Anchorage Assembly: Worksession re General Government Operating Cont’d & Enterprise & Utilities

Okay, I think we're going to get started, so I'll ask folks to take their seats. Take conversations outside if you would like to speak outside. And I know we have some members on the phone, so letting folks know that we are getting started and we have enough people assembled in the room. So I'm going to call this work session to order. Today is Friday, October 23rd.

We are noticed in this room from 11:00 AM to 4:00 PM with, of course, a couple of breaks built in. We'll talk about that shortly. We'll start with member introductions in the room. Janice Park. Donald Handeland.

Sydney Scout. Erin Baldwin Day. Anna Brawley. And then on the phone, we have at least 3 members. I see Mr. Martinez.

Yes, Chair, thank you. Ms. Silvers?

Yes, here, thank you. Mr. Johnson?

I'm here. And is there anyone else on the phone I'm missing?

Okay, I'll just keep an eye. I know it's been a busy week. So also we're joined in the room by members of the administration, various departments, Clerk's Office. I don't think we have any members of the public at this moment. So we are here today to talk about the FY27 proposed budget.

This is the second of our two work sessions on this topic, the third one being about assembly amendments, but these are the presentations from Mayor's Office and Administration about the proposed budget. And last week we went through most of the capital budget and our enterprises and utilities budget. So this week we are turning back to our general government operating budget, and then I'll also note the one thing we didn't get to last time was discussion about project management and engineering and the roads part of the— roads and facilities part of the capital budget. So we will be turning back to that at the appropriate time. Before I turn it over to Mayor's Office, I'll just briefly note, please text me or flag me down in the room to be in the queue.

We do have a lot of content. You will notice that this presentation is much thicker And for folks online, there is a presentation. It should be in your email and it's online. So we have a lot of content to cover. So I'll remind folks, I know there's a lot of interest in kind of operations and a lot of those do relate to the budget, but I'll kind of ask folks to keep questions, if possible, sort of high level.

If it's something that is in-depth on the operation of a department, please take that offline because otherwise we will run out of time. So we want to make sure that we get a good overview and make good use of our director's time. I will also note that we will have a parade of directors coming through throughout the day. I will go through in kind of what order we'll talk about those departments. And so this is a great way to ask some questions and then also kind of flag them down for offline conversation as well.

And as I said, we will take a couple breaks and I believe lunch will be provided as well. So with that, I will turn over to Mayor LaFrance to give an introduction. Thank you, Chair Brawley, and hello members. Thanks for being here. So on Tuesday in my report, I noted that As you all are aware, we're entering critical discussions on where we want to go as a community with levels of service and how we fund the services that we have.

We've had a tight municipal budget this last decade, and we're down to the end of our special funds. We use the rest of the MLNP sale funds to close the current budget gap. So again, those community conversations are critical. I know that you all saw Director Brause's presentation last week, and it generated some interesting questions as well as conversations about potential solutions. And I'm looking forward to continuing those conversations with you and with members of the public as well.

I do want to say that if you have any questions, please don't hesitate to reach out to Director Brouse. And I know some of you had. I wanted to mention that not every single thing that we do is listed as a line item in the budget. So it can be confusing to folks, especially members of the public, our constituents who come and ask if certain things are funded, and they don't see necessarily that specific line in there. So thanks for your work on this.

I appreciate that we share a constituency and appreciate your service. Thank you, Chair Braley. Okay, thank you. Next, I will turn to Ms. Brause, our Office of Management and Budget Director. And I know we're gonna get into our presentation, and then I'll also note on page 2 of the presentation is a general schedule, so I think we can briefly cover that, and then I will turn it over to Ona.

Please proceed. Thank you, Madam Chair. Hello, Assemblymembers. It's good to be back with you again for a second marathon, 5 hours. Do real good.

Be exciting, I promise. We have— we'll do a slight recap of some of the budget content from last work session, particularly around operations and potential cuts, but also go through all of the departments as Chair Brawley mentioned. We'll start with the Safe Anchorage pillar and the departments of Health, Police, Fire, and Alcohol Tax, and then we'll move through the lunch break into Building Our Future. We split Building Our Future into two subcategories of neighborhoods, trails, and transportation, and the Housing and Development section specifically to organize the conversations around the operations that these departments participate in. For the most part, we included ACDA in the Building Our Future segment because they were not part of last work session, and so for continuity and frankly time, we did not want to leave the utility partners.

And we go through a short break and into good government, which is the rest of the municipal departments and the internal service departments, and probably wrap up the day. Any questions on what we're doing today? Okay.

So we can go through a quick recap. This is some of the same content that we used in the last work session, and this is just to remind us of what our annual budget process is.

Our capital and operating budgets have different timelines and different process steps involved. The 2027 priorities of the mayor's budget: strengthening the municipality's recreation economy, revitalizing and reenergizing neighborhoods, preparing for growth, and common sense solutions for energy resilience. That's a big cost item, frankly. The budget highlights are continued investment in street maintenance, continued support for existing public safety efforts and infrastructure, as well as some additional conversation around police and fire changes on the capital side, tackling the housing crisis, invigorating Anchorage public spaces, and funding crisis care outreach and connections to housing. Ms. Agnew-Bemben will be here later to discuss our Safe Anchorage Community Budget, which will show all of the different funding streams, not just the general government and alcohol tax, funding that we use, so all the other funds that are leveraged as part of our process.

The org chart and our reorg for the 2027 budget includes the change to Chief Fiscal Officer and Office of Economic and Community Development reporting to the mayor. This is— I'll take a moment to explain something that is very challenging within the municipality. We reorg on a recurring basis. I won't say a regular basis or an annual basis, because it is not annual or regular. It is recurring.

And the challenge with that is that the way our system of record works, SAP, the budget detail and all of our information is presented in the current org structure. So if departments have moved over time and been re-orged, then the budget activity for 5 years ago will look very different than the budget activity from this current year in its current organization. And the, and the easiest way to see that is the Risk Management Office moving around because it has such a large budget and it tends to operate at a deficit because of the type of department it is. It's moved between the Municipal Manager's Office, the Chief Administrative Officer, and the Municipal Attorney in the last 3 years, and each place it it moves, it creates a whole different budget picture for each of those departments because other than that, their budgets are relatively small. So the Municipal Attorney's Office, because it has been moved into legal this year, the Municipal Attorney's Office has a very large budget this year and has added staff because risk was included.

And, and the problem is then the look back of all of the other budget to actual years is organized in that way. So you have to do additional math. It's not as simple as what you look at on the face. That's just so that people know when they're looking back through historicals, there are some challenges there. The looming fiscal cliff, the $15 million budget gap, and how we made effort to close that gap this year by using our one-time funds, as Mayor LaFrance mentioned, and reducing reliance on contractual services while eliminating vacant unfunded positions.

I believe we'll have an AIM to the assembly on Tuesday with the 12-month-plus vacant recurring funded— vacant recurring funded position information. And as of right now, there are 3 that remain in the budget, and we can talk through why they still remain in the budget and what the intent is for those.

The operating budget summary, total appropriation of $692.5 million, $383 million tax cap, and $34,000 under the tax cap. Police, fire, and maintenance and operations make up about 50% of our operations. When you add debt service, that's 60%. So the rest of the municipality is 40% of our operational cost altogether. Any questions so far?

I have one, and then Mr. Handeland, and this is just a general question I want to put on the table. I think if there's a brief answer now, that's fine, but I think it's something just to think about. I've heard from a few folks kind of this general choice of kind of closing these gaps with one-time funds. We know the implication of funding under the cap, which is that that goes away forever. But I think the question has been raised, especially with choices made by, for example, ASD over the years, to use one-time funds to kind of blunt the impact of a decrease.

So if there's an answer now, that's fine. Otherwise, we get into it. I think the question is, you know, is there an alternative where we maybe hold on to some of those more one-time funds for future needs, and then what is the trade-off of that? And so, and I know that that's a very broad question, but I know it's one that's going to get asked, and other members are probably being asked. And so I just want to put that on the table knowing that there's trade-offs with everything.

And to the Chair, I think the, I don't know that there's a direct answer to the question right now, but I think the real answer is that it is all about trade-offs, right? Off of 3 years ago when we started having this conversation about what the budget and revenue situation looked like and where we were going to go, we talked about the MLNP fund and the fact that there was funding in it and we were using it in a way so that it would be able to last us multiple years as we moved forward. I think that that can sort of get lost in the conversation in terms of a year-over-year detail, but there are absolutely alternatives, and that's why we're having the rest of this conversation, so that you can understand that using that money means it's used and gone, or you can make a choice that results in some sort of change within the budget. And, and so the next few slides and this whole day, I believe, will be talking through those realities. Is there a place where the community or the assembly sees that that trade-off should be in a different way?

Then, then that's when we make the changes through the amendment process and final budget approval. But, uh, I— that's— this entire conversation is about the trade-offs we are choosing and which trade-off sets us up in a way, uh, that gives us what we are actually looking for, for the future. Um, I look forward to hearing what they all say. Yeah, thanks. I think that's just something that really is the layer over pretty much this whole conversation.

Mr. Handeland. Yeah, so my question is, I mean, as a kind of digested from the last meeting with the fiscal cliff. Can we anticipate, I guess, a proposal for revenue generation for this next April ballot? Because as I was kind of like backing up for anything to be implemented and really in place, it really would need to, I guess, be in place fairly soon. Through the chair to Member Hanlon, yes.

I think to me, the way this conversation works is we start here in this proposed and approved budget process, and then we have the rest of November and December and January before we get to what has to be on the ballot. The last meeting in January is the meeting that all of the ballot language has to be approved. And so there is a sort of cadence to this where we can go through the proposed, approved process and then pick up revenue options and potential further cut conversations or adjustment conversations. We can make changes to the capital budget as it moves. And before we land in January, January, when we have to finalize the bonds and the ballot measures, we will have had the conversations about short-term revenue, long-term revenue, what is possible, what conversations do we want to have with the community.

And then through the first quarter budget process between February and April, we can continue the conversation about how we change the budget before we get to the final levy. And then once the ballot is decided with bonds and capital projects, those go into the revised process. So we have all of that information to consider at the same time. We have the school district budget that we are aware of at that point in time. We will have the majority of legislative activity ideally completed for that session.

And, and, and most of our question marks on funding and potential changes, uh, either on the policy level or the revenue level, um, will be known. So we'll be able to make make a more informed choice on how we sort of braid all of those things together.

I would also say any member can bring any ordinance to the body, so that is an open— and anybody has action to do that. Now, also note, we were joined in the room in person by Mr. Gerker and Mr. Johnson at 11:17. Ms. Baldwin Day. Yeah, I wasn't exactly intending to ask this question, but I think Member Handeland sort of went there.

In the appendix, this is Appendix F, there's a list of— I'm looking at page F-5. There's a list of bonds that have been authorized but unissued. And I'm wondering why that is. I mean, the total is $158 million in general obligation bonds that voter— as I'm reading this, I think what it means is that voters have authorized these bonds, but we haven't actually gone through the process of issuing them and receiving that revenue. So I'm curious what that's about.

I mean, some of these date back to like 2021, 2022 propositions. So through the chair to Member Handeland, or to Member Baldwin Day, sorry, I was looking at Member Handeland. Through the chair to Member Baldwin Day. How dare you. That's right.

The reason for that is because Public Finance does not issue bonds until the money is actually required because it accrues debt. If we bond for a project and there is no either demand or need for that money at the beginning of the project, we will roll the actual bond issuance over time. All of the bonds that are approved at one time are not then immediately issued and roll into being financed and accruing debt. So we try to preserve that debt accrual to as short a period as we possibly can. And so if we don't have the demand for the revenue, we don't push them through the bond process.

I think the other challenge, particularly around the '21, '22, '23 era, is the ACVER. And there was a— year where we did not issue bonds. I think even longer than a year, maybe 2 years where we did not issue bonds because of the ACFA. And that actually has— plays into the sort of missing pieces in bond issuance, but it also plays into the way our debt service is bouncing around because we, you know, didn't issue for 1 year. And so we broke the pattern across the— it's, it's, it's all part of trying to conserve money, frankly.

And is, is the reason that we don't, that we're not really prepared to issue those bonds because we don't, I mean, a lot of these are capital needs. Is it because we, we don't have the staffing or the manpower or the contracting ability to like have these projects shovel ready?

I guess I'm asking is what's, what's the What's the backlog? Through the Chair, Member Baldwin Day, yes. And the main reason for that, obviously, is in the last 3 years we had, like, severe vacancy factor in a lot of our departments that actually execute the bonds. And so there was a backlog of bond activity that still needs to be completed. OMB has incorporated that reality into our process when we're going through our annual review to see how much bond project, how much bond activity activity still remains within departments that they need to complete before we even go to request or take more bonds to the ballot so that we can, so that we can only put out on the street what we can actually execute so that it is a reasonable process.

Thank you for anticipating my next question. Okay, I'm good. Thanks. If I could jump in there, I'll just say that is a general reality. And then there's also just particular stories that go with a lot of them.

So if you're looking on that Appendix F, you'll see there's a 2024 CASA bond that hasn't been issued. That was for Canyon Road. That one we voluntarily slowed down because the state said we're going to tear up the road right in front of it. If you wait to go after our project, that's going to be a lot more sensible. So there's a little bit of the story for every single one of these.

Okay, let's continue. Okay, so part of this conversation, and to the chair's point about tradeoffs, this is a very dense slide. I apologize for that, but it is a useful piece of information in terms of thinking about what we are looking at and how we have to contemplate our departmental operations and their funding realities for potential cuts and what that would mean to their service level and their operations generally. So we can walk through the structure of this slide and then sort of talk through some of the details of it. This is the potential cut scenario, including a 5% direct cost target.

So this year, the mayor requested that the departments submit department budget proposals that are flat and also that include a 5% reduction. The flat terminology, for those of us that don't understand how nuanced that may be, means that the departments are responsible for determining the path to take on any increased costs that they know on their non-labor side. So if they have contracts in their department, like the Health Department has Animal Control, Transit has anchor rides, and various other contracts all throughout the municipality. If you know that that contract has an increase coming in your next year operations, you as a director have to figure out how to reduce the rest of your department so that that contract can continue forward and OMB takes care of the labor side. So it doesn't mean that they are getting the money to make their budget whole.

It means that they are figuring out how to make a reduction to keep the revenue they have the same while the labor side grows because it is contractually required to, or determined as the administration and the assembly add to execs and non-reps. That is important because that has been the behavior in the municipality for at least the last 10 years. Labor is essentially a guarantee and non-labor is not. This is very important as we get into some of these larger departments like police, fire, and health, because their non-labor budgets have not been updated in the way that they should be, which means that they have been adding and incurring costs over the last decade that have not been added to their non-labor budget. So their cell phones are not included in their budget. The cell phones were— when did they go in?

'18? '19? '17? Somewhere around there. It's a $400,000 cost, but there was never the revenue to put into the budget specifically to add that.

So they just make it work. And that is why it is dangerous when we are talking about cutting non-labor and we think that it's okay because there are really really constrained budgets on the labor side. If we look at our spreadsheet, this is a relatively bad example, but I'm going to use it anyway. If you look at in the second section, internal audit, about three-quarters of the way down the page, their manageable non-labor amount is $9,000. That means—.

And that's their non-labor amount. So internal audit is only 5 or 6 people, I believe, but their non-labor is $10,000. And That is not enough for a municipal department to operate when they print paper and actually do a lot of work that requires non-labor supplies. So we have departments who have to supplement their offices with things from home, right? And that's not appropriate.

So looking through these things, we see a lot of different kinds of disparities, but there's a real challenge on the non-labor side because it is not contractually required The municipality has not been funding non-labor as it should over the last decade. When we go through this and look at their 2026 direct cost total, that is the amount the department takes in direct costs. The manageable direct cost in the next column is the amount of money the department has in direct costs that don't include things like debt service that they can't they can't change on a year-over-year basis, or service area activity that is determined by a service area that feeds into their revenue stream. So then they are not in charge of managing that amount within their budget. They still need to take a 5% cut within that manageable direct cost section, which means that if you have A department with a lot of debt in it, a department that does not have a lot of manageable direct cost, like, let's see, where's real estate in there?

The bottom of the first column. If you look at real estate's direct cost, it's $8.6 million. But the manageable direct cost is $2.5. And that is because the bulk of real estate's budget is made up with leases and contracts for our buildings. And so real estate's sort of 5% target is $430,000, but they only have $1.6 million of manageable non-labor.

And so it means that if real estate is operating with a $1.6 million non-labor budget and they have to realize a cut of $400,000, they likely would not be able to cut that $400,000 from non-labor without sacrificing some of their operations. That also means that jobs would come with it. And so the point of showing the manageable non-labor versus the direct cost and the target is to say that no matter what we do, if we are— if we have to make cuts in the magnitude of $15 to $30 million next year, jobs will come with it because we don't have enough non-labor to reduce. So if there are any questions on how this is broken out, I'm more than happy to answer. Ms. Baldwin Day, then Mr. Handeland.

I have one other commentary thing to jump in to underscore that last point, which is to say, as we think about the term manageable direct costs, that's kind of the jargon that we use internally, but also underscore that a lot of that is not really optional manageable costs. So if you think about the Assembly's manageable non-labor budget, it's not like you have $4 million of discretionary funds that you begin the year with and say, what are we going to spend it on this year?

$2 Million of that might just be running an election, and there's no scenario where you say we're not running the election this year. So when you actually get into the free variables, the choices that the departments get to make, we are all the way down to vapors. I mean, we're, we're to the place now where we're saying, can we afford to buy laptops? So finding a cut of this target, as the budget director said, it's not going to be easy. There's going to be— you'll have to do less with less.

And we'll own—. And for certain, as the budget director said, it's going to come with labor reductions. Because there's just no way to get there from the non-labor side of the budget anymore. I will just briefly note for the record, our elections do not cost $2 million. Most of the time is staff time, and so, so it's not just the cost of an individual election, it's having a functional clerk's office.

Miss Baldwin Day, then Mr. Handeland. Thank you. So, so I, I think what I'm, what I'm understanding is that the really the delta between that 5% target and the manageable non-labor number is is the critical piece. So for example, I'm looking at development services where their 5% target cut is actually greater than their manageable non-labor cost. So I mean, there's— I mean, functionally, there's no way to meet that 5% target without cutting into the bone or maybe the marrow even.

And so the tighter, the closer those numbers are, the more challenging it is to actually absorb a 5% cut. Is that what I'm understanding? Through the Chair to Member Baldwin Day, yes. And, you know, you can't absorb it while you are making reductions on your labor side, right? That is reducing.

No. Let the record show I got an unqualified yes from the Director of OMB. Fantastic. Thank you. Mr. Handeland.

The other Member Handeland took my question.

Amazing.

And at the bottom of the page, it lists that the manageable direct cost excludes debt service, depreciation, and amortization, and the specific service area and other funds that are taken out. If there's any questions on this, we can go into detail beyond that. But in, in this scenario run, we asked the departments to let us know what the cuts could or might look like in terms of reductions that made sense to not impact core services, meaning the sort of very base of their service delivery model. I think that some of these cuts, frankly, do actually touch those core services of our departments, and that's the reason we need to have this conversation. I would like to emphasize that these cuts are not in the budget at current.

They are not proposed at this point in time. So please do not inundate us with lots of fear and concern about these cuts occurring yet, because they have not. But please tell us what you think of them. And when we go through them, these are examples, as I said. So there are other options in some of the departments, but not really that get us to an order of magnitude of $15 to $30 million.

Within the police department, the elimination of 21 community service officer positions and the CAP team would result in a $4.7 million reduction. There are other specialty teams that would also be reduced if we had to realize the $7 million cut that APD would need to if they were to hit a 5% target. Also, the elimination of the mobile intervention team medical officers and 3 of the school resource officers at $1.7 million. The—. In the fire department, the reduction of the Anchorage Safety Patrol service contract, the reduction of battalion chiefs, safety officers, and technical rescue teams, as well as closing Tender 9, would get us a little less than $6 million in a reduction.

A note on that first part that says reduce Anchorage Safety Patrol service contract. The contemplation in that is, do we reduce the service area that it provides, the timeframe with which in it— within which it provides, but particularly, we will be putting the contract back out for bid, I believe, in order to see if we have the best option, and I think we'll be doing that with some of our other contracts when they are eligible, because they have not been bid in a few years, and maybe there is a lower-cost opportunity out there, but we'll find out. Snow removal, the elimination of the 7 heavy equipment operator positions that the Assembly approved last year, or this year, was it last year? This year. I don't remember, frankly.

Which would result in longer plow-out time and increased overtime costs within maintenance and operations. That would result in a $1.6 million cut. In public facilities, if we reduced janitorial service from 7 days to 3 days a week, and removed security posts at City Hall, the Lusak Library, the branch libraries, and rec centers, and ended the Graffiti Busters program, we would save $1.4 million. That cut in particular is a real struggle in my eyes because those kinds of programs are not worth the $1.4 million trade-off in my opinion, because reducing security and ending Graffiti Busters and cutting the janitorial service within our public facilities is a very invisible, if you will, reduction in our quality of life, but very dangerous in terms of the long-term impacts of what happens there. That doesn't mean it's not the best option because it's not a lot of direct service jobs, but it's not a good one.

Public transportation, discontinuing Route 51 and reducing Route 65's frequency gets us a $1.8 million reduction. Closing the Bartlett, Diamond, and Service pools in Parks and Recreation would get us $1.1 million of a reduction. I believe if those pools were to be closed, it would also include a $50,000 reduction in maintenance and operations because they— part of their budget goes towards maintaining these pools. But that's not included in this number here.

OK, I have a quick question, and Member Park, on the public facilities we mentioned the security post, so that would include, for example, security during or at assembly meetings. Through the chair, I believe so, yes, or to the chair, yes. OK, thank you. So I think there's some interesting history there. But also I will underscore these are hypothetical futures proposed, not what is in the current budget that is published.

