um, for the Secure All Schools for roads. This has paid for a lot of projects, um, include— and we've actually budgeted this year for, um, crushed rock, for it to pay for a lot of crushed rock that we need. And, um, just— we budgeted the whole amount just in case we need it. We've been talking about, you know, paving and things like that, so it's there if we need it.

Hopefully this fund will grow $200,000 within the next 2 years, so that will be nice little cushion to have. Challenge with roads is we have no confirmed funding mechanism for roads. So in other words, this Secure Rural Schools, every couple of years we hear, oh, it's going away, and then it comes back. It's a small enough dollar amount that it really doesn't pay for much when it comes to paving. If we wanted to do a paving project that you're talking about $10 million, I mean, it's very expensive and it's getting more expensive.

Inflation, price of oil, asphalt is basically an oil-based product. So, um, Yeah, we don't have a great answer. I mean, we've talked internally, and I think I've thrown some stuff out there about doing a bond every 20 years to do paving. That means more money on all of us that have to pay for the bond. I mean, and so it's really— paving is a problem.

It's not just a paved problem here, it's anywhere, any city you go to. Um, it's an expensive problem. And, you know, we don't have an asphalt plant here, so anything we do involves having to bring a plant here and pay for that. Mobilization costs can be high because they have to truck all the— or barge all the rocks in. Glow's talking about doing a big paving project for the drive down and maybe the South Harbor parking lot.

But, um, you know, it's—. Yeah, I was going to ask about that because there was talk last fall about— because I hear a lot about the— and you do too— about the drive down. And bumpity bumpity bump with trailers and scenes. But you know, anybody who lives or drives on Excel Street, I mean, I can go down the list. I mean, there's a bunch of city streets that are every bit as bad.

I mean, it's just, it's awful. We don't have an answer, yeah. Well, it's the built-in speed bumps we had as kids. We didn't, don't be worried about dust 'cause the dust was everywhere and it was always a speed bump all the way out to Sandy Beach. I had recently asked the garbage guys and Kelly and whoever else is working up there if they could do me a favor and when they're going and picking up everybody's trash to tell me which roads are like the worst.

And they called me back and told me that it was easier to tell you which roads aren't. Yeah, yeah, no, yeah, it's pretty— no, I mean, it's, it's best way to say it is we know we have a problem but we don't have a solution because the solution is money. A lot of money, actually. And we also remember that state told us that this year there would be no paving plan or anything in, in Petersburg. There is potential next year, potential.

That's one of the reasons we used to try to save this money, because hoping the state would pay the mobilization costs so we wouldn't have to, and then we'd have some money set aside to actually do some paving. The problem is cost of asphalt grows faster than our fund does, and so I'm not sure we're gaining anything by holding off. Um, so I have a question for Liz, I think, right? Um, but, uh, I— some community members out there say we're not looking for enough grants. Do we get grant money from the state for something like this, or would it be federal?

Or even if there is anything that exists out there, Is there?

It's through the state, but for just regular road maintenance, you know, they have their transportation priority list and they're looking at their roads first, right? And then they have small set-aside programs for local roads. It's like ghost—. But usually the ones that I see get the most money are like road alternatives like trails or pathways or things like that. Well, I also shared statewide for—.

How did we get Wrangle Avenue all those years ago when they came in and did that? I don't know if that—.

That was a fabulous—. Well, is, um, is, uh, uh, give it to us after Well, Clinken and Hyda be bringing the paving thing. So if they do, then we have—. Why, I'm—. Yeah, that's what I'm saying.

They're going to bring it here. Okay, well, what they're likely going to do the same way they did last time, which is do all the subdivision, get the inner, you know, the infrastructure in, get the roads built down to hardpan, but not put a top surface on it until a couple of years later. That's what they did up there now. So it starts off as a dirt gravel road but built very, very well and then comes back to be asphalt later. Kliin Haayda does— all of this is done on grants, federal grants to the tribe.

And so they've prioritized, and I'm glad they did, prioritize getting the roads built to our specs, getting the infrastructure all built in, getting those lots ready for sale. Their focus is, and not necessarily in putting the hard surface on, although that's hopefully will come. And I recently called Aaron and we chatted about this because I had public people call me because they're like, who do I sue if my tire pops or whatever? That they were bitching to me about that. But anyhow, um, uh, another thing to know about this too is that there's aging infrastructure underneath the roads that we possibly have to attend to if we're going to pave over it.

So, okay, I guess we'll all put our heads together to find money or fund it somehow. I mean, you know, um, Carl led a charge 3 years ago, 4 years ago, longer than that now, 8 years. Wow. Um, to do a local improvement district up at Severson's and talk to homeowners who lived up there where you'd add it to your property tax and we'd do a a paving project. Not a single street passed.

Yeah, right. People want the roads fixed, but they don't want to have to pay for it. Of course. And I totally understand. But unfortunately, roads are one of the most expensive things we have to try to maintain, and there's just— there's not a source of money for it.