Miss Park. Thank you. Ms. Brouse, for things like the pool, can we mitigate some of that with user fees? Through the chair-to-member park, we already have. And that is— this is a 40-year problem, frankly, and I don't know if calling it a problem is the right thing to do, but the challenge is that the cost of the pools and these— and the fees associated with them do not support their operations.

The municipality, I can't remember when, but it was 20+ years ago, through other budget reduction scenarios, did cut the pools. And it was a very large community response that put— the school district cut the pools. The pools then came back into the municipal budget and we maintain their utilities and the maintenance on them. So the user fees on the pools are different, and Parks and Rec can speak to how they are different. But the challenge is that they don't make the money that would allow them to be sustaining in a cost model that the municipality can create.

So it's when we get to the point where we say, is this a, a core service within the municipality or within Parks and Rec? And does this mean that we should fund $1.1 million of pool activity over you know, cleaning up parks or maintaining park infrastructure or any of the recreation facilities that do have a cleaner bottom line.

Thank you. Mr. Handeland. Kind of, I mean, similar on that. I mean, I'm looking at some of these cuts and stuff. I guess, are you guys, I mean, I know this is all kind of hypothetical, but as you guys are doing that, are you looking at only 5% across the board or Potentially more in, in some departments because I'm looking at like snow removal versus the public transportation and the impact to more, I guess, people on that.

That's roughly the same dollar amount, but if we're not plowing the roads, it's going to impact more of stuff and then also impact the public transportation. Also, with public transportation, there is the potential to collect more user fees with that versus snow removal. We're not going to go Through the charitable handling. Correct. And that conversation you just had with us is everything we talk about when we talk through what does this mean.

Because it is not just a $1.1 million cost reduction. There are all kinds of other trailing effects that happen throughout the community that we have to take into consideration, particularly when it comes to public safety and street maintenance. But in all of these departments, The operations in some way, shape, or form have served or supported a portion of our community for a period of time that is probably longer than 1 to 3 years, because otherwise we wouldn't be talking about cutting it. The reason these are under discussion or even available to talk about is because these are potentially the least impactful of the cuts that could be taken. Instead of eliminating 21 community service officer positions, we could reduce sworn officer positions.

But the trade-off in that choice is much more challenging for APD's core operations than reducing the community service officer positions. So, so each of those impacts is sort of run through its traps to make sure that we are contemplating all of the challenges associated with it that happen. But also, it's why we talk about them here so that you can tell us what the other impacts of them might be.

And so that you're aware of what might come. But again, these are not happening in the proposed budget at current, but they could happen if we needed to go into a scenario where we were reducing our revenue and our expenses. I'll add one brief thing. I promise I will not cut in all the time today, but at the end of the day, this is the decision of the 12 of us. So I also want to put that on the table very clearly.

The mayor has an opportunity to veto our decisions if she chooses to do that, and then we have the opportunity to override that veto. So the buck literally stops with us. And this is one of our biggest and hardest jobs in a scenario that we're in right now. So I think that's something— the gravity of that, I think, should not be lost on folks here. And it is the other thing, kind of the layer sitting over all of this conversation.

Anyone else in the queue? Just to follow up on that, does the mayor have a line item veto, or is it just budget yes or no, up, down? Good question. So it is a line item veto, and that has been exercised in the past. And then we have the opportunity to override also on a line item basis.

We do not have to take it up as one question. So, and I'm not signaling that that would be where we end up in this situation, but, but yeah, that is, it can be a granular conversation, unlike the school district budget, which we would not have that level of granularity. Jumping in and adding a little bit of additional color commentary in my role as budget hype man today. I think your question about would you actually take these cuts is really trenchant one, and for a couple of reasons. And the first is to say you're right, that if you just say we need to find 5% in the budget, you— it's overly simple and facile to say everybody takes it equally.

You got to go line by line and really interrogate all these things, find out what the ramifications are, the extra negative externalities, whether you can mitigate it through user fees, etc., etc. But it also underscores what this is, which is this is our attempt to really daylight what the kind of cuts could feel like at the order of magnitude that we're talking about. So this is sort of the the first bid from the departments. And I think it's serving the purpose of trying to be truth in advertising, that if we have to go over this waterfall, something like this is going to be where we start and where we have to land. And what I also want to say is there are times, I think, when governments end up in a tight budget scenario.

And in the Washington, DC model, they play the Washington Monument game. Well, if you cut the Department of Interior, I'm going to shut down the Lincoln Memorial, right? Like, I'm just going to find the most painful cuts that everyone is going to object to. But what I want to say is that is not the game that we are playing here. We are playing it straight.

Like, there is not a simpler cut to find that is more painless than this kind of thing that we are putting on the board. Or if we have missed it, we're inviting someone to let us know what it is. So that is the, the play the cards face up, tell the truth and boldly game that we're playing right now.

Okay, let's move on. The next is the library. Closing the Muldeen Library and reducing Sunday hours would get us $700,000 of a reduction. And in the Health Department, reducing the Senior Center funding for Anchorage and Chugiak State Park, as well as one of the Brother Francis Shelter funding line items within the operating budget, would give us a $300,000 cut. And, and there, you know, are other items that are funded in the Health Department budget, but the question becomes, are are those part of what the community considers core services?

Are they a service that is provided based on a legal requirement? Are they a service that is provided to the majority of the community as opposed to a specific subset? All of those are factors that we take into consideration and while we are talking through these choices. You'll see that most of these choices were not ones that were interesting to us for this year's budget, which is why the one-time funding was used.

Yeah, Miss Baldwin Day. Yeah, I really appreciate that, that, you know, some, some of these— I think it's important to keep in mind that some of these proposed cuts and programmatic changes really do impact particular neighborhoods and particular communities more than others. Elders. And I'm looking particularly at the public transportation. Route 51 connects Centennial Village with the Muldoon Transit Center, and it goes by several senior living facilities on its way.

And so that is a way that, like, a very specific— that our elders are getting where they need to go in Anchorage, and discontinuing that route entirely would be a massive impact to a very specific neighborhood and very a specific population of individuals in Anchorage. And Route 65 connects downtown with Spenard and Sand Lake and the airport, and it's the only bus service in southwest Anchorage. And so that is—. I mean, those are not insignificant. I mean, it's 1.8 million, and I think there's a calculus to be done there about what does that mean in terms of economic value?

What does it mean in terms of social value, especially for like elders and folks who are living on the South Side. So these are not— these cuts are not universally felt, and I think that that is also something we have to grapple with. Thank you. Okay, I think we can continue. And to Mr. Falsey's point about, you know, showing the cards face up and whether or not is a 5% cut in this department versus that department the right thing to do, the reason we we asked the departments to follow through on this exercise is because, again, in sort of municipal behavior over the last 10, 15 years, there is a general sort of avoidance of our very large departments.

We don't talk about cutting police, fire, and maintenance and operations necessarily because they are core services and they are so important to the community. And there are both real and you know, emotional ramifications about what we do with those things. But there is also a sort of lived experience within municipal departments that when we have to start talking about cut scenarios, they know that usually the municipality and the administration only look at not those very large departments. And the dollar amounts we're talking about, $15 to $30 million, we cannot realize through our smaller departments. They are— they take up so little of our annual funding that reducing $15 to $30 million out of them would take multiple internal service departments out of operations, if not, frankly, almost all of them except IT and, you know, Muni Attorney, etc.

But, but, but that is the challenge here, and Requesting that our very large departments contemplate this was something that we needed to be able to see as well. You need to tell us, go through the exercise all the way to the end so that if we had to make these cuts, we can communicate it to the community, regardless of whether or not we want to make the cuts. Because if they have to come across, we have to do the work in advance to say, this is going to be the result of these cuts, everyone, please expect that the mobile intervention team is not going to be able to respond. And we don't have the coverage of, you know, this period of time anymore. So, so it is important for us to be able to see the impacts within all of our municipal departments, knowing that others will ask those questions too, and what that could mean in the trade-offs.

Any other questions? Ms. Scout. Thanks, and apologies if this was asked while I stepped out. So were these potential cuts, were these provided by the departments themselves?

Okay. Through the chair, yes. Thank you.

Okay, okay. On the point of public safety, I think we can move on to Safe Anchorage. All right, let the parade begin. I think if we can take a short moment, we'll let all of our departmental directors come on up and we'll start with the Anchorage Health Department. Do we have Director Rasch here?

Thank you. Okay, yeah, I'll note that we can get a couple more microphones. Maybe I can ask staff to help. I think we could probably poach one of the ones from the attorneys if they aren't here. I know Mr. Bolland is traveling, so he'll be on the phone later.

So also the seat is open if anybody wants to sit next to me. Just know, but I want to make sure everybody has an opportunity to speak. And then as folks come up, we can invite if it makes sense to have more than one person up at the table, we can do that or just rotate out. And then I will also note safe Anchorage with an F is not the same as safe Anchorage with a V.

And so just to preview this, we'll go through the Health Department budget. The alcohol tax fund is included in the slide deck, but I believe that Thea will walk us through the safe Anchorage budget, which, as I mentioned, is multiple funding sources. And then the Fire Department and Police Department So we can start with the Health Department. I apologize, on the screen it's very small, but on the slides it looks very good. So pick up a copy in front of you if you are in the room.

The proposed operating budget for 2027 for the Health Department, you can see on this page the 2025 actuals that then show the 2026 revised budget. And the 2027 proposed budget so you can see the comparison in the year-over-year change. The divisions within the Health Department are listed: Administration, Clinics, Director, Housing and Homelessness, Human Services, and Public Health. When you are looking at this specific department summary, the way to read it is go through the divisions at the top in that first section. The intergovernmental charges are then added added or reduced from the direct cost total of the divisions above.

And then program-generated revenue— this is a fun one for Member Baldwin Day because this will show up on IT's page in a real weird way— but the program-generated revenue is the money that the department produces through any of their operations. And so it shows up on this page as a because this is a direct cost total page. So we are trying to show you how much it costs to run this department, and the direct cost taxes versus the function cost versus the program-generated revenue gives you the net cost total of $25.1 million.

And that's specifically about the program-generated revenue because, like, as I said, it gets confusing in some of the other And then broken down in direct costs by category with salaries and benefits, debt service, et cetera, et cetera. So you'll see that a lot of those different direct costs, those categories under direct costs are not— they do not have any funding in them in many departments because many departments don't have debt service or they don't have any travel budget or they have no equipment and furnishings budget. It. So as we go through, you'll see those blanks in that space.

Overall, 54 total positions in the 2027 proposed, and I believe Director Rasch has a lot of nuanced tiny adjustments that we'll go through on the next page. Any questions on the department summary?

I do have one question before we move on because I think it's going to be in the other departments. Can you speak briefly to— I see there's HD administration, so Health Department Administration, and then director is a separate line. My layperson thought would be, oh, well, of course that would be in the administration of that department. And then can you also speak to, I imagine director is not just the one individual position, but maybe just unpack that because I'm imagining it's in other departments as well. To the Chair, I'll be frank.

I had this exact same question when I was going through all of this, not because I think that there is anything inappropriate about it, but because I'm curious as to why there is a difference between multiple departments. Some departments have administration and the director is rolled into it. Some departments do not have the director rolled into the administration line. Some director lines are one, some might be two. Some administration lines may be the director plus an assistant plus the entire administrative staff and the contractual obligations therein.

So, so it depends by the department, and you have to pay attention. But the reason I was curious about why that is, is to figure out how how we can streamline it or make it obvious what that includes in the differences. Okay, thank you. Other questions? Miss Baldwin Day and then Mr. Hamblin.

Yeah, thank you. So curious what happened with, in the debt service world, moving from $40,000 in our 2025 actuals unaudited to 2027 proposed just under $2,000.

Through the chair to Member Baldwin Day, let me get into the details in the big book. Uh, what page are you looking at again, Timmy? Oh, it's slide—. On slide 13 toward the bottom, I think, but also reflected in the big book on HD5. I'll say this as a general matter Director, this is probably not a simple question for the directors to handle because this is all handled by public finance.

My suspicion is that something that we bonded for in the area-wide facilities bond rolled off between '25 and 2026. So if we replaced a boiler in the health department with a 20-year bond in 2005, that would have reduced debt service in 2026, but we'd have to chase whatever that is. OK, and to Member Baldingray, the other reality is that one is an actual and one is a budget. And so the $40,000 was what was actually charged. The budget is $3,000 because that is ideally what the norm is.

When we do our budgeting, we look either at the last 3 or last 5 years, or based on the schedules that are given to us by Public Finance. So the budgets are set. What happens in the ensuing year is what happens in Public Finance land, and as long as we can make it work, then it may change the budgeted amount. So it sounds like that's a public finance question for me to chase down separately. The other question that— and I, I was trying to sort out it with the, the position summary.

It, it seems like the actual function— I'm trying— I was trying to like draw myself a little map of how positions were moved into different departments and positions collapsed together to fund something else. I'm wondering, in terms of like actual human beings that are not funded at this point, not just what isn't funded by the Health Department, but like positions that actually evaporated, how many is that versus the number of positions that just now exist in a different place, but that work is still being done? Done. Through the Chair to Member Baldwin Day, we can move on to the next slide, which is this, the breakdown of the revised, the 2026 revised budget. So this is the reconciliation page.

So in our budget book, we have the department summary, which is the page we were just on, and this shows you the full activity of the department. And then there's the reconciliation page, and the reconciliation page is the page that illustrates illustrates the changes between last budget and this budget. So the reconciliation page specifically includes the detail on all of these adjustments to get us between 2026 revised at a direct cost of $21.7 million into 2027 proposed at a direct cost of $23.3 million. The changes, as Member Baldwin Day is talking about, are partially these position adjustments that Director Rash can go through specifically about how the Health Department has reorged, and the change in GO bonds of a $2,000 reduction as well as a $1.4 million increase, or inclusion, I should say, because it is not an increase, of Assembly-approved shelter surge and night-only shelter. I say inclusion because this is funding that was moved from, or this is, I should say, a cost that was moved from the alcohol tax into general government in order to continue providing providing the service.

So Director Rasch, if you want to answer—. Before she jumps in, if your question was globally, all in, how many fewer human beings we have across the entire municipality, was that the question? Oh, no, no, no, it's just for health, because what I think I read was that 2 positions were transferred, 2 were eliminated, and 2 were sort of like aggregated together. And so in my read, that's actually not like a net total loss of 6 individuals. That's 2 positions that actually went away and other— and then there were 4 that sort of matriculated elsewhere, I think.

Through the chair to Member Baldwin Day, the position count is not an FTE.

So you can have a position that is 0.25.

Yes, yes. And that's Director Rash will go through because that's exactly how this works out. Thank you. Kimberly Rash, Anchorage Health Department. So from '26 now to '27, we've done a lot of work within our clinical services division to right-size as much as we can.

Within clinical services, we've seen also a reduction in our grants. So trying to make sure that on the operating side, we still have enough staff to do the work. And so the first position that you see there, there was a longstanding position within our operating budget for a legal secretary under ADBSAIP. And that position has now— and it was, it was with us and now it has moved on to the legal department because that's where it belongs. It didn't belong really with us, but it's been there for quite a while.

The reduction of the one full-time senior family service aide and the reduction of the senior office associate position were reduced because those positions were vacant for some time and the need for a medical officer position outweighed the need for those two positions. And then the transfer of the full-time principal administrative officer position to grants. As we, as you all know, our our funding cycle for the grants runs from July 1st to June 30th of every year. And so depending on the funding that we get from the state also depends on the splits that we do with our operating budget. So if we have to make a change with our grant, then we have to make a change with our operating budget.

And so the rest of the items that you see, Principal Administrative Officer, a Senior Office Aid, the Office Associate, and the senior staff accountant were either in a State of Alaska grant, and it was due to that change, or a change to HUD. So that senior staff accountant, we changed that due to our HUD funding.

Any other question? Okay, and then Mr. Handeland, you would send the cue. Yes, so looking at the kind of the detail here in the administration budget budget there, what's kind of covered under the contractual/other services in that?

Are you talking about the 4.237?

Yep. So within the administration budget, we have our animal care and control shelter contract, and then There's probably one other contract that we have that I can't think of offhand, because the one contract that I just mentioned does not equal $4.237 million. So I'm assuming it's just two contracts that run out of that division.

Okay. Any other questions? Okay, then we can continue.

Then we move into the alcohol tax, and this is a page you are all familiar with. This is the general breakdown of the alcohol tax in a year-over-year basis. I apologize for the tiny screen, but the next few pages that we are going to go through will give you a much better visibility into what the actual funding is. So I will—. And real quick, I will just note, it is in my personal favorite appendix, which is Appendix R of the budget, which is where it lives every year.

So anybody who is looking at the budget book, you can download the entire book or you can download it online just as individuals. If you want that piece of paper, it's Appendix R. And also on the slide.

Hi, good afternoon. Thea Agnew-Bemben with the Mayor's Office. So this is a presentation that we did this time last year, and before I start, I just want to be clear that the numbers that you're seeing here are reflected elsewhere in the budget. So this is not new money or money that's in addition to what you're seeing elsewhere. It's really to try and give you a picture across across this pretty important strategy that we have been implementing, what that strategy costs.

So just want to be clear with that at the beginning, 'cause I think there's often the question of like, how much are we spending on homelessness and how much are we doing on this? And this is an attempt to answer that question, but I just want you to be clear that it's not new money. This money sits in all these different departments and programs. Yeah, great. Great.

So we're not going to go into a ton of detail like Chair Brawley requested and kind of all these different programs and efforts. And as you know, we report to you on that pretty frequently through the committees. But just as a kind of refresher, when the mayor came into office, we really implemented two strategies that dovetail together. One we call the homelessness and health strategy. The other one we've called Safe Anchorage.

We've now kind of like merged all of that and how we talk about it. But when you look at this slide, the overall goal, of course, is that we have a safe community for everyone who lives, works, and visits here. And then underneath that are some of our most important objectives. So a huge one is fewer people sleeping outside. We want a year-round safety net system.

Part of that is really integrating and bulking up our crisis response and crisis care. We want to have more housing so that we're moving people through a system into stable housing and supports that help that person remain housed. Of course, having a really robust public safety workforce is an important piece of that. And when I say that, I don't just mean at APD. I'm also thinking about the health department, and the fire department, as well as Parks and Rec, the libraries.

I mean, a lot of different departments really contribute to the work we're doing here. We're trying, trying to reduce crime, and part of that is increasing accountability. I know we've talked a lot about increasing prosecution and making sure that it isn't just a revolving door. And overall, we want to have our roads, parks, trails, our public spaces safe for everyone. And to do that, we really have built a lot of partnerships, not just within the municipality between our departments, but also with community organizations.

We're really trying to leverage funding from other sources, and then really track our, our work through data and be able to share that back with you. So that's kind of the overview of the strategies.

So this is, this is that Safe Anchorage budget. So you'll see the columns columns. I've tried to break out for you our general government, our alcohol tax, and then in the other column I've made a note in the column just to the right of that of what the source of those other funds is. And then if you look at the sections horizontally, the first big bucket is outreach and crisis response. That's what we do to really get out into the community meet people's needs where they are so that we're not having to use other types of resources to address those needs.

The second bucket is both preventing homelessness from occurring and also diverting people out of that system as quickly as we possibly can. And that would mean, you know, helping somebody get home fit— home to family, helping somebody get into assisted living so that they never come into our shelter. For those are two examples. As well as other broader prevention efforts. So there's a lot of primary prevention that is also funded through this, where, you know, we're doing work in the community to prevent some of the root causes of both crisis and homelessness.

The third bucket is really our low-barrier emergency shelter, and I think you've seen as we've presented how we think of the system. Some of those shelter beds are ones that we we pretty directly operate, so we're doing that through our contractors. Those are what we think of as kind of our year-round beds. So that's at the Alex Hotel at East 56th and at Linda's Place. And then there's also a group that we call municipally funded low-barrier shelters.

So those are ones that you've seen kind of year to year on alcohol tax and other funding like Brother Francis Covenant House, Ona Brause. Those are some of our really kind of core partners as we try and do that low-barrier emergency shelter. And then the next bucket is more housing. So that's a lot of the work that the Health Department does. And of course, this changes year to year as they get public input, develop an action plan.

That action plan goes to the public, it comes to you, and then it gets implemented. And then, as you know, sometimes we're using funds from previous years in the activities that we're doing. So you're seeing that action plan year to year, but those funds are sometimes taking longer than that to expend. So there's more than one year's worth of actions included there. So some of that is developing low-income housing.

We're starting a voucher program with HFC, which we reported on Wednesday to the committee. That should be starting hopefully in the next couple months. We've got our housing redevelopment program, which you approved a few months ago, and we're still kind of figuring out how to roll that out, and then a new one that's from this year, mobile home relocation assistance, so that we haven't had previously. And then in that very final bucket, this is our data. So we do provide some support for the HMIS data system, and then we also have some program operations in there for our different departments.

And in that one, it's particularly pertinent to the alcohol tax. So just to kind of give you in big terms, general government, we've got about $10.4 million in there this year. That is an increase from last year, and that the increase is pretty much entirely due to the amount that we put towards shelter surge so that we have the funding for that for at least the first part of next year. In alcohol tax, our alcohol tax funding is slightly down from last year. I like to remind people that that's because the alcohol tax is doing its job, which is trying to get people to drink less.

But the downside of that for us is that we have less revenue to spend on the those, those, those uses. And then in the other column, we're, we're up this year from last, which is great. And that's where we're really integrating our opioid settlement funds into this work, really strategically using the different federal entitlement funds that we have. And then we also secured just over $3 million in Rural Health Transformation Program funding for the— that will go from now through June of 2027, and then we'll be applying for our year 2 in spring. So there actually hopefully will be more than that for 2027, and that's a collaborative project that we're implementing that brings together Health Department, Police Department, Fire Department, IT.