I mean, the reason I looked at a gas tax, a local gas tax, a few years ago was exactly this issue. Saying, you know, if we had a gas tax, you know, if it was collected in the harbor, it goes to the harbor for their infrastructure. It's collected here in town, it goes to a fund for streets and roads.

Some states have done things like that, but, you know, it was not a popular concept here, so I didn't push it. But yeah, there's not a real organized set number that we get every year that we could put aside to do paving projects. We, you know, to do it well, we'd probably need half a million or better every year, and the general fund can't take that. We took— you've seen the budget— if we took half a million more and put it into streets, how many police officers are you willing to get rid of? Well, it's pretty easy to look at with between the state and the local with snow removal.

Take a look at local snow removal equipment versus the state. I went by in town and I went out the road and I was like, holy smokes, it's a marked difference in the equipment. Carl, what if this hypothetical data center coming, is there any way we can draw that money, that consistent money to a different fund for something like this? Sure. That's why we're here, we're doing work session.

So revenue comes into the electric. We're selling power to them. That's how we're getting—. And then you, you sell— yeah, you donate to us. I don't know.

Yeah, but on that next slide there, we're talking about a 4% increase. Are we moving on? Yeah. Okay, we're moving on. Sorry.

Okay, there is no data center. That is, that is eggs in a basket. Yeah, right. Remember that. So some— we have some scheduled rate increases, uh, in electric budget.

There is a 4% in the proposed budget, uh, that Introduction of that ordinance will be at this next meeting, assembly meeting. Water, there's 3% built into their budget. Wastewater, just you can go ahead and cross that out because I just talked with Aaron. Apparently there's no nothing right now in their budget for an increase to wastewater. But however, at the next assembly meeting, and please correct me if I'm wrong, there's going to be a rate study talk about electric and wastewater and what the rates need to be and why.

So that will be at this next meeting as well. So stay tuned. We may have to— in fact, we're going to have to adjust the wastewater's budget here before we pass it in the final reading. Sanitary—. Oh, because the reason we're going to do a rate study is because we don't think the rates are high enough, or—.

Well, we have a rate study software now, Waterworth, that actually— I don't know if you remember the last time they did a talk, and I'm sure you do. It was a long, long one, wasn't it, Carl? Everything was in the red in 3 years or whatever. Yeah, horrifying. Yeah.

And so as we get new numbers and, you know, learn more about the timing of projects and things, we are able in that software to shift where those capital projects are, and that really has an effect on the— what the rates are going to be for the future. I'm just taking wastewater. We've had those conversations recently. We have the outflow for almost $300,000 that has to be fixed. The EPA issue that at the plant itself, that, you know, we've estimated up to $15 million.

We got $8 million. Now we'll go back to the feds for more money. No guarantee we'll get it. We have to start planning. Putting money aside for when the day comes that we have to start that project and we have to have enough money to do it.

So it's, you know, a lot of things, just like in your own household budgets, are driven by outside influences that you have very little control over— cost of fuel, cost of groceries. For us, it's cost of infrastructure. Um, that $8 million, did— was there a time frame on that? I'm shocked that we haven't soon about, you know, when we can get that money. But I think, Aaron, last time you checked, it was— they were still tied up in D.C., so.

They said they'd reach out to us when it's time to apply for that. At one time I thought we were looking at like almost a 24% increase in the wastewater rates. That may be true. Yeah, I'm not joking. Oh no, I am totally not joking.

Absolutely not. That's true. And, you know, That's going to be a big hit. Well, and one of the things that I'm going to ever— when you talk about these rate increases, we put percentages in there because it's easier to define it. But what is a 24% rate increase in wastewater?

Actually, how much money is that? It's not as much as it sounds. I mean, you know, I can't remember the numbers now, but, um, so that's an important part of the communication process. 24% Sounds, oh my God, but if you find out it's only $30 a month, still a lot for a lot of people, but not as bad as it sounds. Well, it's cumulative too.

So you have 30 here, 40 there, and 50 over here, and 24 over there, and $22 for a jar of mayonnaise. And all of a sudden it's like, oh, wow. And then not to mention fuel for people that are driving to work and back, or out to Coronation to go fishing. OK.

So we have 7 enterprise funds and an internal service fund, the motor pool fund. I just laid out the revenues and expenses for fiscal year '27. Again, the wastewaters are off a little bit, so don't look at those too closely, but those are going to have to be adjusted. But as you can see, the sanitation fund, and I had just been talking with Aaron about this, you know, this was with the 3% increase in their revenues, but we're going to have to revisit their rates. I mean, I was talking with Carl before this meeting too about recycling.

You know, right now, like, I'm getting a $5 discount to recycle with an extra can when recycling costs are costing more than regular garbage. So we need to talk about fixing that. Um, it's Yeah, and I can speak to that. So I think you may remember us talking about the SEASWAS study, so Southeast Alaska Waste Disposal. We're part of that to basically determine is there better ways to deal with trash than we currently do.