Okay, before we move on, I'll see if there's questions. I have a couple, but maybe other members do as well. Miss Paul, Erin Baldwin Day. Oh, and sorry, before I do that, I forgot to say earlier, Mr. Vohlen joined us on the phone at 12:01. Thanks.

Thank you. So I'm, I'm curious what, what the distinction is or what the difference is between those first two lines under outreach and crisis response, the HOPE and MDOT and Third Ave/NAV sort of all bucketed together, and then program operations. Can you talk a little bit about the difference between those things? I can answer the first one, then I might need Ms. Brawse or someone from APD to talk about the second one. So that funding there is not specifically to fund the HOPE team.

It's to fund the— it actually goes, all of that $500 goes straight to Catholic Social Services for Third Avenue Resource and Navigation Center. But the purpose of it is really to help support the work of the multidisciplinary outreach team. So the HOPE team last year brought together all of our community partners that do outreach, and we now have a 9:00 AM meeting every day. And it's actually gone well because now the HOPE team is not the one facilitating that meeting every day. We've actually kind of moved that off onto the health department and the coalition help bring that group together, but they are able to participate.

And that's where we bring all of our reports together from the day and decide who's going where. And follow up on folks that we're already working in. So that funding is really to help Third Avenue Resource and Navigation Center be the resource that we need it to be to provide that support to the outreach teams. So does that fund human beings? I mean, what— half a million is a good chunk.

I mean, it's not nothing. So what is that funding functionally doing at Third Ave Now? It's really helping support Third Avenue Resource and Navigation Center as a place to be, walk-in site for people to get assistance and for our outreach teams to bring people to. So they provide showers, they provide coffee, they provide all sorts of support. So it's helping support their operations and their staffing.

Okay, so, so this is both operations and staffing support for Third Ave Now? Yeah. What proportion of their, like, overall budget does this represent? It's about half. Okay.

Yeah. Got it. Yeah. And then I would love to hear about APD program operations. Okay.

Okay. And I see we have our person from APD coming up.

Uh, yes, uh, Member Baldwin Day, through the chair, it is— those were full-time positions, so those are dispatchers and intel analysts that make up that money that for when the alcohol tax first came around, and they have stayed there this entire time.

And do you happen to know how many humans that is?

Uh, not off the top of my head. I believe it 5 positions. I thought it was 3 dispatchers and 2 intel analysts, but I would have to go check that.

Thank you. To the, to the chair, to member Baldwin Day, we can get that detail for you. It's, it's available in the book, but it's— we'll get the answer for you along with all of the other answers to the questions that have been asked and not answered in the room.

Okay, next I have Mr. Kerker in the queue. Thank you, appreciate it. One of the things I get asked by constituents a lot is how much are we spending on homelessness and homelessness response, and the answers in the past have been difficult to nail down due to coding within SAP. But is this a fair— like, can I reliably go back to my constituents and say this is it, there's no more money anywhere else that we're spending on— like, this is is at $31-some million. Yeah, I mean, I get asked that— oh, sorry, through the chair, Member Gerker.

Um, I get asked that question a lot too. Um, and actually, probably like 2 and a bit years ago, um, Marilyn, I think, at OMB did a really good— uh, she put this giant thing together, and I've been using that ever since. Um, and what I've been able to track is that really, when the mayor came in, we haven't increased our— this, this actually this, this $1 million extra that we've got in here for surge, that, and Ona can correct me, but that's the first time we've increased our funding for these from GG or alcohol tax since the mayor came into office. So the last, actually last year was a slight reduction from '24, and then now we've gone up a little bit with this. But this is the way I answer that question, because when people say homelessness, what they're really talking about is kind point out all the stuff that they're observing, and that's like the word they use.

So some of it's going to like shelter that's specifically around homelessness, but a lot of what we include in here is the other services that we provide, which you know what those are. Yeah. And, and I guess maybe just to drill it down just a little bit further, you know, when people ask, they, they care because it's their, their tax dollars, right? Uh, so, but really, it's really only about $24 million of out of the alcohol tax, and GG, that is actually from the taxpayers. The rest of it comes through outside grants and sources, correct?

Is that a fair—. Okay, okay, thanks. Yes, thanks. And a follow-on to that, a couple comments and a couple questions. One is, this is one of the areas that I have worked on for probably, what, 6 years now.

And so if anybody does have questions about kind of what's been in here before and you would like to know, especially if it goes back before your guys' tenure. Happy to talk offline and keeping out of current things. But specifically, I want to be clear too, I think, because I do have a couple questions, but just to be clear, for example, finance program operations, Narcan vending machines, child abuse, and/or the DvSA core services, $675,000. A number of those are not just homelessness. So I think it's important to say so.

So the number is not actually as high as this. Some people who are living outside or don't have a house to live in may be going to Victims for Justice, they may be going to Awake, they may be going to these other ones, but there is a Venn diagram of homelessness services and what alcohol tax is paying for, and that's been in there pretty much since the beginning. Was the Muni Attorney Program Operations, I believe that is for an attorney who is specifically focused on domestic violence response, that's been in the alcohol tax Alcohol Tax, I think since the beginning, and is not a homeless service, right? Same with even Mobile Crisis Team. We know what, 99% of folks, or whatever the number is, are housed.

And so I think, again, there's a Venn diagram. So it's actually not really even true to say that the $500,000 of administering the Alcohol Tax in the Finance Department is a homelessness service. So I think it is a good picture of what we're doing and where it fits in the Alcohol Tax, but I think, just to be clear, I think it's not, we should not count every number of this homeless response. So I think just to unpack that. And if I could just respond briefly, Chair, that's exactly right.

And I think that's why, that's why, that's why we call it the Safe Anchorage Budget. And that's why I, when people ask me that question, I try to say, do you mean just on shelter or all these other things? Because in order for the system to work well, we have to both address, you know, people who are still housed and in crisis who then may become homeless. That, that happens. People who are unhoused, people who are in shelter.

Like, it's, it's a, it's an effort to try and address people who are in very various types of precarious situations and try to make that more stable and less of an impact on them and on the whole community. So that's why we kind of think of it as one big strategy.

Thanks. And I have a couple follow-up questions. And Ms. Park, then Ms. Baldwin Day. More specifically, is the funding in the current budget for 2020 $1.6 million alcohol tax or otherwise, and what is proposed, does that right now or in the future include funding for the Home for Good program? Are we still providing funding to that program?

No. The municipality had in the budget last year, their— let me just get this right. The amount that had already been committed to them lasted through September of this year. And so when we met with them kind of probably this time last year, and, you know, our decision was it wasn't necessary to add MUNI money because they technically still had our money through, through September of this year, and that they should go out and find some other funds and then come back to us and say, do you need funding for next year? We haven't really had that conversation directly, at least I haven't, and I don't think Kim has.

Yeah, we've met with them, but we haven't kind of had had that ask. So yeah, and, and they're— they have not like ended— it's not that they ended anyone's housing, they simply stopped taking new participants until they have more funding. So because they're on vouchers and have other supports, I imagine that will come up in the near future. My other question is, um, just hypothetically, very high level, let's say we zeroed out the GG, uh, shelter line. I'm not advocating for that, can you speak, and I'm looking specifically at APD, you know, what cost increases or what operational impacts would we have if we stopped providing shelter?

Because I think understanding kind of the impact, and again, I'm not proposing doing that, I think it's important to understand how, what ripple effects would that have in our system.

I'm not sure I could quantify that. I'm not looking for numbers, I'm looking more for kind of how that would impact operations. Operations. Oh, the calls for service would exponentially increase.

To the Chair, I will say that the alcohol tax in its origin in the municipal administration in 2018 was because of the statewide budget cuts and the impacts to municipal operations. The activity that happened once our social service net was reduced at the state level on our local responders was an order of magnitude, if I recall correctly from the work session that we had to call on an emergency basis for the Assembly to appropriate funding for Brother Francis Shelter after the state had reduced its budget, was I think $400,000 a week. And that was just in 2018 or 2019, I can't remember, forgive me. 2019. But the alcohol tax was in contemplation and conceived within the municipality before those budget cuts occurred because we were aware of the already large impact that those reductions were having on our service system.

So the municipality thought, okay, well, we need to find a way to resolve this. We need an option. Where does the funding come from? How do we do this in order to support municipal operations, including the police department, the fire department, the health department, because we were seeing such a rise in demand? And what happened between the original conversation around the alcohol tax and the assembly and administration discussing the need for new revenue is those state cuts became real, and then all of our service providers lost their funding to operate.

So originally, the alcohol tax was conceived as a revenue stream to support municipal operations and the demand on public safety. But because of the statewide cuts, we ended up having to fund providers because their revenue had been cut at the state level. And then the funding for municipal operations was essentially displaced and put on hold, which is why you see the positions in the budget for APD and the Health Department and Municipal Attorney. Those were there in the first year because the intent was to fund the demand on municipal operations that we were not able to fulfill under the funding available at the time. So I believe Chief Wilson has information on those positions that you had asked about in the police department specifically.

But, but that is the evolution of the alcohol tax. It was originally conceived because the muni needed the revenue to support the demand. The state made a choice and cut the revenue that supported all of the operations within Anchorage that then created an even larger demand, and the funding became a backfill for that loss of state revenue. And that's why you see so many of our provider contracts in the alcohol tax. Thanks.

I would just add to that, not to go down this road too much, but that is one part of the story. I think there is another part of the story external to the municipality of the number of organizations that really advocated for it. And had—. I guess there's a whole ongoing conversation about what is the best use of those funds. So I will leave it there.

So next I have Ms. Park and then Ms. Baldwin Day. Yeah, I just wanted to highlight when we look at this as being the homeless or unhoused most budget, and it includes these substance use disorder services, that they are not necessarily one and the same. And I know that this came up in a meeting that I had with Thea earlier in the week, and that I believe that Chief Schraggy has testified that most of the drug calls for overdose that they have had are in homes where people people have gone down at home. So they're, you know, they shouldn't be lumped together, so to speak, as being the same thing. Yeah, through the chair, just to say it even again, the work that we're doing in the community is for— it's a whole strategy around safety, addressing a lot of different behaviors and issues.

Issues, some of which revolve around people being unhoused, or there might be a lack of housing associated with the issue, but it's, it's a whole package. So, and, and the success we've had in reducing unhoused homelessness is due in part to these other pieces. So connecting people with treatment, connecting people with housing, helping people get home, you know, etc. So I I don't talk about the work that we're doing as like specifically around homelessness. I talk about the whole package because I think that's what it takes to have a safe community.

And I appreciate that. Thank you. Thanks. Next, Ms. Baldwin Day, then Mr. Handeland. Thank you.

I believe a few months back at a I think it was Housing and Homelessness Committee meeting. Ms. Agnew-Bemben, you had a slide that showed what is the ideal additional funding that we would need to be able to really adequately offer year-round shelter services. And I believe that number was like $2.1 million, something in that neighborhood. So is that $2.1 million over and above what we are seeing here on this summary sheet.

Not— sorry, through the Chair, Member Baldwin Day. Thanks for remembering that, and what we have funded here is some of those additional shelter beds. So what you're seeing in that increase in the GG line and what you saw in the Health Department overview, that's to get those additional 150 shelter beds operational through at least the first part of next year. I've started to just simplify that to say, so if you look at what happened in 2026, we had our full surge for the first half of the year, like up to like April, May, then we reduced back to our 300, what we call year-round beds, and now we've started adding surge again, right? And we're gonna get up to 450 by the end of November.

What we saw during the summer is we had very little movement in our shelter, so there was not a lot of in and out. People were hanging on to their beds. And then if you are a Midtown business owner or a downtown business owner, you saw a lot of people outside, which we don't want that. We don't want people sleeping outside. It's terrible for them, terrible for everybody.

So my working theory now is if we actually could keep— if we didn't do the seasonal up and down, which we all know leads to camping and all the things we don't want, and just could have that amount of beds, you know, year-round, that would be awesome. And that's something I think we'll be trying to figure out if we can find some other funding to make that happen, maybe through non-municipal sources would be ideal. But I do think that that then gives us enough kind of elasticity in the system so that we can get people in and out, you know, get people in within a few days because because there's quite a bit of churn in shelter. It's not that people are, you know, and that's what we want. We want people moving out of it so other people can come in.

So that's kind of my working theory right now is if we could keep those beds year-round, we'd have a much more stable system. Yeah. So is that, is that additional stability in the system? I think you said this, this budget here represents about a million-dollar increase for the surge beds. Is that roughly?

It doesn't have to be super exact. 1.4 Million. Sorry. 1.4 Million. Yes.

Okay. And so for the system to really have that year-round stability, what is that price tag and do we know? Yeah, we totally know. I don't have it right at my fingertips, but it's pretty easy math. So it's 150 beds year-round.

And so I can get it to you. Okay. I would love to know what that looks like because I think I think, I mean, you mentioned Midtown and sort of the summer experience. I mean, that's something that I know my constituents certainly are really interested in understanding, like, what would it take for us to not have that sort of summer decompression happen? And obviously, like, world's better than where we were when we were just shutting down shelter entirely, but being able to sort of absorb that summer cost, I think, would be— I just love to know what that looks like.

Thank you.

Yep. Okay, I think that's our questions for now. I also know it was 12:30. On our sheet, we have— we actually have a missing hour because it says 11 to 12:30, and then it says lunch break 1:30 to 2. So we have more hours than we thought.

Yeah, so I'm going to suggest, because I know we have the other departments to go through, I'm going to suggest we go till 1, and then we'll take take our break at that time and try to get as far as we can through the different departments. Mr. Handeland. Yeah, so for, I mean, the low barrier emergency shelter, that's the largest one on here, I guess for that capacity that we're paying for now, roughly $20 million. What is, I guess, the number of individuals and stuff that is covered?

So I, so again, there's two lines there. The one that says MOA that's the ones we're operating directly through our contractors. So that's East 56, Linda's Place, and the Alex. We have 300 beds between those 3 locations year-round, and then we do a seasonal surge. So right now we're adding beds to get up to 450 total beds that we operate.

Then in the line below that, that's the ones that we fund. So those are more like grants that go to say Brother Francis, Covenant House, other locations that we also coordinate with. With. And then the exact answer to your question in terms of number of beds is on the diagram. It's on the backside.

So I will get that to you before we end today. So that would be the addition of the 450 beds at our full surge, 300 year-round. That's what we operate. And then all the community beds. Yeah.

Okay. I think we can go on to the next slide. Great. This is my last one and it's is not anything new. So just wanted to be clear that one of our main strategies is to just really try and increase funding from non-municipal sources.

And we have increased our ratio a tiny bit from last year. Last year it was 80/20, now it's 78% uni, 22% other sources. So again, just being strategic with our opioid settlement funds, getting rural health transformation funding, which hopefully will be a 3-year project, being strategic with our HUD funding, And then the Good Neighbor Fund, which is a, it's a totally community fund. It's not something that we control in any way, but the, the cool part of it is, is they allow our HOPE team to disperse some of those funds as they're doing their work. So that fund launched last October.

We have over 300 donors now, and we've raised almost $260,000, which is awesome. And if you feel like being generous, please do, because this is a time of year where we really need the those funds.

Okay, I think we are good for now. Can I add one additional thing to that, Member Handeland? So that $4 million is a couple of contracts. It's Animal Care and Control, it is our SART contract with Providence, so that's our sexual assault response team, and then 3 small grants to BFJ, Awake, and Star. Star.

So those make up the $4 million in operating.

Okay, we move on to the fire department. Let's ask Chief Schrage to come on up. Thank you, Chief Wilson. Director Really rough a lot. I know, it's tough.

I'm gonna go hard on the fire department.

Okay, and then I'll just note, so we'll go through fire department and then we have police department. So that's kind of the bucket of these topics.

Okay, so moving on to the fire department. The fire department summary shows again again, the '25 actuals into the '26 revised budget and the '27 proposed budget and the corresponding changes. The fire department is broken down into similar divisions of administration, emergency operations, Office of the Fire Chief, police and fire retirement, and wildfire. That wildfire division is part of the evidence that shows up from Member Johnson's original amendment, I believe, to incorporate the wildfire division into the operating budget. Previous to the 2026 revised process, wildfire was living as a grant, and it has been pulled into the operating budget.

So it is still currently at least partially or fully funded by grants at this point, but it It is, yeah, but it is represented in our budget, and we will endeavor to continue grant funding. But wildfire response is a very important thing in this community, so making sure that it is included in the operating budget was part of Mayor LaFrance's priority as well as some of the assembly members. So that is a very visual change in the fire department. We have their charges to other departments. At $14.8 million, their program-generated revenue at $31.9 million, and the direct cost by category broken down into salaries and benefits at $102 million for a total position count of 416.

Any questions on the summary page?

Also, I should introduce Chief Schrage. Yeah, I think before we go to questions, I'll see if the chief has any additional comments or overview you'd like to give. Thank you, Chair Burley. I'll take them as they come. Okay, questions?

Okay, Miss Baldwin Day. Thank you. So of these 416 full-time positions, how many of those are actually staffed and how many are vacant?

Member Baldwin Day, through the chair, we are nearly fully staffed all the time. We have a small number of vacant positions just as the result of normal turnover. We are currently conducting the second fire academy of 2026. Right now we're about midway through. By the time that that academy graduates this December, it will erase practically all of our vacant positions.

Vacancies. Do you have an idea of how many vacancies might remain at that point? I know that's a moving target with like retirements and voluntary separations and things of that nature, but do you have an idea of how many will be sort of left over waiting to be filled? It's, I would say, around a dozen, but I don't know the exact number.

And then where will, um, and then we'll have another academy that's actually beginning early 2027, correct? We will start another academy in 2027 because we are expecting a large, uh, tranche of firefighters to retire at the end of April, which is when people normally retire. And, uh, I think there's a very large number of people that are eligible to retire. The 2027 academy will be designed to cover those vacancies before the summer overtime season. And then I think my last question, do we have any additional data as far as like voluntary separations in this year, fiscal year '26, and how many of those might have been attributable to the fact that we don't actually have a defined benefit?

Program here in Anchorage, Alaska, let's be clear.

Member Baldwin Day, through the chair, we've had 31 people leave the department this year. Not all of those are voluntary.

I could, I could count them up, but I would say the number is probably around 2 dozen dozen that have voluntarily separated. Most of them are retirements. Uh, we have 7 of those were pre-retirement voluntary separations. So in other words, of the 31 people that have left the department so far this year, 7 of them did not reach retirement age and volunteered and separated voluntarily. We only have anecdotal data to support the reasoning behind that, whether it was attributable to the lack of a defined benefit, but it is a common thing that we hear from those in our exit interviews.

Thank you. Yeah, asking these questions just— and because I think, I think my colleagues are already aware, but it bears repeating about this time every year that, you know, we really are in a fairly precarious position when it comes to AFD staffing, especially based on the retirement. I hate to use the word cliff because I feel like that's getting a little cliché at the moment, but we really do have a lot of folks who are set to retire in the coming year, and that is, that is going to create some additional complexities for you all. So I just wanted to make sure that we had those numbers out on the record. Thank you.

Okay, next, Mr. Johnson. Yeah, kind of following Member Baldwin Day's line of reasoning, you mentioned a large, unusually large number of retirements expected next year. Can you kind of give us a sense of how many you're anticipating in '27 compared to a normal year, so to speak? I can give you a rough number. I don't know the precise number, but I think we have around 50 people that are eligible to retire.

They're of retirement age or not necessarily retirement age. They're of that— they've accrued enough years in the PERS system to retire. And some of these we expected to retire this year, and a few of them we expected to retire last year. And we're trying to understand why they didn't, and we We think people are waiting for the economy to change. I think some— a large number of people were waiting for this year's collective bargaining agreement to take effect so that they could retire at a higher pay rate.

We think that this next year is the year. Okay, thanks. And I also kind of noticed that that will be 20 years since we changed our retirement system. And I can't help but wonder if these two things are related. I might add that a conversation we have going forward— through the chair, by the way, I'm sorry— is what does retirement look like for a Tier 4 retiree?

Do they work 12 years and decide to go do something else? And do we consider that a full career?

I don't know. So it'll be harder to predict. Right now it's fairly predictable. When people reach 25 years, they leave for the most part. Yeah.

Thank you. Okay. I have one question, and it's not just about this department, but I'm thinking about administration and just the fact that I know the fire department and other departments are really good about going after grants. You know, a lot of times, one-time— we see them come through our agendas all the time. I know last year there was a big discussion about basically how do we maximize grants, and I know Miss Thea Agnew-Bemben also spoke to that earlier, kind of finding outside funding.

So I'm curious, does the fire department have a dedicated grant person, or kind of how do you pursue grants? Obviously you're administering grants that you've gotten, and I know there's been a discussion about do we need a position for grant funding that sits across departments? And also, this is a question for Mr. Falsey, I think, just I wanted to kind of resurface that conversation. And it may not be specific to this, but if there is a tieback, please let me know.

Well, I can take a bit of a crack at that. We did create the Office of Grant Development in 2025, I want to say, and Michelle Nelson is now the incumbent Grant Development Director, and she's been doing a great job. I don't know that she has found new FIRE grants, but she has been helpful as they have been applying for, I know, wildfire mitigation grants, which also involve masticating forests, which I found to be delightful. I don't know if there's other commentary you want to provide there. Thank you, Chair Brawley.

Through the—. To the chair, we, we do not have a dedicated grant writer. We have not requested one. We have found some success in We've found considerable success in just writing grants.

Most of the grants that we're receiving now have been written by a grant or a contracted employee, not an employee in the municipality, somebody that we have working for us on a grant. We have utilized heavily Michelle Nelson's services. She's been very helpful in reviewing and marshaling forward our grant applications. Okay, thanks. Yeah, and just to be clear, I'm not suggesting.