I can tell you the first thing we'll do once we have that study, if it doesn't say anything other, is probably get rid of curbside pickup for recycling. I know people don't want to hear that, but it costs us more to recycle than we get back for it right now. Or maybe even just limiting it to cardboard or, you know, and that's why we're waiting for the study, which is, I think, the fall. Yeah, so we didn't want to make changes and then have to turn around, oops, we made a change too fat. We want to hear what the study has to say.

And so, as Jodi said, maybe we start only doing aluminum and cardboard, or maybe we do drop-off instead of curbside pickup. I can't answer that. And, you know, waiting for 6 months to the fall where we have this report by these people that we've paid to look into it makes some sense before we take everybody's curbside recycling away. Does, does the curbside pickup cost that much, or is it the recycling that costs that much? Because you could argue that if the recycling portion of it is what actually drives the cost, then, and not the actual pickup part?

Does that— you understand what I'm trying to ask here? Yeah, so clearly curbside cost because you have fuel, especially fuel and labor, and you have trucks. Um, you are correct in pointing out that if it's commingled, the cost to get rid of it is basically the same outside of the pickup cost. So in other words, if we do drop-off and it's all cold meal difference That's really no different than what we're paying now, which means recycling costs us more to get rid of than regular trash does. Yeah, so it's like, if you know, I don't— I wouldn't want to see it get rid of if the real issue is just recycling in general.

That's why we were waiting for this study. We want to see the numbers and what they have to say. Maybe they come up with a brilliant— I mean, one of the ideas that was talked about was opening a, you know, going to someplace like Sitka or Juneau. Creating a big landfill that it's a regional landfill. Well, there's been a lot of speculation about what happens to recycling anyway.

Does it actually get recycled? It does, but it has to get shipped all the way down to Eastern Washington. So you can imagine, but our trash does the same thing. I mean, that's our problem with our regular trash anyway. Anyway, it's not a— sanitation, we have issues with wastewater, but we can tie it down to you got to redo your plant.

Um, you know, water just needs— you know, they got a couple of projects. Electric, we've talked about. Sanitation is almost totally outside of our control. We've got a rail line, a landfill, a barge system, all of which want to make money on our trash. And so every one of them adds cost to, you know, a ton of stuff we throw away.

And, you know, and they— it's basically a monopoly. I mean, they, they come to us and say, well, we're going to raise it this much, and if you don't want that, then good luck finding somebody. And they're pretty much right. There's nobody else that can do what they do. And when you kind of combine, again, the rail line and the barge system along as well as with the, with the landfill itself, We, the borough, and all the, you know, cities in Southeast that are going through that, take it pretty hard.

I mean, it's big increases. So anyway, electrical budget. We have 2 additions that weren't in the budget that you received before, and I was just wondering if Steve or Carl, you want to talk about those 2 additions. Sure. So the one is, according to the charter, we have to have the equipment and you say, I think my meter is reading too high, come out and verify it.

Well, the one we have currently now is unrepairable at this point. So that's the one. And the other is the pole— I messed this up trying to say the word, I don't know why— resistograph. Um, so it's a tool that you check, uh, you drill a couple places in the pole and use the resistance of the drill bit to say how much of the pole is rotten. And at one point we rent one every so often to come in, but the expense of renting them is about 30% of purchase right now.

And the goal is to use that to go— we approximately have around 2,000 poles, and it's to test everyone, 500 of them every year, and keep going around. So the next year, another 500, when you're done, you're back to the first. And try to keep ahead of some of the pole breakage. And then like now with AT&T renting pole space, putting stuff up, finding a bunch of poles that need to be replaced. So it's just, it's a proactive measure.

How long would a drill bit last? So the drill bit, uh, you buy them in packs of 10 and they're not super cheap, but they last a while. I mean, 10 years? No, 5. I would think, I would think 1 year.

I would think you would probably use 10 of those drill bits a year. Yeah, I mean, they're—. We call them drill bits, they're really more like a needle. I understand he said drill bit, so I understand that's how to explain it, right? There's a really long— they just put it in parentheses, drill bit.

Yeah, so that's the two additions there.

And then before I have you start explaining this slide, um, first of all, could I— anyone, department heads, I've been requested to ask that you speak into the mic more, um, because Becky and Tiffany that are listening are having a hard problem hearing you. But also, at the next assembly meeting in the consent agenda They'll be— we'll be asking for approval for a bond attorney, and the bond attorney needs to be hired soon to start working on issuing bonds— or not issuing bonds, creating a bond ordinance to take to the voters this fall to issue bonds for the standby diesel generator project. So go ahead if you want to, please. So this project has actually been ongoing for quite a while. Quite some time.

We did a study back in 2021 where it— um, so I've been working on it since then. The project itself, you're, you're well aware of, but, um, it'll add 3.5 megawatts of diesel power to our fleet.

Currently under a design-build contract with Dawson Construction to design and build the facility. However, we have bought quite a bit of equipment that goes into this project as well already to avoid any markups from a contractor, get going on it. Um, concrete foundation surrounded by a, a temporary, uh, structure. Um, but so when we started this project, the estimate in 2021 was $4.5 million for the, uh for the whole project. And over time, the utility was able to pull together $5.4 million.

Part of that was a bond that was issued back when we were funding the Blind Slough Hydro, thinking that, you know, $4.5 million was going to be achievable. Well, the current construction cost estimates are right around $8 million. So obviously we have a big gap there. And, uh, We have enough money in our existing budget after equipment purchases to, uh, uh, First at the assembly level, and then it has to go to the voters this fall. And we're hoping that as long as that goes smoothly and the community supports that bond, that the bond sale will actually occur this fall or winter, and so the funds will be available for a spring completion of the project.

The core and shell will be around the building, but all the internal electrical and mechanical systems won't be installed yet, and the commissioning, of course, can't happen until that is in place. So there's a few steps after the core and shell is built, and this bond will help factor it into that. To the 4%.

I want to back up for the new members talking about why we need that new generator. So that study that we did in 2021, you know, we're seeing, um, consistent load increases every year. Um, electrical loads are growing in Petersburg. Um, that study showed that, um, when they look at the, the adequacy of our diesel fleet You know, they're looking at what loads we have to cover, you know, in the wintertime predominantly.

And they, they look at that equation with the whole fleet minus the biggest one, because that's a, that's a pretty common case where no diesel engine is going to be 100% reliable all the time. So they look at it as an N-1 as the situation. So Without our largest diesel generators that we have right now, we're— well, we probably wouldn't be able to— even as a third largest, yeah, and we can't meet it. Wouldn't be able to meet those winter loads, right? That's okay.

So we're, so we're adding this 3.5 megawatts to cover that situation. That report also said as soon as you get that one done you better start working on the next 3.5 megawatts because of the load growth. And so that's— that is in the Waterworth rate study. That's part of the benefits of having that software, is that you put in your capital improvement plan out as many years in the future as you can conceivably plan, and that helps you set rates today to cover those costs. Very important to do that because if you wait until the year before you need that next diesel generator and, and try to raise the money, rates are going to go up 100% instead of 4%, you know.

So it's, it's very important to see what's coming in the future, make, make rate adjustments now so you're building up the, uh, the reserves in the department, um, to cover those costs. To cover debt service costs, because obviously we're not gonna get $8 million in reserves. Yeah, well, I only got about 15 or 20 phone calls after the data center thing, and then I said, well, did you listen to the meeting? Because Carl, well, both of you answered the questions that they had. Well, obviously they had not, you know, listened to the meeting.

But I thought that, you know, that, okay, we spilled how many ever gallons of water and whatever. I don't understand it all, you guys are the experts. But so we have all this power so we can handle the 2-kilowatt, whatever, transformer for the data center. But people have questions. I mean, when you go into negotiations with this data center, it's like, how are you going to assure that you're going to keep the rates down?

Because a lot of people in town have trust issues with that. And then the next thing we're going to do is, well, let's all vote on a bond to build a generator in Scow Bay to create more power that we told you last week we have plenty of power. So, you know, we're going into some super El Niño according to my rabbit hole conspiracy theorist scientist guys on YouTube, you know. So I don't know, maybe just speak to that a little bit because I'm going to have to answer to the people and I'd like to be able to answer them. I got—.

I literally have a voicemail of people calling me. Oh, I truly do. Yeah, so it— you're, you're looking at two different issues, and you'll see where it comes together. So we need the generator. We have plenty of power until SEPA gets cut off from us because of a marine line, a cable getting cut, or a landslide, or whatever, falling on the tree falls, and then we got to create our power internally.

That's where the lack is, is when we don't have—. Hence the new generator. So that's when we say we have plenty of power. We do. And then, uh, and then when you go back to how is this going to keep our rates down, I will use my favorite analogy.

Is say in Petersburg, you can— there's one spot to buy pizza, and you have to buy a whole pizza, and that pizza is only good for one day. It disappears after that. So you want to go buy a piece of pizza, but the whole pizza is $20. So that slice that you're going to eat costs you $20. But if you and Bob go together, each of your slices are, uh, $10.

Well, you get James, Bob, Rob, Bob, and each of your slices is $5. So each of those slices is a kilowatt hour. So the more we sell, the cheaper it's going to be because it's our— it's covering our fixed rates. This $9 million or whatever. This is the when the poop hits the fan plan, right?

So as Steve said, these— it's two different things. This is our backup when we don't have hydro coming down, you know, uh, the transmission line. And, and, you know, Petersburg, every other Southeast Alaskan community has diesel fleet to cover that, you know, uh, eventuality. Because there's, as I said, there's no way that Well, at least, at least 15 out of the 20 calls I got understand you better have a contingency plan or a backup plan, right? Yeah, that's why you have a spare alternator on the boat and whatever else.