Saying an alternative to that. I think however we are filling that function and however it works for different departments is great. So I'm just, I'm glad to hear that update and that we are using our resources to go after those funds that are available because I know that if we don't, then they don't come to us automatically. So, okay. And then next, Ms. Baldwin Day with a question.

Yeah, thank you. Just following along with the conversation about the 50 potential retirees in FY27. Does that mean we will see 2 academies in 2027 as well? Member Baldwin Day, through the Chair, I fully expect to do 2 academies in 2027. And is there any universe in which that would be insufficient to staff based on the number of separations we expect?

It's conceivable and not unrealistic. Have we ever done 3 academies in a year?

Not to my knowledge. No, to my knowledge, we— and we're currently training as many as we're able to. The most that we can realistically do at a time is 24 at a time. We just don't have the seats on the fire trucks. We don't have the training staff.

So we can do about 48 in a year. Yeah, I think that's why I was looking at the math and thinking that it doesn't actually math, especially if there's any attrition within an academy. Is it feasible to run 3 academies in a year, or would that create a choke point, I guess, with respect to academy staff and folks available to do the training and such? Member Baldwin Day, through the chair, we've envisioned how we might do 3 academies in a year. They would be overlapping and staggered.

I think it's quite possible. We wouldn't be able to do it with the resources we currently have. We would have to invest in training, training staff, and/or overtime to backfill the positions of the trainers. And So we've sort of workshopped that, but we don't have a specific plan in place. I also would like to just take a moment to emphasize the number of 50 is kind of a guess.

It's a moving target. Yeah, sure. Yeah, I'm not treating that as a fixed number, but just holding that up alongside sort of the pattern we've seen of both retirement and then, you know, separation, pre-retirement separations. Just starts to like feel a little tight. What would that look like in terms of resourcing to do a third overlapping academy in a single year?

What—. Do we have any idea what that price tag would be? It costs about— through the chair, Member Baldwin Day— it costs about $2 million to run the academy. That includes the salaries of the people that we are hiring, the cadets, It includes the turnouts, helmets, and the things that we equip them with. And it covers the cost of the firefighters and the fire officers that we pull from the line to conduct the academy and the overtime to backfill their positions.

As you know, we don't have a training staff that's sufficient to conduct our academy, so we have to— we do it with line firefighters and paramedics. And backfill their positions with overtime. It's a model that I think as our organization has matured, we'd like to get away from in some future version of our fire department.

I just don't know how we would get there. So the short answer is $2 million for another academy. Is there a cost savings to actually having dedicated training staff if we were to move towards that model as opposed to pulling firefighters from the line to do the training operations? Through the chair, Member Baldwin Day, we think so. As you will see when we get into our proposed specifics of our operating budget, there is a proposal to increase the training staff by 1, funded by a corresponding reduction in the overtime budget.

And this, I think, will pilot the notion of how this might work. And if this works, we might come forward with a request for more in the future. Okay, thank you. Okay, and Ms. Park. Thank you, Chair.

Chief, what is the approximate cost for training a recruit in the academy? Per person? Per recruit? Yes. Uh, I don't know the exact number to that.

Um, I would only be guessing. What I can tell you is that the, the number is partly dependent on the size of the academy. There's an economy of scale in doing a larger academy. If we hire 24 people, we can train them with 5, 4 or 5 trainers. There's a certain, certain cost for equipment rentals and things like that.

In a smaller academy, the per cadet cost goes up because some of those fixed costs are distributed across a smaller pool of candidates. I can get you an estimated number of what it costs. Thank you. And just as a follow-up, what would you envision if, if we had the ability to offer a defined benefit package, the retention would be?

Because I know we have an outmigration problem where people get trained, they stay for a couple of years and they leave. And just, just wondering, would there be a cost savings in having a defined benefit package that would retain some of those recruits? Member Park, through the Chair, I think yes. I mean, it makes sense to me that the answer would be yes. I'm not able to quantify that.

As I spoke about just a few minutes ago, we've had a handful of firefighters that voluntarily separated this year. Some of whom have surely indicated that it was because of the lack of a defined benefit program, and they've gone on to other states where such a program exists. And so you could surmise that the cost of that attrition would be saved by a defined benefit program. I think part of the real savings would come in the reduction in overlapping and recurring training. You train one person, they serve for 25 years, it costs less to do that than it would be to retrain every 5 years.

I'm not able to quantify that right now. Thank you. Okay, yeah, and I'll note, regardless of what we would like to do, that decision is not reflected in our budget. So it's a great conversation for legislative committee and certainly does have impact on our budget. But I think that's kind of where we'll continue that conversation.

Any other questions for fire at this point? 'Cause I know we have one more slide on fire and then we have police. So what we might do is, take our break and then come back to dig into APD because I imagine that will also be a substantive conversation. But let's finish up with fire. And if I may, I will add that just rough math, very fast order of magnitude, if you divide the $2 million cost by the 24 firefighters, you get $83,000 per firefighter in an academy.

I don't think that is an all-in, and we'd want to refine it before you walk out on the street and say that, but I think that that's a sort of ballpark. In terms of retention and the retirement system and those changes, we have I have heard in the last, I believe, year or two, AWU pays particular attention to the changes around that retirement outcome. And what their personnel studies have seen is that they transitioned from a workforce that was primarily in the +15-year category to being under 7 years. Of retention, and that was a couple years ago. So we can take a look at what that turnover kind of looks like and if there are any numbers that can be visible.

But that's sort of just the background on the detail that we've seen in other municipal operations. Thank you. So in the long term, it does look like that's costing us money.

Okay, next slide is the reconciliation page for the fire department. So we get through the reconciliation page starting at $133.3 million and take the workers' comp, general liability settlements that were put into the tax cap attributable to the fire department. We take those back out as one-time costs and change the GO bond amount, include the tax anticipation notes associated with operating fire department and the air The area-wide emergency medical service levy increase for CPI. This is being called out specifically because it is voter-approved language that enabled this CPI escalator. I believe Mr. Falsey can speak to this if there's any questions on that specifically.

But the salary adjustments at $4 million, this includes the transition of overtime into funding full-time fire training specialists. We are currently and have been for many months now working through the organizational structure of the fire department, the funding structure, the way the budget is laid out, any operational changes that can be realized quickly that may come with any monetary savings or operational improvements. And we will continue to do that analysis as we work with IAFF on negotiating some of the position changes for the mobile crisis team and other staffing changes. One of the things we are doing is looking at how the overtime is being spent and whether or not there are position changes that would afford us better operations with less overtime and lower cost. So some of those proposals will probably be coming forward as we work through that detail in the revised budget.

But the other adder is the police and fire retirement cost. And that is particularly interesting because the police and fire retirement cost can vary from year to year. And it is something that we will have to be talking about in the next year going forward because the costs are projected to need some adjustment before we get to '28. The proposed budget changes include adding some area-wide funding to Chugiak and Girdwood for their EMS operations. Because there wasn't additional cap room to make that increase, we reduced AFD's area-wide funding in order to give Girdwood and Chugiak the funding.

Part of this, I think, will sort of balance itself out depending on the bond or levy proposals that go forward to the community in April. So the final reconciliation proposed budget number is $138 million with a $4.6 million change from 2026.

Let's hear the questions.

Questions. Any questions? Since we were talking about retirement earlier, it's probably worth noting that this entry on the change here for police and fire retirement is the legacy municipal system that ended in the '90s. So this is funding a retirement system for folks who have been retired for 30 years.

Okay, I think not a question, but just, or maybe you can confirm if I'm reading this correctly. So starting with 2026, $133 million, continuation level $138 million. So basically we added almost $5 million of things that were essentially formulas and not choices, and then the actual choices that were made are net zero, because I'm seeing that the number at the bottom matches the continuation level. Is that correct? Through the chair, yes.

Or to the chair, yes. Ms. Baldwin Day.

I have one question and one comment, and actually my question is not on this particular slide. It's actually on FD11 in the big book. So I'm looking at program-generated revenue, and I'm wondering what are the miscellaneous revenues from '25 and '26. I realize our budgeted miscellaneous revenue in '27, and feel free to tell me this is a public finance question and I will just like email them and ask, but I'm curious what, where did those, where did the, what happened in '25 and '26 that we're not anticipating in '27? Through the Chair to Member Baldwin Day, I don't know that I can answer that.

I need to dig into it because I don't know what happened in '25 and '26. They have not finished closing them or moving through the months, so we don't know the detail on it necessarily, but we can ask and it'll take some time to get a response, but we can include that in the answers to the questions, or if we get an answer before the end of the day. Yeah, certainly not urgent. I was just wondering where we found like a few tens of thousands of dollars in miscellaneous funds. And again, it's not an urgent thing.

It won't factor into like how I'm evaluating the budget at all. And then my comment is I've gotten really interested recently in how we stack up against peer cities when it comes to things like fire and police. And so I just wanted to throw out, we don't really have any, like, coverage peers that I've been able to find in terms of, like, the, the land that we cover. But I found some really interesting population peers when it comes to fire and fire staffing. So if I did my math right, we have like 326 line firefighters And if we look at, if we look at cities with similar population, one of them is Plano, Texas.

In terms of, they sit right at about 293,000. They have about the same number, actually more than we do, but they cover a geographic area that is significantly smaller, like on the order of magnitude of like 10. So that's kind of an interesting comparison, I think. When you get into slightly larger areas like Lexington, Fayette, Kentucky. They have, actually have 523 officers in 23 stations, and they're only covering 284 square miles of landmass.

Their population is only slightly larger than ours, 329,000. And they also are partially state-funded when it comes to their operations. And then there's some interesting comparisons in Pennsylvania and Minnesota, where the funding model includes local and state or local and county money, and the operations— operational numbers in terms of staffing are much higher. So like 459 sworn officers, 626 in the fire department. So I just wanted to put that out there that we are incredibly lean when it comes to our fire operations.

And when we look at what's happening other places in the country, we are, we are We are not where I personally think we need to be in terms of adequately covering a city of our size, even with our volunteer fire departments in Chugiak State Park and Girdwood. So anyway, just wanted to like put that out there for folks that we're talking about a very small department relative to landmass and population. And through the chair to Member Baldwin Day, the premise of the sort of the geography of our operations is a challenge for us, not just in the fire department, right? We talk about it with roads and development services and the costs associated with maintaining or developing this level of square mileage. And those communities that you referred to, they do have multi layers of funding and different layers of government providing secondary services that then support the costs of those local governments.

And, and the real real challenge is how do we deal with the real geography we have with the real population we have. And the idea that there is a comparison out there is, I mean, I really haven't been able to find one, right? We can find them that have same population, same operating amount, same, you know, personnel count, but they do not have the square mileage within the municipality that we have. And that, I think, is something that we have to talk about and communicate regularly to understand that we aren't Boulder. You know, we, we don't have that, that limited mileage to maintain.

And the fire department is a service response. And so they need to respond to the whole service. It's expensive.

Any other questions?

Okay, not seeing any right now. So I think that takes us to, as I said— oh, sorry, I just saw Mr. Martinez is in the queue. Go ahead. Just for the last point, the budget director, but essentially We have worked to— the maximum capacity versus the necessity.

And what I mean by that is when we know the historical data demonstrates that Anchorage grew outward with other people's money, Other communities may be geographically small, but we didn't have to go as big as Anchorage. And now the costs are all part of funding for— and so I just wanted to make sure that historical— maybe geographically bigger, and we may be unique in terms of area, but we didn't have to develop it all if we had a different model of focus and instead of inward development. Thanks. And Mr. Martinez, sorry to interrupt. I'll just note, we can generally hear you.

I think we got the points, but we are hearing a little bit of like garbled in between. So just for your awareness, thanks. No problem.

Okay, thank you. So with that, we are going to— and I know we have a lot to do today, so I'm going to say we will be back on the record at 1:07. So let's say 1:20. So we will do a working lunch. Folks on the phone can hopefully rely on that.

And then, of course, if members do need to step out for longer, please feel free to do so. But I'm going to try to keep us on track. Thank you. So we are on break for the time being.

Okay, so I will note it is 1:22.

Molly, are we recording? Okay, I think we're good. And I was about to say, I was going to do a time check on our schedule for this afternoon, but we are now joined by the OMB Director, so that's great timing. And I will also note, as those folks are sitting down, we are going to move on to the Police Department. So I'll invite up folks from APD and anyone else who needs to be at the table.

And then I will also note, as I said, our schedule was a little bit off, so it looks like we had an extra hour, but we are still moving through that hour. So I think, I'm assuming that the Department directors will plan to be here at 2. I would hope that we would get to that discussion before 2, so we'll just kind of see as department folks shuffle in. They're usually early. So anyway, but the next section will be the Building Our Future, which includes Public Works, M&O, PM&E, Traffic, Parks and Rec, Library, Public Transportation.

So if and when one of those departments shows up, we may take them out of order, but to make sure that we keep moving through our business. And then of course after that will be Housing and Development under Building Our Future. And then good government in the afternoon. So with that, we will turn to APD. I'll turn back to Director Brouse.

Thank you, Madam Chair. Okay, moving on to the police department. The operating summary for APD again includes admin and resources, Chief of Police, Girdwood, operations, and the Turnagain Arm Police Service Area, also known as TAPSA. The 2027 proposed direct cost total is $158.2 million. The IGCs are calculated at $19.5 million, and the program-generated revenue at $7.4 million.

The salaries and benefits for the police department tally up at $121.4 million for 613 positions. Overall, it is a year-over-year change of less than 1%. Any questions on the summary page?

Questions from members? I will note also several of us are eating lunch. Apologies in advance for any food sounds. I do actually, I have one general question. So because we, you know, folks talk a lot about the number of sworn officers we have, can you be clear how many sworn officers positions we have, how many vacancies we have at this moment.

We know that can change over time. And then generally, kind of for that number of officers, just giving us a sense of scale of how many support positions are needed, right? Because the whole— the department is all of it, so that's dispatchers, other folks. Be helpful. Thanks.

Yeah, to the Chair, uh, I believe it's 416 authorized right now for sworn. We have about 42 vacancies currently. We have an academy going that has 22 in it, as well as some recruits still on FTO that are working on getting released, and our overall number is just over 600. So that gives you kind of the support balance there over the 416. Okay, and do you happen to know the vacancies in dispatchers?

I know that has been an issue as well. I, as of a couple weeks ago, it was 8 dispatchers down. Out of how many? Out of 63. Okay, thank you.

Other questions from members? Spaulding Day. Would you repeat the number of, um, the number of sworn officers versus, um, CSOs?

Yeah, through the chair, Member Spaulding Day, it's 416 sworn officers, and I believe our number of CSOs currently positions— they are not all filled— is 21.

Thank you.

Okay, other questions from members on this page? Okay, we move to the next page. Okay, moving on to the reconciliation page, we have direct costs of $153.7 million from the '26 revised budget and moving through our continuation budget process, we removed the workers' comp general liability settlements, the change on the GO bonds and the tax anticipation notes for debt service. And the salaries and benefits changes for all of APD, including position adjustments, is $4.2 million. As well as, again, you see that police information technology levy population CPI escalator, voter-approved CPI escalator specifically for that IT levy and $110,000 for the legacy police and fire retirement system, as well as $17,000 for Girdwood GBOS changes, gets us to $158.2 million for the proposed budget of 613 positions.

Questions? And also note we were joined in the room again by Mr. Goecker at 126. Ms. Baldwin Day. Thank you. Were these position reductions vacant positions that were eliminated, or did something else happen?

Yes, through the Chair, Member Baldwin Day. This was a difficult decision for us to make, but we were having challenges getting enough police officer recruits, and so we changed these positions. That's how we staffed up the CSO program.

Thank you. And some of the position adjustments were also the result of collective bargaining and negotiations changes within HR, and so some of the positions needed to be upgraded or adjusted.

Okay. I have a question just in general, understanding that this is continuation increases, the one kind of policy choice was the Girdwood addition per the request of Girdwood. I know that's something I've seen multiple years in the budget that that comes through. I'm wondering beyond that kind of I know it's not specific to a department, but in general, was there any— or maybe it could be— is there any kind of one-time funding represented here that is plugging, you know, an operational gap? And I know we're talking big picture about the whole budget, so it's hard to parse it down into departments, but just wondering what that would look like or if there is a department where that was done.

To the Chair, not specifically within APD. I will say that one of the Challenges here is that you mentioned the 2027 proposed budget changes are limited to GBAS recommendation, right? So APD is in a continuation budget only. There are no other changes that are occurring within their budget. That does not mean they do not have cost increases and demands.

As I mentioned, the cell phones, that has never been budgeted, $400,000. There are other contractual increases that are occurring at APD that are not included in this increase. We are asking them to absorb those increases that they are going to have to deal with, or we have to deal with them at first quarter. You saw this in the 2026-1Q revised budget with the jail contract. That was a million-dollar increase that we either have to pay, or frankly, I don't really know what happens.

But that increase is something that either is included in a contract or something that shows up on our doorstep from whoever the vendor is, depending on the circumstances. And there was a period of time where that contract did not see any sort of increase for maybe 5, 10 years, a very long time. And the state showed up and said, we realized we haven't been increasing this, so we're going to need to bill you an extra $2 million a year all at once. And that was back in 2016, maybe 2017. And so that kind of activity can occur, and depending on the revenue available, we have to ask APD to figure out how to make it work or make operational adjustments to change the cost of operations.

Okay, thank you. Other questions from members?

Okay, not seeing any right now. Okay, moving on to the capital. We missed APD and PM&E at the last capital review. So these are the two APD capital projects that are included in the budget this year. One is a request for APD vehicles, and we've heard a lot about that, and Chief Wilson can tell us more if we want to hear about the status of their fleet.

But also the Elmore Station parking lot. There's a picture of it there. It is a lake, not a parking lot. And I believe Chief Wilson can tell us about what happens with that on a daily basis. So any questions on their capital projects?

Questions, members? Mr. Johnson. I know we've talked some in the past about our aging, aged police fleet, and then how that has been a growing and chronic problem because we haven't budgeted for replacing vehicles at a sustainable rate. I'm looking at this bond and $3.75 million for that. I mean, can you give us a sense of how much that will do to sort of get us cut up?

I mean, do we have a metric like the average age of a vehicle will go from this to this if it passes? Through the chair, Member Johnson, we could absolutely get that number for you. I don't have it off the top of my head, but this is the ask that we've tried to come up with that would get us to that sustainable rate you're talking about. We still have 2011 Impalas in rotation. To give you an idea, the SUV fleet that when we started buying those are well over 100,000 miles, and, and so they're going to need to be replaced.

And this was the let's get into a rotation of where we can actually start to see some movement on it. We have been fortunate enough to have some savings here and there and get some money, some grant money to replace some cars, but It's been very challenging to keep up with that fleet, as we mentioned before, but I can get you those actual numbers on that.

Okay, thank you. Thanks.

Mr. Girdwood, then Ms. Baldwin Day, then myself.

Thanks, guys. So we've had a hard time getting bonds passed for APD. What is the What is the plan to attack it differently, or we're going to attack it the exact same way? And this might be more of a policy question, more for maybe Bill or—. Through the chair to Member Gerker, the ballot measure that failed, was that last year?

Last year was a levy. And so it was an annual recurring levy for a not-to-exceed dollar amount. And levies come across to the taxpayer in a different way, a higher cost. Than a bond would. So we tried the levy route, which would be a recurring, or could be a recurring, expense under the— or that increases the tax cap.

This is the offering of a bond proposal, so it is $3.75 million of a bond financing request, which is a much lower cost than a $3.75 million collection of a levy. So this is the secondary offering if the levy was not something the community wanted to vote for. Aside from that, as the chief mentioned, additional grants, and anytime there is additional revenue either within APD or other departments that do not have a different priority, we are funneling money towards fleet and fleet replacements generally. Because the snow removal and equipment levy was approved and has been exercised and M&O has been using that revenue. It means that the rest of the funding that exists in general government can support the general government fleet because now equipment is covered, whereas before we were having to share that around, that revenue around with everybody, and it wasn't enough.

So it gives us a little more room for APD, but we still need the replacement revenue because It's so old. Yeah, it wasn't—. Wasn't there a bond a few years ago? I forget exactly when, but for fleet, for the APD fleet, that also got rejected?

Through the chair, I'd need to check, but I can—. Yeah, I guess what I worry— I mean, what I heard you describe is like, well, this— the reason that this will pass is because it's a bond instead of a tax levy. I think we're maybe being way too generous that people are going to understand nuance here. And so my point is, I would not be confident that either of these would pass, just not at all. If I'm just being totally candid with you, I don't think they'll pass.

So you guys probably should have a backup plan or a different plan of attack and taking it to the public in a way that the public would find it palatable. Through the chair to Member Girdwerker, I would hope that the dollar amount on the ballot being significantly different would make a difference. But I agree with you, none of these are guaranteed. Absolutely not. And that is part of the challenge with the system that we have and the fact that we don't have maintenance funding built into our budget because we do have to rely on the feedback and approval of voters in any given year, and that does not guarantee us replacement vehicles.

So it's part of the challenge, but I think that it is absolutely something that we we can't stop trying to do because we need the vehicles to support the operations. But yeah. Thanks. Ms. Baldwin Day next.

Yeah, this is really a question of less about capital and just more about like distribution of labor. So in each of these different division details in the big book, there are, for lack of a better word, there are various flavors of police officers listed within each division. And I'm curious, are, are all of these officers doing like work in squad cars, or are some of these folks doing like more office-based work? And corollary to that is how many officers are actually like out on the street doing policing work versus not. It's not entirely clear based on what's in here, um, how that all shakes out.

Yeah, through the chair, Member Baldwin Day, um, all the sworn officers do street work of some kind. So even detectives, they go out to crime scenes, they go interview witnesses and suspects, they canvass areas. All of the specialty units also go out and do police work just in different capacities. And some of those specialty units, when you have like the MIT team, they're out there with a clinician in their car working that, or the Impact Team, they're out working in the various problems areas of the community. So I don't know if there's a team that just sits at a desk all day and doesn't use their police car.

In that capacity. For detectives and such, we don't outfit the car, so they'll drive soft-mark vehicles that do not have all the equipment a full-blown patrol car has because we want to reduce the cost of that car so that it meets their needs, but they still have the safety equipment, meaning lights and sirens and the radio, so that they can respond and take action.

Thank you. So is that why it's divided up this way? I mean, there's For example, there's 52 senior police officers in the admin and resources division detail, but then there's 185 senior police officers in the operations detail. Is that based on the type of work or the unit that someone is assigned to, or is that some—. Is that okay?

Yeah, through the chair, the senior police officer means that they have 5 years of service with Anchorage Anchorage Police Department or greater. And so what they bid for as far as positions go, so they apply to be at the part of the MIT team, they apply to be an impact, they apply to be in the traffic unit, and then they are successful in those and they get assigned to those. And then we have the department broken up into 4 divisions and that's where they go. Gotcha. So just for my edification, what, what is included in the admin and resources division in terms of those types of assignments versus police department operations.

Uh, through the chair to Member Baldwin Day, I'd like to take this opportunity to say, uh, Chief Wilson and I were having a conversation about about this before we started this work session, and one of the things that OMB is currently working with, both as I mentioned in the fire department but also the police department, is aligning the organizational structure to ensure that it is both sound for budget purposes but also sound for operational purposes. One of the things that we have seen is the amount of sort of change and vacancy factor and position adjustments that have occurred over the last 3 to 4 years have resulted in some of the org structures within SAP needing to be aligned for appropriate reporting purposes. And some of that will have an impact on control and trackability of OT, and as well as making the— ultimately the way the budget is laid out specifically reflect a clear or different picture than the budget currently does, if that makes sense.

So to make those adjustments, we have been working with APD and HR and will be making some adjustments before we get to the revised budget. Thank you. Yeah, that's helpful. I was like, wait, there's police officers listed in like 3 different places in all of these divisions. And what does that actually mean?

Yes, through the Chair, Member Baldwin Day. So administration has the police academy and they stay in the administration side of it until they are cut loose from FTO. So all the police officers that are in the academy and/or in training are in there. Also, the officers that run the academy are in the administrative side. So you'll see police officers kind of run through that whole thing.

Uh, and then to kind of expound on what, uh, Director Rouse said, the SAP is kind of pointing a couple things in the wrong direction. So it kind of populates on one side of the house and we have to manually, um, kind of break that down until we can get this backend fixed.

So, so, so that's what's, that's what's happening in the admin and resources side. And then there's more sworn officers that are part of the chief of police division, which that much I, that much I'm, I'm square on. And then The balance are in the PD Operations Division. Okay, got it. Thank you.

Okay, I have myself in the queue regarding the capital projects, kind of following on to some, some of Mr. Gerker's line of questioning. So, and you already covered kind of the bond versus levy. I assume we'll get to the bond conversation. Obviously, this is the first step in that, but these would potentially be together on a bond that would be what we'd call the police bond, these two amounts, is that right? Through the chair, or to the chair, yes, because this is within the police service area.

They would need to be on a bond specific to the police service area. Some of our area-wide bonds can be packaged in different ways because they are area-wide. And then, um, this, uh, Elmore Station parking lot reconstruction, so as I recall, there was a bond this year that did not pass. It was, I think, $300,000. That was not intended to be the full project, and I remember at the time there was a lot of discussion and the need was spoken to, right, that there's— it's not just repaving a parking lot, there's drainage issues, etc.

But I'm curious, kind of, can you briefly describe this project, what it would fund, how it is different than last year? Because I think to Member Gerger's point, right, we— it is not a given that these pass. And so just wanting to understand, and maybe your opportunity to make the case for what this project is and the urgency of it. Of it. Thanks.

Yeah, to the Chair, this is what you're looking at in that one picture is that's our west lot, which— oh, and I just walked in, but they have done their best to try to get that thing to drain out and it will not. So that's our employee parking, and it looks like that quite frequently. The east lot is not actually visible there and has a similar problem that sits right over our fuel tanks. So we have a significant drainage issue, uh, as well as just the asphalt breaking up and wearing apart, uh, trying to patch those holes as they come up when they become too much of a challenge. But, uh, therein lies the, the biggest, like, emergency kind of— or the emergent issue.

Um, the bond last year that you're talking about, that kind of encusted an engineering plan that included, like, the pieces that are falling off our building that they keep gluing back on, or what have you, to figure out how we could make that building and paint it and kind of keep it in good repair. This is more just the straight parking situation we have on both sides of the building. Okay, thank you. Other questions from members?

Okay, not seeing any right now. So, I mean, I believe that was the last slide on police. So, and I know we had our next slide says lunch break. We obviously moved past that. So I'll just see if there's any other kind of wrapping up the Safe Anchorage before we move on to our next kind of chunk of topics from Miss Brouse or anyone else?

No, I think we can go right ahead and we can go into, let's see, Public Works. Thank you, Chief Wilson. Okay, yeah, thank you. So for folks' awareness, we are now moving on and we're actually, well, in theory we're a little ahead of schedule, but we're pretty much just on schedule with our time. So we're moving into our Section 3.

Which is a little bit before 2 PM, and then the number of departments are listed there, starting with Public Works. So we will invite up Mr. Culhace. And as a reminder, the other capital discussion we did not get to is road projects. Of course, that's one part of the bonding process in general, but I imagine there'll be discussion of that as well. Yes, we basically made the departmental conversation for PM&E the capital conversation for PM&E, as the department is made up of 5 employees and it's a relatively relatively small operating conversation.

So once Director Coley gets us settled, he can give you details, but I will start with the department summary for Public Works. In Public Works, for 2027 proposed, we have a direct cost total of $1.84 million with charges to other departments of $1.8 million and program-generated revenue of $23.8 million. Overall, the salaries and benefits is $1.7 million for a direct cost total of $1.844 million, including 11 employees. Any questions on this page?

Okay. Moving on to the reconciliation page, we start with the 2026 revised budget total of $1.7 million. $1.75 Million, include the salaries and benefits adjustments of $91,000, and land at $1.844 million for 11 employees, as I mentioned, for the 2027 proposed operating budget. I will make a point, I think, at this point in time, because we've moved into some of our— well, we're not out of the big departments yet, but one of the things to notice in these pages is that while the negotiated contractual increases for our bargaining units and our, our merit increase for our non-reps are included in these labor lines. What is not currently included are increases for executive wages or non-represented wages over and above their 2.5% annual step increase.

And so when we get into particularly the internal service departments, you'll see that those departments that are made up primarily of non-reps and execs have little to no labor adjustments included at all because they have not been included in the budget. Whether or not that is part of the approved process still remains to be seen. But this year in '26, we made those budget adjustments during the revised process after the conversation had been had with the assembly.

Questions? Okay. Well, and I also know we were joined by Mr. Collis and Mr. Dole, so if folks have questions, let's dive in. So I think first, Ms. Baldwin Day.

I actually did have a question on the previous slide, which is in the contractual and other services. There's a pretty significant uptick from '25 to '26, and then we're looking relatively flat for '27. What changed? Do we know what changed, or is this another thing I need to ask Public Finance about? Through the Chair, again, the 25 column is actuals.

The other two are budgets. I think maybe a question that Mr. Colhays could answer is, what do you think, what are you going to pay for this year?

That's all right. I have a working list of things to email Public Finance about, so I will just add it. Don't worry about it. Thank you. Thanks.

And just for the record, Mr. Kuhlheiss said he was— he will follow up. Other questions from members?

I do have one question. So I think it was last year was the reorganization of Public Works. So just wanted— how is that going? And, and then two, separate from that, Can you remind me, I think Public Works is where there's one position that basically deals with road service areas, limited road service areas, rural road service areas, etc. And I think that sits within Public Works.

Can you describe how do those road service areas contribute to— is it that position? And I know that's probably baked into this budget somehow, but just how do those funds from those other service areas flow into this department? If at all.

And sorry, can you turn your microphone on? Yeah, that's okay. Thank you.

First question was, how is Public Works functioning under the reorganize? I presume you're referring to the entire Public Works umbrella of maintenance and operations, traffic. Yeah, yeah, I know that was a significant discussion this time last year. Yeah, uh, functioning very well. Um, I, previous to, uh, Manager Becky Wynn Pearson's departure, coordinated very closely with her and with Bob when Bob French came on board.

Now I would say my engagement is primarily with Bob because of the pending formal reorganization to have Public Works report to Bob as opposed to reporting to the Municipal Manager. But I still am obviously very engaged with Bill Falsey as well. So all that to say, I think it's working very well. There's good communication between the departments under Public Works, and I think very good communication upward as well. And I, if there's a different story, I'd be glad to hear that.

Um, and then, uh, your second question, I'm sorry. Yeah, second question was kind of, I know there's a position that deals with contracting, administering boards, things like that, uh, with the LURSSAs, RRSSAs, the road service area. So just curious kind of how Does that— is that reflected in this budget, and how does that look? That role falls primarily right now to Courtney Petersen, who's the manager of Public Works Administration. That has historically lived with that position there, and this is where Member Brouse may help me.

The, the LURCs, when they tax themselves, there is a component of that that comes to Public Works Administration to fund that support, and it's some percentage of of the tax. And to the chair, I am no more help than Kent was there because I don't know what the percentage is, but we'll get it and figure that out. But there—. That, yes, part of the, part of the funding mechanism of the service area support is some form of IGC, but whether or not it covers the full cost, we'll get you an answer. Thanks.

Yeah, and I imagine that varies per service area and all of that, so I was just curious generally if that's how that works. Yeah. Okay. Okay, thank you. Other questions?

Okay, I don't see any right now. Thank you.

Okay, now move on to maintenance operations. I think we need to add a chair, right?

Yeah, I'd say there's also an available chair on the other side of Ms. Brawse, and actually there's one in between in the presentation laptop. He doesn't want to be first.

Okay. So we are being joined by Director Troop here, and we have, as we mentioned, Director Colhays and Director Dole. The maintenance and operations budget. You'll see the 2027 proposed direct cost total of $117.6 million, with IGCs and program-generated revenue landing us at a net cost of $101.7 million, yeah, and a position count of 172 for an overall increase between '26 and '27 of 3.61. Some of this increase is attributable to, as we mentioned earlier, the positions that were that are added or being proposed to be officially added in the budget of the 7 heavy equipment operators, as well as some new costs associated with the negotiation of the operating engineers' contract for street maintenance and the need to increase their wages to improve retention and recruitment.

And I believe we have a pretty staffed-up operation at this point.

Any questions on the summary page?

Miss Baldwin Day. What are our part-time MNO folks up to?

Through the chair, I don't think we have any part-time MNO folks.

Looks like those are—. I think those are seasonals. Oh, seasonal. Okay. And what do they do?

We have some seasonal equipment operators at street maintenance. And so I'm assuming seasonal means winter? I'm sorry, I didn't hear you. Oh, does that mean— are they winter employees or—. Yes.

Okay. Thank you.

Okay. Other questions from members?

I do have one brief question. Can you remind us? So we did a reappropriation, basically it's so it wouldn't be reflected here, but the idea being to cover the, I think, the rest of 2026. Can you remind us the order of magnitude of that? So the reappropriation that the assembly approved was for the 7 heavy equipment operators as well as some additional overtime associated with the demand from the first quarter of this year, and I believe 2 or 2.5 in non-labor contractual in order to boost any demand for snow removal in the fourth quarter of this year.

But over the total was 3.5. Okay, thank you. So essentially, you mentioned those equipment operators, those were essentially created in 2026 and they're being put into the budget 2027. Correct. Okay, thanks.

Okay, don't see any other questions right now.

Okay, this is the reconciliation page for maintenance and operations. If we start with the 2026 revised budget number of $113.1 in direct costs, remove the workers' comp and GL settlements from the tax cap in '26, include the GO bond totals for $3.3 a reduction in TANF of $200,000, and the adjustments within salaries and benefits for $1.44 million, and the ARDSA fleet levy CPI escalator of $115,000 lands us at the continuation level of $117.5 million. The proposed budget changes are to permanently include the 7 full-time heavy equipment operators for in-house snow removal, and a corresponding reduction in contractual snow removal, specifically because we now have the staff, or we will have the staff in-house to do that work, as well as voter-approved bond O&M and changes within the Girdwood service area. Altogether, a 2027 proposed budget of $117.6 for 164 full-time employees and 8, on this page, seasonal temporary employees.

Any questions on this? Miss Scout. Thanks. Um, this—. I'm not certain that this question makes sense for a budget work session, so bear with me.

Um, I met with the Anchorage Senior Center folks yesterday who facing increased costs to their operations, just like many of us around the city due to increased snow and snow plowing costs. Um, are there pathways to work with Maintenance and Operations to add, or like request adding places onto snowplow routes versus making budget requests? Through the chair to Member Scout, I believe they would need to come with the funding to add those routes. Okay. And actually, what you are identifying right now is specifically the scenario that got us where we are in this moment.

Yeah, we made those kinds of changes years over years over years, but never made any requests to bring funding or increase the tax cap to accommodate those changes. And so those service level expansions occurred without the funding to come with them. Got it. Thank you. Okay, other questions?

Ms. Baldwin Day.

So I, I'm looking at the vision summary on page MO7 in the big book, and I, I understand, I think I understand, very willing to be corrected, that contractual and other services includes snow hauling. Is that assumption correct?

Through the chair, contractual services does include snow hauling, but we have the money that we historically use for snow hauling is carved out of that money. So that, that's taken care of this. Sure. Do we expect—. I mean, I'm thinking about the increase in fuel costs.

What do we anticipate is going to change, or how much do we think that our snow hauling costs are going to increase in '27 versus '26?

We're still operating on the contract that we did last year, so the hourly rate will just go up by the amount dictated in the contract, and we don't have any way guess about the amount of snow that will be hauling. True that. Cannot guess on what Mother Nature is going to do. And when, when do we renegotiate those contracts and would potentially have a different hourly rate? I think we have a couple more years on this contract.

Okay, thank you. Okay, next, Mr. Handeland, and I'll have myself in the queue. Yeah, so I'm not sure if I see it in here, I guess, for, I guess, broken out to, I guess, snow operations and stuff, what's the rough cost of that?

I would have to get back and get that number totaled up. Do you have, I guess, kind of a rough estimate on that?

No, I'll get you the exact number. Thanks. Okay, I have a couple of questions. One is just a follow-on to that. So you mentioned there's some seasonal positions, but generally speaking, your staff is year-round.

And so essentially, it would be your department probably divided by number of months or something like that to apportion out the cost that goes to dealing with snow in the winter. Is that correct?

I guess I'm saying you have a person that works for you year-round. Part of the time they're driving a snowplow, part of the time they're doing something else depending on what time of year it is. So part of this would be attributing some portion of your annual budget to those months of the year, is that correct? Yes. Yeah, I think we'd all be interested in what the number is, so follow-up would be great.

My separate question is, I know we talk a lot about, and I think people assume this entire budget is about our roads, you know, streets, sidewalks, all of those things. I know you also have a function related to buildings. So I know, I imagine it's real estate that holds leases, things like that. I'm seeing nods. But I'm wondering kind of how can we generally understand, maybe it's a percent of the budget or kind of what kinds of things in your M&O budget deal with buildings?

Are you paying utility bills? Is it minor repairs? You know, just I want to make sure that we don't lose sight of that conversation because so much of it does focus on roads.

To the Chair, we provide all the maintenance services and duties for general government buildings. Including paying for utility bills, security services, parking lot snowplowing, and summertime parking lot maintenance. So it's a pretty large scope. So then is it fair to also say that some of the contractual services— you just mentioned security, you mentioned plowing parking lots, sweeping parking lots— so those things would also fall under your budget? And to the Chair, I think we can, with the answer on snowplow operations, we can also break down some of those other details specifically so you can see how the M&O budget— what those contracts actually support, right?

They may not be our negotiated labor, but they are labor performing services of some kind that create an impact if you remove it. And knowing that specifically around the utility costs in the M&O budget, I think that's another one of those items that over years, as the utility costs have gone up, those dollar amounts have not been added to M&O's budget. Some of them have, depending on the administration at the time or when the requests were known, but there are costs like utilities and other ongoing annual costs that M&O and other departments have been asked to absorb. And so it creates a bit of a challenge in operations because they have to make the tradeoff calculation depending on where they are in the year and what is actually in demand, and particularly if anything else is broken already, and then you have to have less funding because you had to fix the broken thing, etc., etc. So I think, but I think that, that breakdown would be very informational, and we can get that as part of the answers to this.

Okay, yeah, I would very much appreciate that. And one other thing I'll just ask briefly. Is, I guess, generally speaking, is some of your budget year over year utilized for, say, minor repairs of buildings? Or, because I imagine at some point there is some issue that becomes too big that it will not fit in this budget. But like, how much are you in the course of a year utilizing some part of your non-labor budget for, you know, fixing minor repairs at various buildings that we own?

To the chair, we allot $476,000 a year for capital repairs through our facilities maintenance department. And that's across the board, all facilities? Okay, thank you. Mr. Handeland. Yeah, so I mean, kind of my question with trying to think, 'cause I'm looking at these charges to other departments, when does it rise to like, okay, we're charging another department, it's showing up on their budget versus, I guess, M&O, I guess it falls under there.

So can you give us, I guess, a little bit of background on that? And what— explain this to me more, your question exactly, because I'm trying to— I think I know what you're asking, but I will—. Because you're talking about like some of the utility costs, and then, I mean, you mentioned security, but I thought we saw, I guess, security under some of the other budgets. And so I guess when does something, I guess, rise to, oh, hey, we are going to go and charge another department, it is going to be under their budget versus, I guess, falling under the M&O budget? Through the Chair to Member Hanlon, the answer is on the direct costs on the cut page earlier, it was under facilities, the security reduction.

And that is because M&O, as our municipal department, supports all of our municipal facilities. The same way real estate supports all of the municipal contracts for their real estate. So M&O holds, or is supposed to hold, the utility costs for our buildings, the maintenance and operations-related items associated with our facilities. And that is why IGCs exist, frankly, because the department who is in charge of managing them needs to be able to manage them, but they need to be charged in the place that you are actually accruing that activity. So, so the line item may exist in M&O's budget, but it needs to land in venues in the mayor's office, or in the municipal manager's office.

The IGCs are the way we do that. And I think for the most part, anytime there is a new cost that is onboarded It goes through an IGC process, particularly if it is for an internal service department. There are formulas and calculations and all kinds of breakdowns. Happy to do a work session on it. You guys know we love IGCs to explain exactly what that is and how those are, are decided, because it is by square footage, right?

So Maintenance and Operations, one of their primary IGCs is that OMB gets charged for square footage of the building proportionally to however much that cost is, right? The general government has to pay M&O back for the— for City Hall, if you will. So the IGCs go back and forth.

If the downtown library didn't exist, we would have a different amount of IGCs within the library. We had to go through the IGC process process when we created the downtown library. And you go through and you calculate all of the costs and where they are supposed to go. And then they are, depending on the department, basically fractured into teeny tiny cents going in different ways. And HR's IGCs— HR is providing a service of payroll, of employment onboarding for every position that Director Troop has.

He pays a proportional amount of HR's budget for each head that he has in his department. So if you pay payroll to an employee over 26 pay periods, then those 26 transactional activities from payroll are IGC'd to Shea's department because he has the employee who is eating that 26 pay periods of activity from HR. So that is how all of this is broken down, because we have to have some sort of proportional loop that lets us know that our internal service departments are supported at a cost structure that the final taxpayer can cover. Okay, and so then the— I guess the $92 million here is a essentially the operations and stuff that is not tied to one of those other departments there. Yes.

Okay. And so, I mean, I guess one of the other things with, I mean, my question around the, hey, how much are we paying for snow is because when we brought up here of like, well, hey, how much the fire department compared to a city in Texas? Well, I'm assuming their snow plowing is probably much minimo—. Much smaller than us. And so, So I guess kind of putting some of this into context of like, okay, we do have higher costs there, and also for energy, some of this stuff kind of to, I guess, explain to the public.

Right, and as an update, I will say that OMB is also working on essentially making the IGC formulas and all of that detail posted on our website so that everybody can see the departmental breakdown, et cetera. We are trying to do the alignment all of the IGCs, particularly with the fire department, the police department, M&O, making sure that the calculations of those IGCs are current, because like all of our budget activity, we do update them. IGCs are run every single budget iteration. So every time the budget changes, you have to rerun IGCs because you may have adjusted something within an allocating cost center that then needs to go to other places, and it changes everybody else's budget. This is why this budgeting process is tricky.

Trust me, I used to show up all the time and be like, hey, I have a great idea for $100,000 amendment, we could do this, it would do this, and then immediately it's, you can't, because the IGCs then make that not a functional amendment. So you have to figure out a different way to do it. Understanding IGCs is one of the reasons we sort of say, if you, if you maybe have an idea about an amendment, please talk to Molly or me, because those IGCs will completely change how we have to go about accommodating any amendments. But once those calculations are posted, we, we run them with every single budget iteration, and then at revise approved, they change. If a department does not proactively say, hey, the IGCs need to adjust, we stopped doing this, or we need to do X, Y, and Z, then OMB may not proactively adjust any formulas.

We do adjust formulas when we know they need to be adjusted. So however many years we've had turnover at the director level means that the familiarity with the IGCs is less, and making sure that everybody understands what the IGCs calculate and what they pay for right now before we make the final adjustments to the IGC formula is something we're working through while we do all the other stuff.