So yeah, exactly. Truth of it is we could go without having diesel backup. So what happens if we lose the SEPA connection? How cold do you want to get? That's the issue.

Yeah, typically, you know, you're talking it's like 2 hours to get back on, and yeah, that's uncomfortable and people grumble and we can live with it. But remember the submarine cable when that fell, and remember the landslide. So now you go from a couple hours to a couple days to longer. So that, that's why we need it, not to cover our loads every day, to cover our loads when we're not connected to the hydro. Tai, and this project, this diesel project was started way before we even had anything claiming that data center was a possibility.

They're not related. And we're only in— and basically you're only asking for $2.5 more million to be done. And this is just the construction of the diesel power generator that we already have and that the voters already voted on. And okay, yeah, yeah, just be the electrical mechanical installation. Yeah, all equipment's bought and paid.

And unfortunately the price went up. I mean, let's call it what it is. I mean, it's Yeah, where are we in any kind of thought process about the backup electrical storage system? So that's a— that's another thing that, uh, we'll, we'll talk about when we get to the budget, but I can give you a preview. We talk about later, that's fine.

Um, well, I don't know if it'll come up, but part of, uh, part of our, uh, professional services is going to look like a giant leap in our expenses, but that, uh, covers a bunch of FERC-related stuff that we have to do. We can't, we can't not do it. And then two design feasibility studies. The one that Jeff brought up is a BESS system, battery energy storage system, to go out at the hydro. And what that'll, what that'll do is, one, if we do have a landslide and we generate power in town, the hydro can keep running out the road, and that battery will set the voltage set point and the hertz.

You know how on your boat the generators go up and down? It'll cover that. But the biggest improvement for everybody in town is when something happens at Ketchikan and a tree hits the line and we get the brownouts here, it'll help smooth that out. So that's, that's the one design study that I'm pretty excited about. The other one is we're sitting on reserves to cover the Main Street transformer that we have over here, which quite frankly is probably nowhere near enough money sitting.

It's a unicorn. So the design study's going to look at one, if we replaced it as is, how much do we really need and how many years for half a decade before we get a new one. Or look at putting two smaller transformers to do the same job for half of what we have in reserves for to free up money for some of these other capital projects. That's kind of what we're looking at. And then the best one, there's a lot of federal and state money out there for free.

So, I mean, realistically, you could look at paying 25% of of the project out of— from us and the rest of the government. So that answer your question, Jeff? Any more questions for Power and Light? Bob, how would—. If we had another 2 megawatts at Ocean Beauty for data center, wouldn't that trigger another need for another 2 megawatts diesel, uh, extra capacity?

Hypothetical, because there's no agreement with between Greenspark and Missoula. So no talks with us, but our— we're gonna come up with a contract, or however, however you phrase the right word, uh, for the rates that we can tell them to shut off when we need to shut off, or, or pay the, the diesel cost if we have that capacity. So you—. That's why you guys brought it up. Yeah, we have this perfect little puzzle piece that fits right there.

Yeah, and we're not going to go over because you guys already explained that to us. So the diesel generation capital improvement plan, like I said, we, we did this study in 2021, so we've been thinking ahead for this current— this Scowby Generator 2— to get that online, and then it's, it's in our rate study to start working on the next one. All of that work, all that study, you know, was done before the data center came up. But, um, we're confident because of the fact— the agreement that Steve mentioned, we're going to put it to them and let them decide how do you want to do this. You want to pay for fuel or do you want to shut off?

And either one of those scenarios protects all the other customers in town from additional costs. And if we don't have the capacity, yeah, they'll have to stay down those days when it's super cold because I mean, you look at our diesel capacity now, we're good most of the time in the winter when, when the peaks are up there. But we have those— I don't remember my slide— that 13.8, uh, megawatt peak that we've had like 3 times in the last couple years. Well, we have 13 megawatts of generation, so that's when you got to decide to shut people off. And, and we were very upfront when, when Greenspark was asking questions, saying that there'll be days of the year or we're going to have to tell you, you can't be a customer today.

Is that going to fit your business plan? And they said, yes.

The other questions.

Too many. So here's just a list of water and wastewater major projects. Um, we've seen most of them on last year's or this current year's budget, except for the outfall repair project. Just for the sake of time and things, does anyone have any questions about those projects?

And they're listed in the budget with descriptions and amounts.

Okay, I'm going to move on then.

So this is a list of the state revolving loan program loans with water and wastewater. Remember, these are loans that are at 1.5% interest. And in some cases, like the Pump Station 4, they've pledged to reimburse— or not reimburse, but forgive— 16% of the principal once that project's done, which is about $540,000, $530,000. So this is just a list of all of the projects, or all of the loans we have. We have the water treatment plant is almost paid off.