I'll also jump in to say, at the risk of doing some real-time research, I consulted the ghost of Becky Wynn Pearson, and she presented a snow budget about this time last year to the Transportation Committee. So I pulled up those materials and shared them with this group, and if you guys want to take a look at those, maybe we'll have a number for you relatively shortly. Thanks. Yeah, I know, I know there was some intention to discuss snowplowing operations at the October Transportation Committee. I know that didn't happen, so I think the next one is in December.

So I know that would very well— good chance that there will be snow on the ground by then. But if that's a topic of interest, I'm not the chair of that committee, but I think that would be a good place to dive in more. Okay, any other questions on M&O? Miss Baldwin Day. Yeah, I think my question is really just just how ensuring that I'm reading the summaries and then detail appropriately.

So on MO page 7, 8, and 9, is this MNO for ARDSA versus MO 10 and 11 being MNO for other service areas, or is it not quite so tidy? Not quite so tidy. It's not MNO ARRTSA only. It's, it's other service areas, and MNO includes ARRTSA, but it's not limited to. So the other service areas are outside of ARRTSA or area-wide, but they are the LURSAs and the URSA.

So I think I would like to have a separate and not here conversation about how all of this is broken out with like the full-time positions that support other service areas. And I think back to Member Brawley's question about, you know, what is the net cost to the municipality of the administration of M&O and other—. And outside of ARTSA. And then the last—. My last question is, is the division summary on MO-17— it says maintenance and operations at the top.

Is this actually Equipment maintenance and operations.

Yes. Okay, thank you. Yes, sorry, I had to familiarize myself with it. Okay, that was— yes, that was— that was That was—. You can see the recon page, the page before on MO-16.

It says equipment maintenance operations recon. And so we're just going, okay, that, that is, that is helping make things make a little more sense. Also, I just want to say that M&O gets the award for the best graphic because the little dump truck icons on MO-13 through 15 make me really happy. Thank you.

Yeah, great opportunities for graphic design in our budget book. Okay, I think we are done with this department, certainly not done with the topic of roads though, so I think we can release Mr. Shrub. Thank you. And next we are moving on to Project Management and Engineering. And again, as was previously stated, this department more than most is mostly capital anyway, but we will also be covering the piece of the capital budget that we didn't get to before.

So turn back to Ms. Brawley. So on to project management and engineering. The department summary starts us at a 2027 proposed direct cost of $1.01 million, not $1. Charges to other departments and program-generated revenue land us at a net cost total of $286,000. This, I think, is is part of what Member Baldwin Day was talking about a few minutes ago in the sense of like how much does it cost us, et cetera.

That is the net cost, but it does not necessarily include the breakdown of where the IGCs are coming from and whether or not they cover the costs of the IGC demand. So that analysis is slightly different but will be done for the M&O request. The full-time positions within project management and engineering are 5. That does not mean those are the only people who do work for project management and engineering. Most of our PM&E contracts also provide project management for our capital programs.

Any questions on the department summary?

Questions from members? Okay. Onto the reconciliation page, the '26 revised budget at $956,000 with a $50,000 adjustment takes us to the $1.01 million with the $50,000 change. So there again are no changes happening within PM&E except for the negotiated or merit increase for non-rep steps.

Questions there? No. Okay, on to the PM&E capital list. This is the portion that we did not get to in the last presentation. These are the road and other projects that are part of PM&E's workflow.

On the two pages combined, we get to 43 $8.5 million of bond-related project requests, $19.9 million of state-related project requests, and $600,000 of other funding in the Subversa annual program, which I'm assuming is from Subversa. And that lands us at a total of $64 million for PM&E in 2027 proposed capital projects. And let's talk about these roads. Mr. Coley and Mr. Dohler are here to guide us through this, as well as some of our other capital project partners if there are questions that somehow interact with us. Okay, I have myself in the queue and then I think Miss Baldwin Day, and then other members as well.

So mine is big picture. First, to confirm, AMATS, the number that's listed on the bond is not the total amount for of the project, that would be our matching funds, is that correct? To the chair, that's correct. And the match depends on the ownership of the road, and so it can vary from 0 to 9.03%, but yeah, that's our match. So it's essentially 9 cents on the dollar.

OK, thank you. And then the other— this is again just big picture. I know we could dig into these projects, and I mean, others are welcome to do so. That's not my plan right now, but I do want to observe I guess most things are in the bond category, and then I'm seeing, for example, Eagle River projects are in, for the most part, in the state ask category. I'm not sure where Farm Road is.

I can tell Eliasca Creek, that must be Girdwood. And then there's one that says Rabbit Creek, so I'm assuming that's outside of ARSA as well. So I guess I'm just wondering, from the administration's perspective, the thought on prioritizing, because what it looks like is essentially we're prioritizing asks of state funding to areas that do not do bonding, or historically have not done bonding. So I guess I just want to put on the table, I think the question for all of us is, what are we prioritizing asking for state money for, knowing that there's a finite amount? There's maybe more than there would have been.

And specifically for Eagle River, I'm not trying to pick on Eagle River. I know one of the members is out of the room, the other one's here. But I think the question is, I know I've I've heard Eagle River does not bond. I don't know if Eagle River is able to bond. And I think it's a question at some point that we ask, how do we prioritize our state funding asks in a way that recognizes that there are multiple mechanisms that all of us can utilize?

And maybe not, because we know there's some road service areas that can't. But I think the question is, if we are always asking for state funding outside of the core of the municipality, that becomes harder and harder to square with the fact that we really have to prioritize our asks overall. And I realize that's an uncomfortable conversation. I'm not asking for the administration's kind of hot take on that, but I do want to raise that question as a thought. And also, so I guess I'll pull it back and just say, can you confirm, can SBIRSA bond?

So again, that is a political question. I know it's a different question. I'm not trying to run an amendment that makes them bond. Bond. But I would like to know, is that a capability unlike other road service areas that we have in our municipality?

To the chair, I don't know. I would need to ask. Oh, hey, look, a lawyer, Ben Bowman.

And I'll just— and okay, so Ben Bowman's coming up. I'm also—. I'll recognize—. I mean, this an awkward conversation, right? It is an uncomfortable conversation.

But I think as we have to prioritize limited money in the state, period, we have to start asking these questions that we have been unwilling to ask as a community for a long time.

Uh, Ben Bowman, Assistant Municipal Attorney, through the chair. Could you just repeat the question so I make sure I get the context right? Yeah, really specifically, it is: does SBIRSA currently have the legal authority to bond assuming they would go through the steps to authorize that themselves, or we'd have to vote on it, right? But are they, are they the same as a limited road service area that literally does not have capital powers?

And if that's a more difficult question to answer, we can do a follow-up. But I would just like to understand, is it different or the same as a limited road service area that does not have capital authority? At all. So through the chair, I would like to double-check and dig into it, but my initial response is that the service areas, the bonding of the municipality, is based upon the full faith and credit of the municipality. And so they— it would be incumbent upon them training up upon our full faith and credit because they're kind of subset of us.

So if the answer is not no, I will provide you a follow-up. Okay, and I recognize that either way that has not been utilized, at least in the recent past. And to the chair, I know that—. I know—. I think that they have bonded in the past, but we're looking into it.

I know that Eagle River Parks and Rec has. And so I believe that they do have the ability different than ELRSA. Thank you. And again, I am not trying—. Oh yeah, it all has to be approved by the municipality, meaning the sister vote.

But yeah, yeah. So, and again, I'm just, I'm bringing that up because I think it is a fair question to think about in our state requests. And I'm just noticing that as written right now, all of the things in the state column are not in ARDSA or not in a road service area that usually bonds. So, and that's—. I'll just leave that as a comment.

Uh, Mr. Johnson, I think the chair— there's an interesting question, certainly worth digging into, but I would say if we're going to, we should also maybe compare— and I don't have the answer, so I'm not presupposing here— but how many projects were projects that the muni advocated for versus what were projects that the legislature in their discretion decide to put in there, right? There's the things we asked for, but they are not beholden to, to our requests, and they may exercise their own discretion about how they want to allocate their funds. Then there's the additional layer of what projects were vetoed from the budget by the governor's office, just to say that this is not necessarily a perfect reflection of the muni's priorities. There's two other— there's another level of government with two branches that also weigh in on where the money goes. So I just would say that I think we're digging into that, be interesting to kind of look at the alignment between what have we put forward and what has been funded.

Through the chair to Member Johnson, that's exactly right. One of the challenges with everything we do here is that unless we are the end of the process, there are all kinds of other inputs that can change the flow of what we are doing. I think In terms of the bonding capacity question, I believe if we confirm that Suburba has that opportunity, the same situation I believe that happens with Girdwood would potentially happen, which is, you know, Girdwood and Chugiak State Park are different, but Girdwood got to the point where they said, we got to do something about this, we need to figure this out, let's try to bond for our road project. And because of the requirement that it has to be backed by the full faith and credit of the municipality as a service area, the way that the municipal voters in area-wide respond is that it feels like it's a cost they are going to have to pay, even though the language is explicit that it will only be part of the Girdwood service area levy. And so our outlying areas or service areas are less likely to be successful in those bond requests.

But part of that is also about educating all of our voters to make sure they understand that while we are saying, yeah, it's okay for Girdwood to do that, we support them, we are not paying for it across the rest of the municipality. And I think that that would be the same kind of conversation with anything for Chugiak State Park as well. Thanks. I also see Miss Fleek-Green has joined us if you wanted to make comment at this time or not.

Yes, through the chair, I just jumped up to add a little bit of context because I think your, your question is good. The context being last year when we went through this process, we cleaned out these columns because we were so unsuccessful over many years. And so in terms of true transparency, demonstrating that there was not money coming from the state or the federal government for many, many years of these project lists. Maybe next year is different. Certainly, the amount of funding that the governor and the legislature will have going into session is now different than when we drafted this, right?

We now have months of additional oil revenues at higher prices that we did not— we are not privy to when the war will end. So we don't know how long that funding will continue to accumulate. Yesterday, the governor said that it was $800 million. So I think to your point, we need— and to Member Johnson's point, we need to think about this also in the legislative committee in terms of what those state requests might be. And Mr. Handeland.

So I was wondering, so on Citation Road here, because that's out in Eagle River, why doesn't that one have the subversive project in front of it? Is that because that's a project solely done on a state road?

To the chair, I don't know the answer to that, Mr.— or through the chair, Mr. Handeland, I don't know the answer to that. It may have just been an omission, but I'll find out. Okay, and the other one was, so with the AMATS ones where this is what the municipality is putting up, is it because we are, I guess, sending that money over to AMATS? How come there's not, I guess, a federal I guess, dollar match of what they're matching on that with the spreadsheet? Through the chair, remember, handling it, I guess the short answer is because that money is already available.

It's essentially in hand. It's been committed by AMATS through the Metropolitan Transportation Plan and the TIP. So the money is available. So it's not programmed here because these are generally needs and those funds are already available.

And to the Chair, to Member Handeland, it's also limited to 2027 budget activity, right? This, this is limited to the 2027 budget activity. So as Mr. Cole Hayes is saying, if the revenue was acquired or set in a previous year, it doesn't— it's not reflected here. This is not a total project cost description. So we can look into the Citation Road specifically to see if there is any other funding source that goes along with that.

If there is not a funding source in '27, you wouldn't see anything show up there, but you would see it show up on the capital project detail in the capital program, which is the multi-year program. So you see the places throughout the 5-year program where that project would be getting extra funding or has already received funding. The The point that Ms. Fleek-Green made about the columns and the state funding.

In the nature of the way that this page looks is an opportunity to say that this is different than last year's budget, than the year before's budget, than the year before's budget. And I say that because the municipality in a continuation budget process and a continuation operations process has a tendency to move what we have here to the next year and just continue forward down that path. The traditional pattern at the municipality was that there were millions of dollars coming in capital budgets for a lot of these projects, specifically road projects, on a regular annual basis. And the process within the municipal budget was what we are doing right now. We would have the full list.

It's kitted out with the total dollar amount that we need for all the bonds, all the road projects we want to do this year. Figure out what is going to go in the municipal budget, and then once we decide what we think we can bond for or what's an appropriate amount, we would move all of those projects out of the bond column into the state column, and those would go to the legislature as the request. So it was, we need all of these projects to happen, which ones can we pay for, which ones will the state pay for, and then which ones can we make the rest of the money work around on. We continued that process until 2 years ago. So the capital budgets represented numbers and dollar amounts that were never being realized and seemed, frankly, totally inaccurate and misleading.

Because people look at these budgets as if that is the money that is there and will be spent on these projects. But the way these capital budgets are built in the proposed-approved process, is that they are requests because we have not asked the voters for some of these changes. We do not have final action from the Assembly. And so clarifying that language in our budget books going forward is part of this sort of iterative process. Last year, the goal was to get rid of the pretend state funding that was reflected in our budget so that people didn't think that was coming through.

And what we have not done here and what we will likely not do is if any of these projects are not approved, we won't automatically move them into a state column. We can, but we won't assume that the funding is going to come from there. So it becomes a recalculation on the municipal side to figure out, okay, if we don't, we don't get that, right, then what are we going to do about that road that is in this condition? I guess we can do this with it, we can do that with it. Nothing we can do with any sort of, uh, project that is removed.

Okay, and so like, so the state column here is ones that have, I guess, been gone through the budget process from the pre— from, from last year, and we are now kind of incorporated it into, into ours here? Correct. If, if there is, if there is, um, in, in the proposed budget, if there is a number in the state column That is either a request that we know is going to be coming through or that we intend to make and would hope would come through. But when we get to the revised process, we will set all of those, and that would be the budget for '27.

Okay. Okay, other questions, Ms. Baldwin Day? I have a handful of questions. The first is, how did we arrive at this particular list for the proposed capital budget for PM&E. I mean, how were these projects specifically prioritized over other projects that perhaps existed in the 2026 CIB and are not here?

Through the chair, Member Baldwin Day, there's a relatively lengthy process that the municipality and the department goes through, and I do have Chelsea Ward-Waller here who can help to speak to this if I get some of it wrong or don't have all the facts.

Generally, every year, the PM&E Department works with Maintenance and Operations. We receive information from Street Maintenance. We receive information and requests from citizens. We use the Community Council surveys, and then every year there's a team that's assembled of municipal staff. They get together, they go through all the projects normally every year.

They score the projects. They rank the projects based on a set of criteria that include safety, imminent failure, value to the community, things like that. There's a whole list. I don't have the criteria memorized. And they— we use that to rank and score the projects.

And then that list is submitted pretty much in its entirety, not the entire list. We shave it down some because we know that a bond package for $200 million won't go anywhere. So we shave it down. That's submitted as the— as part of the the department's proposed budget to the administration, and then the administration looks at that list, they ask questions, they get clarification, and then make the final determination as to what ends up on the CIP list that goes to the assembly in early October.

So how—. I'd be interested to understand what exactly the criteria are 'Cause there are a handful of projects that I'm actually quite surprised to see not included in this $27 million budget. If in fact the, what you've just outlined is sort of a litmus test or the threshold. So I personally like to understand more thoroughly what that rubric really, what that rubric includes.

Zai, I am a little concerned that in, you know, as you've said, a resource-constrained environment, it's really important that we address projects that have a, like, a really significant impact on both a neighborhood and also addressing, like, the failure of, say, some of our existing stormwater systems. And so, Yeah, I would like to understand that more fully. I'm also curious to understand why we have so many CASA projects coming forward on this particular bond, understanding that our human capacity at PM&E is rather limited. You know, how do we take into consideration real ability of PM&E to deliver on projects as they're bonded for when we know that we have this existing backlog of like really significant projects that need— that really need and deserve our attention. And how do we weigh, I guess, in the balance, the humans that we can pay for?

And I know that we can incorporate those into the bond itself, but That feels like an interesting policy choice to me to bring forward the volume of CASA projects on this bond when we have a significant number of higher acuity, I would say, interventions that are actually needed on our streets and in our drainage system. To the Chair, to Member Baldwin Day, and Mr. Colhays can fill in all the parts here, but I think one of the things to understand is that Mr. Colhays and The Public Works departments and other departments have their capital process, and then that list is forwarded to the budget and the budget office and the mayor, and the administration goes through the deliberative process to determine what gets proposed in the budget. We include the full capital list in the 120-day memo, so that is the first glance at what is there. That is not necessarily traditional. The 120-day memo had historically included the intent or the mayor's administration and their proposed potential bond packages.

But at the request of the assembly, and frankly, just the need, the administration changed that within the 120-day memo in 2025, specifically to say this is all of the department requests and not to high-grade it in that 120-day detail so that The conversation of what is proposed from the departments that could be performed or is the next step in line is something that we can all deliberate over. Some of the choices that get made when we go through this process include, is this a project that is in design? Is it in construction? Where are we at? Because one of the considerations we have to make is because of constrained capacity, We can't have all construction happening one year, and we can't have all design happening one year.

So, we calibrate the projects that are moving forward in the sense of we have a certain amount in design, we have a certain amount moving forward in sort of pre-planning, and then in construction, so that we can control how all of this is spread across, or try to, I guess, in some fashion. The other thing that we look at is whether or not the projects have match money identified, or if the project is already in motion, and do we need to complete it? Is there any sort of gate or deadline that if the municipality doesn't keep it going forward, what are the impacts of that? For the most part, when we receive the list from PM&E that is, these are all the road projects that, you know, we think X, Y, and Z, The, the bulk of the cost goes to annual program buckets that we don't have maintenance funding in. And so when we bond for signals and signage and the maintenance associated with signals and signage, because we don't have a maintenance allocation in our budget for those things, we have taken up this much room in the bond package already.

And so a lot of the major road projects don't make it because we don't have enough money for our annual maintenance costs of the things we already have. We can't build new yet. So the question goes to you to say, do we want to add this road? Do we want to add that road? We have to add this road.

It's part of the package already. It's why this is the conversation it is. It's not just the administration's opinion on what the highest demand is, but this is what the departments know.

And then I think I'd like to understand— I mean, I think I've asked this question in different ways, not just in this budget process, but also in last year's. How many people do we actually need in PM&E? To be able to sustain the volume of design/redesign that is really like, right, I mean, we are here, we are at the point of like system failure in a variety of ways. How many additional human beings do we need to actually meet the moment? To the Chair, I, through the Chair, I don't know the answer to that question.

I don't know if Mr. Coley does, but I do know that we are looking at those kinds of questions specifically to figure out if we are going to change our operations, how can we change them? What makes sense for us to change, and how much does that cost? Because there are some questions on the patterns of what we have been doing over the last 10, 15, 20, 30 years, and, and we are able to see the behavior in those patterns now and, and do the analysis and interrogation to change them. So I think that there will be a lot of content for the discussion between now and revised. Yeah, I'm really, really interested to understand what that looks like, because I think we need to be, number one, honest with ourselves, but I think we also need to be honest with the public, who is, you know, looking around at our infrastructure crumbling in real time and wondering, what are we doing about it?

And when I get those questions, I don't have a great answer. And so I think understanding dollars and cents and in human beings what that really means is really important and really useful. So thank you. Okay, other questions? Okay, I don't see any right now.

I will note that sounds like another great topic for the Transportation and Infrastructure Committee to dive into because I think it is something that keeps coming up. So I'm not being flippant there. I think it's worth talking about. My only really quick timing question on this is, can you remind everybody, especially the three members who have not gone through our budget process yet, what is the timeline for deciding what goes goes on the bond, and then how does that relate to the budget process? And if somebody wanted to make a change to this list in any way, what should they do?

The timeline for the bond is we go through this budget process through our proposed and approved, and we land in the middle of November with an approved budget that would include the projects that could or should or are supposed to move forward to a bond proposal. Then the administration takes takes them and packages them into an appropriate bond proposal and ballot questions. And those assembly documents come back before the body. They should be with you in December or January, depending on what we can do. And then the body has to approve any activity for the ballot in April by the last meeting in January.

Traditionally, We do not change the capital budget between the approved budget and the bond approval in January, but it is possible, of course, for the assembly to take action and approve any of their— or amend any of their prior approvals or activity if there is a reason that the capital budget needs to be amended in order for the bond to be effective. So I think that is our traditional process.

Note to close that conversation, um, one of the templates we do have is to amend the CIB, so that is possible. Amendments to that also change the CIP, so Molly can— Miss Rocher can discuss that further with folks, but that is part of the process. And then I would say if you attempt to bring a floor amendment on January 27th or whatever our meeting is, it is much less likely to pass because it takes time to calculate the O&M, and there's more steps to it. It's not just a text edit to code. So that's why I think the earlier you do it, the better.

You can do it later. It is possible. It doesn't mean you should do it later. And, and to the chair, because the bond proposals are legal documents, changing them in the moment can be very challenging, and it's a much better idea for us to be able to understand what the goal is and prepare in es— or at least understand whether or not it is legal before we do any of that on the floor. Yeah, and I'd say the not understanding of that for other reasons led to having to do a special parks election that was at the same time because there was deadlines missed.

Anyway, different story, but just to remind folks, like, the earlier the better. And those are not the same as amending code in real time. Mr. Colhays. Thank you, Madam Chair. If I may, if members have questions about projects that are, that are on the— that were on the 120-day memo that didn't make the cut, we can provide technical information on those.

If members have questions about a project they may want to add, I provided some information to Mr. Vohland, Member Vohland, today. We're glad to do that. And also, if I may, I would just comment briefly on, on Member Baldwin Day question about staffing in the current, the current year and the, the, the very short future every year. Uh, PM&A, Ms. Kohlhaas could not be here. She's on leave this week, but she has a model that we've developed over a number of years that we use to determine what, what workload a project manager can carry.

So we, we look at the suite of projects in front of us, we look at the staffing, and we balance those. Years ago, when we were receiving $50 or $60 million a year in state grants, we probably had double the amount of people we had in PM&E— we have in PM&E now. We have reduced that number only through attrition. We try— we really don't want to ever end up laying anybody off, so we've reduced it through attrition, and we're very cautious about staffing up. But there's always the ability to staff up If, um, you know, if, if the, if the state came through with another $50 million, we could staff up to accommodate that.

The other tool we have available to us is we have two project management contractors who have very flexible ability to assist us in managing projects. So we do have some flexibility, um, and we try to manage our staffing so that we can accommodate the workload, accomplish the workload, but not be overstaffed or understaffed.

OK, thanks. So let us move to the next department. So we'll bring up Traffic Engineering, I believe, and, and then also know we got a number of directors in the back, so I know these were really big topics that we've gotten through. I think we'll pick up a little bit of speed, but we'll continue through with the departments on our list. So I think we will indeed, but we're still going to live with Mr. Colhays because he's going to take Traffic Engineering as well as Director Colhays is not available.

So, uh, We move into the Traffic Engineering Department summary with a 2027 proposed direct cost budget of $7.9 million. IGCs and program-generated revenue take us to $7.8 million, and then we get down to the all-in direct cost total of $7.9 million for the 32 positions within Traffic Engineering. Any questions on the department summary? Okay, the reconciliation takes us from the '26 revised budget of $7.5 million. Debt service changes and salaries and benefits adjustments get us to the continuation level of $7.9 million, and voter-approved bond O&M and a transfer of 2 part-time Peyton Syntek positions to bond funding leave us at $7.9 million.

And 29 full-time and 3 seasonal or temporary employees within traffic. Any questions there? Questions from members?

Okay, I think that is it. All right, traffic engineering is over. Mr. Collias, are we—. Are you released now? I think so.

OK, yeah, next we'll bring up—. I shouldn't have said it out loud.

OK, go ahead, Ms. Baldwin Day. Yeah, this was— this is more of a macro question. So, so I would love to understand how the division of labor in traffic engineering is lining up with our Vision Zero priorities.

Through the chair, I would say that the existing staff in traffic is very focused on Vision Vision Zero. Uh, Mr. Donovan Camp is the— he's the bike and ped program manager. He manages traffic calming program. The challenge that traffic engineering has had, frankly, is filling the traffic— uh, the Vision Zero position. That position has been advertised for at least a year, perhaps longer, and they have yet— has yet been unable to procure a candidate who meets the qualifications and has accepted the job.

They've had some strong candidates who then ultimately have turned the job down. It's just been challenging to fill up. We're working with HR on some additional recruitment strategies, things like that, but it's been a very difficult position to fill.

Do we know why strong candidates have declined the position? Predominantly, it has been where we've had strong candidates, they've been out-of-state candidates and As the offers are extended and discussions continue, we've had people in both the— for both the traffic job and for PM&E jobs turn down the positions, just I think because of logistics of moving to Alaska. Do we have any flexibility in being able to offer relocation assistance to those folks?

In my experience in the past, we have occasionally offered small stipends, typically on the order of perhaps $5,000 or so. I don't know if we've attempted to do that in this case. My impression is that it's been more lifestyle and moving away from familiar grounds as opposed to the cost of moving. Thank you, that's helpful. I'm just trying to problem solve.

Thank you very much. We are as well. Thank you. Okay, thanks. We can move on to Parks and Rec.

Okay. And then I'll note just for timing, so it is 2:52. We have the ability to go a few minutes past 4, but I know these are very long days, and I know there's a number of department directors sitting back there. I'm guessing we're probably 15 minutes behind, so anybody who's sitting here now and needs to run back and come back in the future, that would be okay. And then just reminding everybody, myself included, because I ask a lot of questions, that we have finite time.

So, but I think I'm going to say our goal is to get through all of this content if at all possible.

Okay. While Ms. Rocha is passing those out, I will do a little explanation here before we get into the Parks and Rec budget. One of the things that we have been talking about is position alignment and operational changes and all of those things. The budget is a deadline-based document, which means that if something is not ready when the deadline hits, it is not included. Part of that is that the Parks and Rec budget was still being maneuvered and understood into some—.

Into how we wanted to make some changes for the '27 proposal. So your budget book and the current online documents have a reconciliation page for Parks and Rec That is not the page we are going to discuss today because we want to discuss the information that the administration would include in an S version of the budget instead of springing that on you 5 days or a week before. We have the changes here, and so the document that you were just handed is the new reconciliation page. Director Gamble and Parks and Rec can explain what those changes are and what it means, but we would expect that The S version of the budget would include these changes as opposed to the current Parks and Rec recon in the budget book. So as we start with Parks and Rec, we have a 2027 proposed direct cost total of $30.7 million.

IGCs and program-generated revenue take us to a net cost of $34— almost $34 million. Salaries and benefits and other contractual adjustments take us to $30.7 million of a total direct cost at 335 positions within Parks and Rec. One of the things that Director Gamble has been doing over the last few years and that the department has done, I think, since I don't know, '21 maybe, is the process of converting many of our part-time positions or seasonal positions that are vacant or unfillable into full-time positions that then can be filled and work can be done. So that's part of the Parks and Rec adjustment that you'll see in front of you today is continuing to sort of cull through those vacancies positions and determine how to use them operationally to actually benefit the service provision. Any questions on the summary page?

Ms. Scout. Yeah, I think one thing I've been really— maybe this is just more of an observation, but reflecting on a lot is how central parks and recreation and trails in our city are to our identity and our reasons for people living here, and how much this department is doing with such a small percentage of the budget. I think it's—. What is it?

It's like 3.5%, is that right? Yeah, um, so really just want to shout out Parks and Rec and thank you for your work, and, um, put it out there that I'm really eager to find ways to grow this into the future because it's such a huge part of why so many of us live and stay here.

Okay, moving into the reconciliation page, the revised budget direct cost starts us at $27.3 million. We then go through our continuation changes for voter-approved bond O&M and increase labor to support director transition, etc., and land at $28.3 million for a continuation budget. As we move into the 2027 proposed budget changes, you'll see the $2 million number at the bottom there, and that is the bulk of the cost change for Parks and Rec for '27. It is, it comes with revenue, right? This is the Healthy Spaces program taking the newly implemented surcharge revenue into the Parks and Rec Department.

So it is a $2 million increase with a $2 million revenue. So it essentially balances itself out to fund the Healthy Spaces positions that they have now implemented or working on finishing to implement, etc., but in various states. The continued proposed budget changes include some position transitions between Youth Employment and Parks, the Healthy Spaces Program, as I mentioned, and additional changes within Eagle River Chugach State Park. Director Gamble can go through detail on those if you have questions. And as this page says at the bottom, the reconciliation represents the actual position counts But the position counts may include positions that are budgeted in multiple fund centers, so they may show up more than once in the budget, which is why we look at both position number and full-time equivalent number in terms of employees.

Any questions for Parks and Rec? There is one. Before we do that, though, I just want to note, so in last year— well, this year's budget that we did last year, myself and former member Constant ran an amendment that was actually with full support in from the Parks Direct Department to basically remove a bunch of seasonal positions and convert that equivalent dollar amount into full-time positions. And it looks like there's more of that. So I just want to ask Director Gamble to speak to that.

You know, how is that working? What was already done? And then can you just kind of characterize what's in here? Because that's what it looks like. It's more of that.

Yeah, thank you. Yes. So I think overall it's working really well. And yes, this is a repeat, but I think we have come to like the end. We're scraping the last of the barrel, right, to do this change.

One of the things that we did focus on is that there was 14 Healthy Spaces summer seasonal positions, and over the last couple years we've only been able to fill 5 of them. So we were able to condense that and create 5 new full-time positions, which, you know, again, why should we have these vacant seasonals when we can have year-round? So that's one of the big major ones. Same with the park maintenance. Again, this is just doing the same thing, taking our seasonal positions and creating more to hopefully provide a little bit better service and have more skilled labor because we're able to train them, keep them on, and they're year-round.

And I should say that I forgot to mention the most important part in my world, that Director Gamble goes through the effort of working through this to figure out how to do this at a net-zero change. So she's making the adjustments within the budget that they have This is the position movement. The reason that number, as I said, looks large is because of that Healthy Spaces surcharge coming into the Parks and Rec operations. Yeah, last year's amendment was also net zero. So, Miss Baldwin Day.

Thank you. I'm curious about what, what is included when we, when we, when I'm looking at like the, for example, on PR 12. Anchorage Bowl Parks Operation. What is included in contractual and other services for parks operations? Is that, is that human beings?

Is that, is that utilities? Like, what is being, what's, what's being paid for in that line item?

$3 Million. Yeah, through the chair. So it's kind of all the above. So that includes the utilities that we pay for all of our facilities, the lights in the parks, our pool utilities. So that's, you know, pool utilities are a little about $1 million.

It also includes, you know, Rinnekan services. So that's a multimillion dollar service. So yeah, it's all of that in that. Line item.

So, so Parks pays for their own utilities. That isn't something that happens through M&L, correct? Okay. And I think to the chair—. Through the chair to Member Baldwin Day, this is a wonderful challenge with Parks and Rec world.

Parks and Rec is funded by both area-wide money and the Parks and Rec service area money, which is not area-wide. So it can only be used in a very limited way within the Parks and Rec service area, not area-wide. So the way that this sort of gets distributed is part of all of that challenge. I think there's probably only 4 or 5 tax districts that are outside of the Parks and Rec service area, so it's the challenge. Got it.

Okay, so I'd like to have a future conversation about how do we fix that.

And I think then my, my follow-up to that is, how, how much, or what is— are there, are there cost savings to pulling some of the contractual labor into Parks and Rec operations, or are we actually saving dollars by having some contracted services.

Through the chair, I think that the contractual services that we have, those are true contractual services. I mean, like I said, it's our utilities. It's not really a service for somebody that's doing snowplow or, you know, something along those lines. It's a true service need. Gotcha.

Okay, thank you. That's really helpful. Also, I was curious, was as I was looking at the position breakdown, Do we— I know Parks has been doing snow removal as well. Where does that fall in? Are those part-time employees that are doing that work, or are those full-time employees that do different things summer/winter, or is the answer all of the above?

Through the chair, it's all the above. So we do have our full-time staff that works all year round, and then we do bring on seasonals in the winter.

So maybe more position consolidations in the future. We hope, maybe. Tell me more about that shrug. Like I said before, we are, we've, I think, scraped the barrel dry. Our seasonal positions are only budgeted as a 0.3, so it takes roughly 6 of those seasonal positions to create 1 full-time position, which you can guess, like, that impact's pretty huge.

And so we've done as much as we can to this point without affecting other services. Got it. Okay, thank you. Okay, other questions?

Okay, don't see any right now. Oh, go ahead. Commentary on that contractual services other line. The vast majority of it, just poking through their budget now, is other rather than contractual services in terms of, like, human beings performing services. So that's their fleet equipment, their gasoline, their rent-a-can toilets.

It's a lot of other things that— and the contractual services that are looking like human beings is a much, much smaller piece of that overall puzzle. Interesting. So you also maintain your own fleet? No. Yes.

We pay for it. No. Sort of. Okay. Through the chair, that is a fleet IGC.

So Hey, we're getting it. Hey. All right, thank you.

Okay, I don't see any other questions, so thanks for being here. And I know— I'll just note we did talk about the parks capital budget last week, so folks can do a callback to that if they're interested. Next, I believe we're calling up the library department.

Oh, we missed the timeout.

Technical issue.

Okay, the library, we have Director Harrison here to answer any questions, but we have—. Oh, nope. Am I keeping going? I think let the record reflect our former budget analyst used to work at the library, so I don't know if the system is— didn't get retribution, but we're happy to have her. We still love the library.

Yeah, thanks. So, yeah. And for the record, we're just getting the— the screen keeps wanting to turn off, so we're making sure the TV screen is on.

The library department summary. The 2027 proposed direct cost is $11.1 million, with IGCs and program-generated revenue taking us to a net cost total of $17.8 million. The department has 94 employees, including 26 part-time. The change between '26 and '27 is a 1% adjustment. Any questions on the library summary.

Okay, in the library, we are making the salaries and benefits adjustments in the continuation process and transferring one full-time professional librarian from the alcohol tax. As a result of the alcohol tax revenue adjustments, this position needed to be accommodated in a different way or through a different fund source or be cut. This position is filled. This position does good work. The library wanted to retain this position, as did the administration, so we moved it into the library budget as an operating cost.

That is ideally what would happen with positions that are listed within the alcohol tax. The goal is to fund them, ensure that they are what the community needs or are useful in the operational demand, and ideally then move them into the general government budget so that they are not part of an outside funding stream. But we are not able to do that for the most part. When it came down to the MCT and some of the APD operations, we have moved them into the operating budget in the past, and the library is now in that lucky column of existence. The library changes are $478,000 over last year, and Director Harrison can answer any questions for you.

Okay, questions from members.

I will ask one that we are inevitably going to get emails about, and that is, was there contemplation of, or is there a possibility to increase the funding for Hoopla? I've had emails about that for 3 years, so I'm just bringing it up now. It is one of the online, maybe Director Harrison can explain what it is. Very well-loved program. To the chair, digital collections, yes.

Hoopla specifically, we're trying to balance the way the subscription works, which is pay-per-use, and keep so that we are able to budget a certain amount and then stay within that. And so that is why we had to put some limitations in the system this year. And so But in doing that, so our other digital platform is a little different, and you can add titles to the collection and so on. And so, so, so we're playing with both of them. So we would like to be able to maintain both within our budget.

And so, because we don't see Hoopla going away, we want to try to keep it, keep it going, and how we can manage two two platforms that kind of have different— when you speak to people, some of them like one and then some of them prefer the other. And so trying to maintain that. Thanks. Yeah, I'm just previewing that at some point we may get an email about that because we have pretty much every year a very well-loved program, but it creates budget challenges. My other question is, just given that we are opening a new downtown library, that is great.

Were there budget changes here reflecting that? Was there an increase to the budget, general government budget, to pay for operation of that library? To the chair, no. The downtown library budget is coming from a completely different source. Thank you.

Yeah, so I know we may get questions about that. That's the answer. Thank you. Any other questions?

Okay, well, thank you for being here. Oh, okay. On to transit. Director Rudolph, you want to join us?

Okay, we can start. Public Transportation Department summary for 2027 proposed. We have a $35.7 million direct cost total, net cost of $36.1 million, and 186 full-time employees within transit.

Look at the bottom of that column right there. 26-27 Change. What does that say?

Nothing. No change.

Once we get through here, we get the 2026 revised budget direct cost of $35.4 million. Include the debt service adjustments and salaries and benefits, and we land at $35.7 million. With, again, 186 employees.

Questions for transit? Questions for members?

How are we doing? I seem to remember that there was some staffing challenges at public transit. I'm wondering how we're doing on filling vacant positions.

Through the chair, that depends on the week. Right now we are at 7 driver vacancies. So it hovers around that for the past few months. We do have some things in the works to help recruitment, such as an in-house CDL training program that we are working through classification right now. So soon we'll be able to hire drivers that do not have their CDL.

We'll train them in-house and then graduate them from our own training program. So that will help with recruitment.

And I don't want to spoil it, but if you peek ahead at slide 68, you can see the trend line.

68. Okay. Then the other— my other question is related to anchor rides, and I was expecting to see a somewhat different operating budget Based on the fact that we had had some conversations about potentially the Anchorage contract being renegotiated and seeing a really significant increase, I'm wondering what the status is there. I could start with the budget portion of that, which is, as part of the '26 budget process, we had identified that the contractual increase between '26 and '27 was something that we could not accommodate in the '26 proposed and approved budget. So we identified what that gap was, and in the carryforward of the year, we specifically took lapse revenue from transit during first quarter budget revisions to fund the '26 cost of AnchorRides.

At current, that same situation exists. So the AnchorRides contract is, I believe, $1.2 million. $5 Or $6 million more for 2027, and that increase is not currently accommodated in this budget. So that, and I believe one other contract of a much lower dollar amount, I think in the $200,000 range, are in that same situation where we have not included the increase in contractual requirements, but we are keeping them on the list of things that we have to correct for in revised. And that means either adjust the contract or fund the contract.

Got it. Okay.

What—. I know there was some discussion at some point about doing a feasibility study to understand if or how we might save some dollars if we were to bring anchor rides in-house. Is that ongoing? Is that still up for discussion? What's the status there?

Yeah, so we're pretty much in the final draft stage, and the initial numbers are it is cheaper to contract it out at this stage. What we are looking at now is when do those numbers converge where it does become cheaper for us to do it. There's also other ways to look at it. Well, We'll also look at what happens if we do the management of anchor rides and we contract out the drivers. So there's more stages to look at how that will play out.

But for the next couple of years, it's cost effective to do the contractor even though it is rising every single year. Got it. So at some point we will see a convergence and we'll just need to be planning for that moment to decide what do we do now. Perhaps. Perhaps.

Maybe. Okay. Thank you very much, Director Rudolph. And I will add that public transportation is another one of the departments that has had a, a sort of drastic change in overtime use and consumption over the last few years, specifically because of the vacancies that they experienced during the pandemic and post-pandemic. But the overtime analysis that we are doing is also extended to the public transportation department, and we're looking at whether or not there are any adjustments that could be made to position counts that would decrease overtime use and improve general operations.

You may see that come—. That any adjustments there come forward as part of the revised process as well. And we are also currently working through our negotiations process with the Teamsters, and so that will make an adjustment to our 2027 revised budget as well.

Mr. Handeland. Yeah, so on this, the roughly $4 million in program-generated revenue, I guess what percentage of that is fees from riders?

Almost all of it. We get a few hundred thousand dollars from ad revenue, ad sales on the side of the buses, but the rest is all fare revenue. To the Chair, or through the Chair to Member Handeland. I believe the last time I looked at it, it was 3.3 is farebox, somewhere around there. And there's a, in the front section of the budget book, there is a whole revenues subcategory, and the farebox revenues are listed in there, as well as I think the other advertising amount that is in that line.

Yeah. And then the portion of charges by two government things, I guess, can you kind of break down a little bit of what's all in there? In the IGCs? Yeah. I would need to look at that, and we can get you the information specifically on how that's categorized, but I believe the answer is, for the most part, a lot of it is internal service department support for those 186 employees, so the HR charges, the payroll charges, etc.

All part of that cost. And then is there anything, I guess, from other departments to transportation? Because I know there's like employees ride for free, and so is that—. There absolutely could be. And so we getting the breakdown will tell us what goes in and what goes out.

Okay, thanks. And then, um, for Anchorage rides and stuff, I was trying to quickly look through here on the detailed one of Is there a breakdown of that as well? How much is, is for AnchorRides versus regular service? It's not included specifically in the budget, but Mr. Rudolph maybe can tell us, or we can get that information to you, what the AnchorRides total contract is.

Yeah, the AnchorRides total contract is included in the PTD Planning Marketing Rideshare budget line item in the $7.5 million, but the contract itself is, I want to say, right around $6.5 to $7 million of that.

Okay, and then the other question is, so this is an area-wide service that, I mean, everyone, everyone's paying into, but then how come it only includes the Anchorage Bowl for anchor rides?

We give money to the Chugiak State Park Senior Center to provide rides out in that area.

Okay, any additional questions? Okay, uh, Ms. Scout. Thanks. Um, I think just another bigger picture question.

Thinking about some of these vacancies that we have, like with bus drivers, and then also these very small, like 0.3 FTE positions we have with seasonal positions at Parks and Rec that I understand are also people who are driving big things around. Do we, do we have a process for cross-departmental collaboration around like making positions that are like, okay, you spend a few months of the year working for Parks and Rec, and then during a busier season at PeopleMover, move over to that position. Like, are there any jobs like that or conversations about collab— like, yeah, more cross-departmental positions happening? Through the chair to Member Scout, cross-departmental positions, no. And I think the simplest answer to that is partially the service area challenge and the way things are funded.

But it's also that those—. The demand for service delivery within our departments is such that I don't know that we would have positions that could be small over here and small over here. We're—. We The continuity of the job, I think, is something that is the reason we're transitioning so many of those partials. That doesn't mean that cross-training shouldn't occur, right?

That is a different opportunity. And Director Rudolph mentioned the potential CDL program. That is not just CDLs for transit drivers, right? We could do it for other municipal departments that also require CDLs so that there is a recruitment and retention onboarding process process for the sort of pathway to getting someone who does not have a CDL into the door and training them through the process to then stay and work at the municipality. And that is part of what we looked at when we came in in 2024 because of the demand specifically for drivers within transit, but also equipment operators at maintenance and, and sort of the lack of CDL, uh, uh, drivers that we had.

It is very attributable to the lack of wages that were assigned to most of those positions, but we have done a good job at changing that post-pandemic inflation. And now it is about what positions do we need in the departments we have, and maybe someday we can get to a place where you can work in all four departments.

Uh, Miss Baldwin Day, this is not a right now question, but I think it would be really interesting to know what it costs us in terms of HR time and labor to like bring on seasonal employees and then let them go and then bring them on and then let them go and then bring them on and let them go like that. I would love to know what that actually costs us. Through the chair to Member Baldwin Day, I don't know exactly how much it costs, but I can tell you it's more expensive. Than if they stay.

Uh, Mr. Handeland, just kind of a follow-up to, um, Scout's, uh, question there on multiple jobs. I, I know Bill Falsey has kind of gotten two jobs. Do we want to add bus driver, pick up trash for Parks and Rec? I'm looking for maybe snowplow operator. I can do some real damage.

All right, well, I think, yeah, we're angling for second jobs here. So, okay, yeah, uh, no, I should be clear, not assembly members, but, uh, yeah, uh, okay, so let's move on. And then I'll also note, I know on our schedule we had a short break. I think given our timing, we need to push forward. So I know it's a long day either way.

If you do need to step out for a few minutes, please feel free to do so. We are switching topics to, uh, housing and development, the other part of building our future. And I know we have a few departments under there, starting with Mr. Dole. So I'll turn it back to Ms. Ona Brause and Mr. Dole.