Paid off. These were usually 20-year loans.

Jody, back on the last one, the, um, we on that Pump Station 4, that money's in hand to finish that project number 4? Yeah, well, we ask for reimbursement every quarter. It's almost done, uh, the project's almost done, right? I believe it's almost done. Yes.

Yes, uh, we are— well, actually, they're pouring concrete this week on curb and gutter, um, street very soon. Uh, substantial completion has been met, and I— project should be done, I would say, in June. Grass seeded and trees planted and make it pretty. Any increases over what we have budget for that? So is that road stain then that's across the street from— I'm just curious— across the street from Curry's?

That's going to be a service access road. Yes. Okay, I get asked that question quite a bit. That's not pretty. It's graded really nicely now.

It is, yeah.

So that will be— since you're not getting anywhere— so that's gonna be the start of the walking path then, the road, and then it— okay, okay. Like flower pots out there or something? Sounds like parks, right? Sigma T with her extra 6 months.

Sanitation, so a $60,000 estimated increase to the bail disposal contract with Republic Services. Aaron, do you wanna talk about this a little bit? Are you working with CSQA just trying to figure out something for next year or following year? Sorry, fiscal year '28.

Oh, what we did this year is we did a 1-year contract extension with Republic that would get us through the CSWAS study, and then based on their recommendations, we will likely be seeking a probably a 3 to 5 year contract with the same provider contractor.

You brought that forward last time though. There was a thought that they would no longer take a contract with us. Is that changed?

I think last year what they were— what Republic was proposing to us was that we would have to provide our own shipping containers, and that It's just not a feasible option for us, and we made a lot of noise about that, and they've since— they pulled that back and they will not be requiring us to provide our own containers.

But no, they're more than happy to take our garbage. OK, thanks. Aaron, can you talk about what the status is for the $100,000 sprinkler system? It's been on the budget for a couple of years. Now that is, um, that's something that Chris Cotta put in there quite a few years ago.

The sprinkler system is original to the building and it is aging, has a lot of corrosion. We just had it inspected a couple of weeks ago. They said it's still serviceable. There's low pressure in the system, but they said it'll put out a fire. So that $100,000 is essentially a placeholder.

We would have to get it completely re-engineered and, and get an estimate.

Any questions for Aaron on sanitation at all right now? OK.

So the Harbor Globe budgeted a couple placeholders for the sea float stall replacement of $1.3 million and the drive-down approach paving, as well as $400,000 for the feasibility study. Does anyone have any questions about that right now? Is that the— for the replacement? That's on— that was part of the rate increase we did. Is that— you have it on hand for those?

Yeah, we have it on hand. Um, I, I did submit a, a grant request for, uh, municipal overmatch grant for 50%, waiting to hear. They are just coming to the table now to start evaluating those grants, and at some point we'll see where we rank and to see where the legislature decides to— if the governor decides to fill that or not, or— and then wherever we fall in ranking, we'll see if we get some money. Would this be the whole sea float or just the—. No, it's 4 finger floats.

4. 4 Or 1.3. 1.3. Yikes. That's realistically how we will probably replace a $100 million facility.

That's what the South Harbor is going to cost you, you know, to replace. So anymore, that's how you do it. You're going to save and chip away at it.

Those are 1972 vintage finger floats that came over. From the old Middle Harbor when the, when the, uh, South Harbor was brand new in 1984. Oh, what's the monthly stall rent on those sea float fingers? They're between $250 and $275 a month per, per finger, so both counting, getting on both sides.

How does that pencil out over how many years to pay for a $100 million? You'd probably get a new South Harbor. No, I mean, uh, $275 a month. And if they're, uh, well, you're $300 grand apiece, I could take like 100 years to pay for one of those.

But we get grant money, so that helps.

We have 577 stalls. You can do it, you can do it by the stall. I think it just seems un— it just doesn't seem to, to work. Yeah, it's the finger floats are deteriorating pretty much across the board, right at the same standard. Um, these 4 are just, uh, 15 years older than the rest of the harbor.

So they came in, you know, with half of their life. Well, considerably, you know, we, we made, we extended them for 50 years beyond what their life expectancy has been. So we've got a lot of value over out of those 4 particular stalls versus other finger floats that are going to have to be replaced probably earlier. So. To get to the— The base issue is it'll never pay for itself before it needs to be replaced again.

But with the help of federal and state grants, you can get closer, and that's what we rely on. I mean, as those things go away, it becomes harder and harder to keep the harbor in the shape it needs to be in to support our fleet. But the truth of it is, yeah, the numbers don't add up. That's why we, you know, we have that Municipal Harbor Match Grant, and that's why we exercise it by putting in for it regularly to show the state that it's a very important piece of keeping all harbors across the state up and running. But yeah, we replaced the North Harbor 10 years ago, and that was, you know, that was a $10 million project.

That, um, that we, you know, we put in much money for that. That was a couple million dollars that Power and Light came up with to put power in down there. So, and we put in $2 million, and the state came, gave us $3.5 million. So we put in $4 million for, you know, that facility. So there's lots of things between what GLO does and we do that we don't recover anything back for 50, 60 years.

You want to—.

You see in our— my budget, um, Jody Fat figures it out based on 50-year replacement. It's $1.3 million this year for, um, putting away for our, uh, our annual— what do we call it— depreciation. Annual depreciation, and, and right now, you know, we, we annually sock away from our revenue stream about $200,000, and whatever raw fish tax comes in, we sock that towards it. So we're bringing in towards our depreciation roughly between $400,000 and $500,000. So we're sitting on $4 million, about $4 million now that we've brought in since we were broke when we built the North Harbor.

And then when we were broke, when we went to dredge the South Harbor, and so it's just, you know, that's how we keep the balls in the air. But if we were to have at the end of 50 years, you know, the needed money to replace a facility, we'd be having to double our rates across the board.

Bye-bye. Go ahead.

Hey, Scout Bay vessel haul out. So I was trying to think back of when we've had such a big project run through the borough, um, maybe the drive-down dock perhaps. I mean, this is a $15 million project. I thought I'd just make a slide so, um, we could talk about it if anyone had any questions for Glo or Liz on this.

And in the— just in a periphery to this, there's no money in there for the fire hall or the training centers, correct?

They don't have any huge projects this next year, just regular maintenance items. Medicaid for assisted living had gotten behind with the transition of staff up there, of department heads, but we— Michelle's almost caught up for everything. We— I know we've talked about it operating in a deficit. I'm waiting until after fiscal year end to get the final audit numbers to present to the assembly about, you know, maybe talking more about what we're going to do in the future with that facility. But right now it has a negative fund balance.

Motor pool. There's 2 replacement vehicles budgeted for next year, like a garbage truck and a police department vehicle. Is that the truck? Yeah, it's a truck. Questions?

I got one. Good. Um, thank you for putting this together. I know this is a lot. And then question is that, um, when you went through and did the budget, uh, this year, um, how much this year did we have to like pick into our reserves in order to balance this budget, or did we?

We did not, so we're still sitting okay, at least. Or are you talking about the current budget that we're in right now? Yes. One, one you're talking about next year that we're talking about right now. How about both?

This one that we're in right now, we've had to go into reserves, but I would have to get back to you on how much. I mean, we probably will be up on our investment income. We're looking a little higher too, so it might wash. Okay, and as far as the general fund goes, I can't speak for all the enterprise funds. That would be amazing if I could do that right off the top of my head.

And then next year, yeah, we balance the budget for the general fund. And yeah, we didn't have to kick in the reserves at all. Sweet. So, but again, we haven't— we're in the middle of negotiations with our largest—. I'm not saying we're not going to.

I'm just saying I don't know how that's going to turn out. The whole point is to not go into our reserves and have a better reserve every year. And so, you know, doing this is a pretty good job to be able to fund all the new things that we're being able to fund. So thank you for doing that. Yeah, yes and no.

We don't want our reserves to get too big either because that means we're getting the money from somewhere. So it's kind of always a balancing act to make sure that reserve target is right where we want it to be. That makes the auditor happy and You know, but we definitely want to keep money there, but we also don't want to, you know, put more money there than we should.

Tax notices go out, we will hear. We're hearing about it every day. Yeah, I know you will hear about it every day. So, and that's another point I probably should make. There will be a resolution.

For the assembly to approve on the actual mill rate that's in this budget. So if that mill rate isn't approved by resolution, then that change— that's going to change this budget. So it's probably— I'm going to bring it to the assembly the second reading of May.

I think I'm way too approachable because I get too many phone calls. I'm going to be less approachable. I want to go back to page 32. Within the last couple meetings, we looked at the Scow Bay, which is exciting. There are some things to work through there.

Um, so the fire hall, it seemed like that was all untouchable, it's going to stay where it is, the fire hall that's there at Scow Bay. What— because that's the impression I got at the meeting. Um, so the mayor and I met with some of the staff to talk about what are we going to do. With the fire hall. So fire hall building can stay, um, although there's some impacts on it.

The training materials have to be moved both for construction as well as in the future, and that's— so we've got to find a new place for that, and we don't have it yet. Um, so that's why we're kind of talking to them as far as our group goes to figure out what are the possible locations. It's harder than you think. We want someplace that's got access to water. And, you know, we have no money set aside for land purchase.

So that's part of the issue as well. So it's gonna be an ongoing conversation. Do you have any idea what the cost estimate will be to be moving that, the training part of it, right? Is that tower or a building? I believe Aaron Hankins had an estimate done by, Alan Murph, and it was well over a million.

Did I get that number right, Erin? Or where do you go? He asked how much it cost to move it, right? Well, to relocate it, I guess. I don't—.

That's to build a whole new site is what—. Oh, that's to remove it, but to actually move it to where? Well, temporary. I got some questions on it, so I was I'd bring it up over here. So I'm sure after the, you know, tomorrow—.

Yeah, I mean, the biggest challenge is it's cheap, as Liz points out, it's cheap to move, but you have to move it to a location that actually works for the fire department. So that's where it gets tricky, um, you know, I mean, and, and so, you know, the estimate I gave you from Alan Murph was talking about a location and then the cost to build the infrastructure to get the water to that location. So, yeah, sure, if we can find a location to put them in that already has water and is already— has a rock pad that fire trucks fully loaded with water can drive on, then the price tag goes down quite a bit. But we're not there yet. We don't have a location like that, and that's what's taking some time and effort.

And so by By moving the leaseholders out of there, getting them out, and, and to grade that area to start this project, we're going to do the same thing again once we have moved the training towers? No, the training tower, training tower and the, and the containers that they use for various training as well as storage have to be moved before the grading of the of Skull Bay.

Okay, so then that's coming up here. Sure, but we, we don't— and we can move all of that. We have a location to move it to, but it can't be functional. That's the difference. And how does that work with the fire department's training program?

It, it puts them on in a tough spot for however long it takes us to find a new location for them that's permanent.

Does it make sense If we're moving that, I mean, I have this on the agenda for Monday's meeting, but, and we can talk about, but does it make sense to move it twice? Or does it make sense to, to move, find a spot and move it while we're—. I mean, that's what we've been doing is looking for, and we have not found a spot yet. So, you know, we had to have a contingency plan that says we can move it so that we can move forward with Skow Bay, and that's in place. But we don't have a location that we can move it to and just move it once.

That's part of what this—. You're saying it's not easy. So there's no borough property that would work, and there's— so we're looking for private land, somebody with a private lot. You know, there are some borough property we've talked about up there by the, uh, was it the water plant? The pole yard, Aaron?

Or is that the wastewater plant? So that up near there, potentially 14th Street, but we haven't— we have not talked to Aaron Morel or—. I've talked to Justin. Looks like he's got—.

This is what happens every time we come up with a possible location. There's usually something, you know, issues are—. Has the land already. Is it already developed? Which, no.

If it's developed, it's already in use by another department. Is it—.

Land's not cheap. So not giving up. I mean, we're going to keep at it, but it's, it's, um, I mean, we, we, we very well may be moving that equipment before we have a, a formal home for it in the future. Okay, thank you. I don't want to stop Scal Bay.

I mean, that's too, too important. I understand, but we're trying to Just like I said 10 minutes ago, we're trying to work through a couple things that are— that would be nice if it was something more smooth. I guess I do have a quick question since we're on here now, it's in my head. Um, what is the, uh, like footprint that you need, like, just for the building part? Just curious, off top of your head, do you have any idea?

I have a secondary question. Square footage. Square footage. So right now we're currently using Hopefully have—.

So a lot of predictions are on ballots. You all try, but 100/100 is what you could use.

So I'm just thinking out loud, of course, but it seems like everywhere around Petersburg and everybody is extremely tight. It's a very large facility. What, what have you looked at just expanding your parking lot? Up at the fire hall up there? Yeah.

I mean, you guys have tons of room. I mean, you have a lot of big equipment, but Issues the airport. So I have— oh, last time I asked, okay, well, what criteria are you basing that off? What are—. What is the actual—.

Or even just push behind because that's borough land behind, right?

So I can go back. Everyone probably—. When they built the fire hall. We looked at potentially building the police department there. The cost to just prep the site then, so that's a lot of years ago, was well over $1 million in rock.

I can't imagine what it would be today, but it's cheaper. Probably. Anyway, that doesn't mean it's out of— that still may be the cheapest alternative, but it's not free for sure. And I don't think there's any—. Be better just to move it once, but absolutely agree.

But, you know, there's other variables here. Thank you guys for coming. This is like, not often do we all get all the heads together. We can ask questions to you guys directly. So yeah, that's— I'm done asking.

You had a question, I think. Yeah, one thing that helped explain it to me, Glo was saying, we're getting millions of dollars in grant money to resurface that. And as a boatyard. And if you're bringing back flame and soot back to your boatyard, it looks a little sketchy, like you weren't really committed to this boatyard. So there's no— it's not coming back there.

So it— that's clear to me now.

And, and there was 3 or 4 options they were looking at. You got to let— we got to let the staff some time to work through some of these options.

If you can find a private chunk, private land, 150 by 100 or whatever. Maybe found some private land, but you know, it's a combination. It's, it's finding the right kind of private land close to the highway, close to water, and that's, that's been hard. But anyway, I know you do. You have a warehouse up there selling that, Bobby.

Conflict of interest. Any other questions?

Any other questions? No. All righty, thank you. We'll call it closed and thank everybody for coming. Thank you.

This was—. This.