We have Director Bob Dole with us, and we can walk through the Economic and Community Development Department summary quickly. We have a 2027 proposed direct cost of 2.3 with an adjustment of $2.3 total at the end, $1.4 in salaries and benefits for the Department of Seven, and a very small budgeted program generated revenue. Do we have any questions on the summary page?

Okay. The reconciliation page takes us from the 26 revised budget budget. You will see the note that it was renamed from community development. That is part of our reorg process. The direct cost from '26 at $2.1 million with salaries and benefits adjustments as included at $51,000.

And the contractual increase for our ESRI GIS service is $120,000. And we landed a '27 proposed budget of 2.3.

Any questions on the reconciliation and/or operations? We can discuss.

I just have one brief one. I will disclose I'm a GIS nerd. I'm just curious, is that increase basically like an annual cost increase, or is it because we are utilizing more modules? Like, is utilization causing an increase, whether it's users looking at our maps or we're creating more maps? Chair Bob Doehl, all of the above.

The— we are better leveraging it to get more efficiencies across the departments. The other part is this is a mult— we do not renew our contract yearly, it's a multi-year, and every like 3 years they reset the price. Okay, thank you. Any other questions?

Okay, I think we can move on, and we know we're continuing the theme on development.

Uh, on to Development Services. I believe Mr. Dahl is going to stay here with us, uh, as Mr. Sule is not available today. Um, we have Development Services at a direct cost total of $13.7 million.

IGCs and program-generated revenue take us to $7.6 million, and an overall, uh, salaries and benefits allocation of about $13 million. Totaling 73 full-time employees in Development Services. Any questions on that page? The reconciliation for Development Services includes only the salaries and benefits adjustments for the continuation budget process and no additional changes within Development Services. I think that you should potentially see a small adjustment within Development Services within the S version of the budget.

We have been in conversation to include an additional permit tax specifically by reviewing and reprojecting some of the revenues within Development Services. And so that may be included as an S depending on how that lands, but we will let the assembly know as we move through our process.

Questions from members? Erin Baldwin Day. Thank you. My first question, looking at the position detail on DEV-8, how many of these positions are code abatement positions?

Through the chair, I'm looking that up. Those code abatement positions are located within the inspectors. I believe it's 4.

Um, so I was looking at the, um, I was looking at the data on DEV 12 and 13 and noticing the number of new service requests requests that code abatement is dealing with, the number that's resolved. I'm wondering, what's our average length of time to resolve a code abatement service request? And do we need additional resources in that particular piece of development services? Like, do we need another body to be doing that work? Through the Chair, the number— we can get you the average time.

It varies greatly. Code abatement looks everything from somebody doing work without a permit that resolves in typically less than a day to multi-year adventures like the Big Timber. So it is hard to— I can't give you a meaningful single number on resolution. And looking at the budget as a whole, I think across municipal government we could probably do better with more. In that area, particularly given that they also partner with Land Use Enforcement, who deals with non-building stuff, and we have new synergies across the departments.

I think we have the appropriate level. Okay, that's, that's good to hear. Um, I was hoping that we would maybe stay out of the realm of like 2025 and 2024 when we had lots of open service requests at the end of each quarter, and it looks like we're starting to trend back up. So I was curious about, about that. The other thing, which I think you've already addressed, was on DEV 11, and that was just looking at the average number of minutes for customer contact at the Permit Center.

And it sounds like we are contemplating hiring another permit tech back, which I think is fantastic. I was also curious if there is some part of that process that could be automated or that could sort of streamline things for folks who are coming to the Permit Center. It looks like Q2 '26, the average number of minutes for the first contact was almost an hour. And so if— is there something that's being contemplated apart from another permit tech to sort of ameliorate that situation? Through the chair, and looking at those numbers, it's important also to look at the number of customers served, I think is key, because as we've increased our housing production 50% over the last 2 years, we've also increased our number of customers those same people have to deal with.

Yesterday we had 116 people at the counter. Of that number, probably half these were owner, uh, permittees who had never dealt with the system before. Automation doesn't lend itself. There's going to be a labor-intensive hands-on experience to do right by these residents. That being said, we have a brand new permit management system coming out in the next year.

We are super excited about And it is going to lend its way to a better online experience. There will still be a quality control check that we envision you're going to have permit techs doing. There will be less having to do so much manually. Just having been involved in other system transitions across the years, my crystal ball isn't well enough tuned to figure out when we achieve appropriate level of public literacy with the program that we may be able to make downward adjustments there. But at the point we're seeing now where the numbers, uh, you can see the numbers there, uh, that they continue to climb, uh, we do need to make some immediate adjustments on the, um, on the Permit Tech count to keep that robust growth happening, particularly in the renovations.

That's key to meeting our 10,000 home target. If you had the Q3 number of minutes there it's 65. I saw the draft this morning. So, okay, great. And I think my last question is, is along similar lines.

I'm looking at DEB 17, measure number 4, on percent of first-time residential plan reviews completed with 4 business days. It just, it seems like there's this really predictable sort of bump in Q2, Q3 for residential plan review. I'm wondering if we've envisioned anything to sort of incentivize submission not in Q2 or Q3? Are there any things that we can do along those lines? And then I wanted to be sure I was reading properly that we have 13 plan reviewers now on staff.

Through the chair, that is mostly correct. I say mostly because plan review is not a Development Services only show. Zoning and land use review, for instance, is located in Planning. We have the fire marshal involved depending on the structure. We also touch people up in PM&E or traffic.

So but in the core vertical disciplines, that is correct. Okay, great. And then, yeah, what are— do we have options for encouraging folks to submit plans? I'm looking at Q1 2026 was 141 reviews and then Q2 was 777. So is there anything we can do to flatten the curve?

Through the Chair, we're looking at options, what would be available, kind of like if you think of Uber and Lyft, who they have surge pricing for busier hours, what we could do. That's something we have in and that we're looking at. Frankly, we believe with the new permit system and the ability to extract data from that, we'll be able to do it more rationally than we could now. Thank you. Okay, other questions?

I just have a very brief question. I know we're working on new permitting software. Is it—. Doesn't look like there's an increase reflected there, so I assume that's full. Whatever we need for that is accounted in this budget.

Is that correct?

Through the chair, that's correct, because we're also ending licensing under the legacy system. Thank you. Okay, I don't see any other questions, so I think we can move on to our next department.

And that would be planning. So we'll invite up the planning director to planning.

And we have Director Babb joining us. The planning department summary, the 2027 proposed direct cost is at 4.0. The charges, the IGCs and generated revenue takes us to 4.8. And overall, it's supporting 25 employees or positions within the Planning Department. Any questions on their summary?

Okay.

The reconciliation for Planning is $3.9 million from the 2026 revised budget, a $50,000 amendment reversal through the continuation process, salaries and benefits adjustments of $139,000, and zero proposed budget changes at this time. We believe that There may be some that come through the approved, through the approved process and potentially through the revised process. But right now, nothing. Any questions, members?

Okay, I don't see any right now, actually.

Okay, I think there's probably a number of questions about the planning budget.

I hope you were here all day. Sorry.

Moving on to real estate. Oh, well, this is the best real estate director I've ever seen. And let the record show that Miss Briggs is the most seasonally appropriately dressed. Thank you.

And also has the cutest assistant I've ever seen.

Director Briggs has joined us for real estate. We have a 2027 proposed cost of $9.2 million in real estate. The IGCs and program-generated revenue take that net cost down to $1 million because those IGCs are sending all of those lease costs to the departments that have to pay for them. The real estate department, you'll see, is 5 positions in the 2027 proposed, and that is because on the reconciliation page You will see that we removed the full-time policy and program director position. In the past, real estate and HLB has had two directors, an HLB director and a real estate director.

This was one of the positions that was discussed during last year's conversation about vacant and funded positions and whether or not they should be removed. We informed the assembly at the time that it was not being removed then because we were waiting for Director Dole to take position and determine whether or not that should be moved around, if it's useful to delete the position. Once we got into this budget cycle, it is one of the positions that we are accepting to delete. Ms. Briggs can speak to how that impacts the department operationally. But overall, we land with 4 positions in real estate and a $600,000 change from mostly all of the city hall debt that came on board from purchasing City Hall and CPI increases for some of our other leases.

Any questions for Director Briggs? Questions? Yes. Thank you.

Yeah, I'm really curious about this, the elimination of the program and policy director position. Do you have any sense of why that position was difficult to fill?

Great question.

We were kind of doing a lot of reorg between Director Dole coming on, so kind of really looking at this position. We actively were just recruiting for it it was so, you know, it's one that we feel we can still continue at our same level with it eliminating. How long had that position been vacant? So this was actually my previous position before I was the director. So I don't remember how long I've been director now.

3, Maybe 3 years. 3, Yeah. 4 Years. Okay, so we've been operating without this position in play. Correct, yes.

Great. Was the goal of this position to inform housing policy and to sort of think through on a strategic level how to make real estate moves? I'm wondering what the scope of work was and how has that scope of work been absorbed elsewhere, whether in your position or elsewhere? Sure. So, um, the scope of work was really, um, kind of the deputy director for the department, um, doing the leases for the real estate services side, um, and the foreclosure registry.

When that was brought on, that was kind of a new piece, um, that was added to this position. The foreclosure registry piece has been— is being handled by our foreclosure specialist. So that was kind of an easy transition for him to take on. The leases, I'm still just kind of overseeing those as they're coming due. We haven't had a lot of new leases per se, so just kind of, you know, managing what we have and making sure they're all in order.

Okay, great. Thank you. Other questions?

Okay, I don't see any. Thanks for being here.

And please also thank your assistant. Trick or treat. Yeah, yeah, yeah, the deputy director. Yeah, yeah, yeah, just not the position being cut. Okay, okay, I know we're almost close at the end of the day.

We got a number of more things to go through, so let's do ACDA, and then we will talk about kind of how to handle the last part. We are—. We have ACDA here. They were not included in the utilities and enterprise presentation we did last week, so we rescheduled them to today. So they are not a general government department.

I think we know that, but I just wanted to make that clear. We start the ACDA budget with a 2026 revised budget appropriation of 7.6 and move through the payroll and benefits adjust—. Payroll and benefit adjustments for the continuation process, which you see is zero because they are not part of our continuation budget process because they are not a general government department. The 2027 proposed budget changes you see listed here. And lands them at a 2027 proposed budget of 8.2 supporting 27 employees.

We also have the capital program here on the second page, and Mr. Robbins and Ms. Guzman can give us information on both of these pages if we have questions.

So go ahead. Okay, I'll ask Mr. Robbins if you want to add anything to that, or just we go to questions.

Okay, questions from members. Ms. Baldwin Day. Yeah, thank you, and thank you for being here. I'm wondering, how are we funding, or what mechanism are we using to fund the— assuming that things move forward as we expect with the closure on Block 102, how are we intending to fund those initial stages of sorting out what happens next? What's going to happen next with Block 102.

Through the chair to Member Baldwin Day, I think that might be a question better set for HLB and Real Estate since they will be the owners of Block 102. I could tell you from ACDA's perspective, we will be funding that out of any, any work that ACDA would do on that project would be funded from the proceeds of the sale of the 716 building, which is what we had we had promised the assembly we would do with that money would be to use it for future development.

And I would—. Did want to add one other thing, that we do have an open position if Mr. Falsey is looking for better work than transit.

My second question is with respect to the items that are on the proposed capital budget any bond-funded needs right now for the fireweed development, or do we have appropriate cash in hand for that?

To the chair, to Member Baldwin Day, if I heard your question correctly, you said, is there any bond-funded needs for the fireweed project? At this time, no.

Okay, any other questions?

Okay, not seeing any. I know there's a lot of topics we could cover, but outside of the budget scope. So thank you for being here. And as usual, just follow up with folks if you have questions. So that takes us through our Building Our Future.

I will note anybody who's looking at our slides can see there's a long number of departments. Minutes that are left, and we know we have about 15 minutes. So I guess I'm going to, one, suggest if there are— maybe we either have multiple departments up at once, and I know some folks have been sitting there for a while, so I apologize for the delay. I guess I'll just turn it to Ms. Brouse, how you would like to proceed or what you think we should prioritize. Through the Chair, I will be honest with you.

This whole section has a net change of $5 million. And this is the reason I said what I said earlier about the non-REP and exec increase. Increases because our internal services departments, many of our departments are very small, 2, 3, 5 people, and most of those people are non-reps and execs. So the adjustments within many of these departments do not include non-negotiated increases. Having said that, there's also very little change in these budgets generally because we don't have any latitude to change except to adjust either decreasing revenue or making the contractually required increases that we need to pay for to continue services.

I think the substantive changes may be something that the municipal manager can speak to as part of the reorg process and vacancy factor within all of our departments. The municipal attorney operations may be something that we want to talk through if finance is of interest, right? We could speed through a lot of these. Anybody want to go? I guess I'm— as I'm going through, yeah, the answer is probably gonna be no, is my guess.

But I know that's why I asked. But I think because part of the budget is reorganization, I think it's worth covering that topic. And then I'll say, I know there's the ACE Fund marijuana tax. We did have a work session on that, but it was the board's proposal. And so I think if we have time for that, this in the past with a legislative branch/Assembly budget, we can cover that at our amendments work session.

It eats into the time a little bit, but I think that's something we could carve off. So I guess that would be my proposal, is we cover the reorg, if there are questions for specific departments, and then we definitely cover the ACE Fund at least briefly. Okay, I see nods. Then we will start with the municipal manager department summary. And overall this— well, actually, we could just see municipal manager, okay, at least in his current one job that he has, in my current Yeah, we'll see what it looks like next year.

As, as Director Broussard said, most all of the pages that are about to follow are all just reorganization. So there's very little real movement here. There's mostly recombining the former pieces of the Chief Administrative Officer column back into the Municipal Manager column. I think in the interest of time, I'll leave it there unless there are other questions.

I guess, in general, if you could cover kind of which departments are moving out of the municipal manager and what the logic is for that, because I think, you know, we've had the chief administrative officer, and maybe just speak to the workload, I guess, associated with having all those departments. Yeah, I'll go the other way, and then I'll get to your question. So coming in from the chief administrative officer are most of the internal service functions. So I'm retaining purchasing, HR, and IT. I'm losing all of the finance column back to the finance column being a standalone.

I'm picking up parks and libraries and then shedding all of the public works, snowplowing roads, this functions. And in some ways, the new dividing line is in the main, Bob Doehl now has all of Tudor, Tudor-Elmore.

Okay, additional questions?

OK, yeah, I know we're getting toward the end of the day and then I'm— I know we don't have time to cover them. Can you briefly at least verbally describe their slides 61 through 68, which are a bunch of charts about vacancies? And I don't— we won't have time to deep dive, but just if you can explain what they are because we can take it up in another place potentially. Yeah, we'd be happy to talk about this at greater length in another setting. Again, in the interest of time, but we wanted to use this just as a place a marker.

When we first started here, we did a presentation on the former mayor's transition reports and described the then-current level of vacancies in the number of different departments. And I wanted to give some sense that we hadn't lost the thread of that and that we were continuing to track it and we are making progress. And so the short version of that is you will see that before COVID the municipality was as close to its full strength that it has been. During COVID and in the last few years, in the years that followed COVID, we were in a real downward decline and that we've been making steady progress towards getting back to full strength. The next slide just shows mathematically how that happens because you compare people who are coming in to people who are leaving.

And then the following slides shows departments by department. So this is the first one that summarizes everybody by an annual vacancy percentage. I will say there's a little bit of noise in this data. Because this data comes out of SAP, and so there are some unbudgeted positions. When you do ghosting, you can get some extra ones and zeros, but this is accurate to rough— to order of magnitude and to trend.

And then when you break it down, I want— I know that there's been acute interest in some of these departments. We have been making progress in the police department, not as much as we'd like, and that is largely because the quality of the candidate pool we are trying to— that we are seeing in the academies is resulting in less success rate than we would like. We are still actively working that issue and trying some new things like converting sworn positions to chief— to CSO positions. Maintenance and Operations, you'll see that their vacancy looks like it went up in '25, but that's because we created new positions that were brand new. And that— so that obviously would create initial vacancies, but we're now trending again in the right direction.

The Health Department is a real success story. Anchorage, for a whole variety of reasons, including I think a lot of credit goes to Director Kimberly Rash there. Then moving to Parks and Recreation, this is really the beginning fruits of the conversation we were having earlier in their budget about how they are taking some of these very low-paid, very hard-to-fill seasonal and part-time positions and saying, in lieu of having 6 part-timers, we'll take 1 full-timer, and it's starting to work. So we're seeing that trend reversed there. And then finally, the first time I was interviewed by the newspaper in 2024 in this gig was about the lack of bus drivers.

Um, and we made a lot of progress on the public transportation side. I asked Bart Rudolph, uh, to what he, uh, attributes this, and it's sort of no one silver bullet. It is all the things that he was previously describing, including now this greater emphasis on training our own with the new CDL program that he described. And I think there's a parks slide. Did we jump over that?

I think we jumped over parks. Oh no, I did talk about parks. The other thing I will say here, Director Gamble actually gave a lot of credit to this trend, not just being the retriggering of the positions, but in the ability of HR to actually process the seasonals. And that is— the question you asked before is absolutely correct. We do this somewhat Kafkaesque thing of making a number of people quit, leave for 2 weeks, and then they apply and we rehire them again.

And so the machine just keeps going. And HR's employment section really couldn't keep up with that at one point. And that is in much better shape now. And a lot of credit to Director Billingsley on that front. That was really the genesis of a lot of the reason for creating the chief administrative officer position when we started.

That a lot of these internal service functions were operating in a way that was causing a drag on the frontline service delivery functions. I think we're in a much better place now. I think that's all we wanted to say about the various vacancy slides. And that takes us to Municipal Attorney, which I think is the biggest winner for budget increase, but it is all more apparent than real. It is because we have gifted the Municipal Attorney risk.

Do we want to go to the municipal attorney? Do you want to move to the ACE Fund? I think I was going to suggest, I guess I was just flipping through to see. So if there's any questions, I guess, from any of the, on any of the departments, I think one to very briefly touch on that we don't need to bring up the director, but just with IT, can you explain why there's depreciation in that particular department budget? Because I think it looks significantly different than other departments.

Susan LaFrance. IT holds the municipal depreciation on our software and SAP. So that's where that comes from. And as we spoke at the last work session, the next year between our depreciation and our IGCs on the, on the IT fund, we should—. We'll discuss during the Budget and Finance Committee specifically to help understand what those numbers represent and how they are moving.

But IT— that's why you see the depreciation line on our AM support every year come through. That IT depreciation is sort of removed and taken out from the appropriation total.

Okay, I actually— I think we should talk to the municipal attorney if she's willing, only because And while she's coming up, so I'll ask folks, is it—. Could we go to 4.05? And the reason is because I want to just say 30 seconds worth of stuff about our branch budget, and then we're going to come back to that topic. And then I want to make sure we have at least a few minutes for ACE Fund. So, okay, so we'll do that, those three things, and then we'll be done.

So Municipal Attorney budget, as Mr. Falsey said, this is a big winner because we incorporated the risk management department. You see the contractual other services line there at $14.8 million. There are essentially small other changes in terms of salaries and benefits, but if there are questions on operations and specific points that Ms. Gardner wants to make, I believe we are open for questions, or if Ms. Gardner wants to tell us what she has been doing because it's great. Hi everyone, I think you've heard from me a lot about department staffing over the last couple of years, but I will say right when I— when we came in in 2024, staffing was quite low.

We had had record turnover rates. I think staffing in the Criminal Division at one point had dropped to like 50%, and the Civil Division was not much better. Um, and I don't know if you've all heard this before, but there are only— the turnover rate was so extreme that under— from 2021 to 2024, I think there were originally 12 attorneys in the Civil Division. Only 2 of those same attorneys were still here when we came in. And in the Criminal Division, and there were about, I think, 13 attorneys in 2021, and only 2 or 3 of those same attorneys were still here.

And that's really destructive in a government law office where institutional memory, and like many government offices, processes, especially in the legal department, where that really carries— makes your people more efficient and better able to advise. So we were able to recruit some people back, but I will say for quite a while now we've been fully staffed. I think there is one vacancy in the Civil Division. We have one attorney spot vacant because of a retirement a few months back that we're working to fill. All the attorney spots and staff spots, I believe, in prosecution are filled, so we, I think, department-wide have one vacancy caused by retirement.

So we're pretty proud of that statistic. And I think that that accounts for some of our budget increase. Some of it is personnel costs as we've been able to hire back and hire very experienced attorneys. So not at brand new attorney rates, but that is all to the, to the greater benefit of the municipality. But happy to answer any questions.

Say we are excited to get risk management. We work closely with them on a number of things. So having regular their department, interdepartment check-ins will be great. We've already figured out some meetings to cross-invite them to, but happy to answer questions. Okay, Mr. Handeland.

Not really a question, just a comment. The way Ona was describing risk management sounded like it was this hot potato that no department wanted, and then I thought you were, were maybe just the last one to be holding it, but I'm glad to hear that you, you are excited about that. Through the chair, I believe she requested it. Happy to explain how that happened, but I also don't need to.

Uh, Miss Baldwin Day. Yeah, I just want to say thank you for the work that you've done to, to put this particular department back on really solid footing. Um, I imagine that has not been a small lift and just want to say thank you.

You're welcome, and it has actually been pretty fun, and we have fantastic attorneys and staff, really just wonderful people in there these days.

Okay. Thank you. Yeah, I think it's always a great story if there is not a bunch of drama or big changes in the department too. So thanks for marking that. Okay.

So very briefly, I'm just going to note page 91, legislative branch. I had previously stated that there were some kind of corrections or things that we needed to talk through with OMB. So we did do that on Monday the 19th, myself, Ms. Rochet, Miss Hines, and I think Mr. Bowen was there as well. Was not there. Anyway, we will come back to that topic.

And I will say in the meantime, if you do have questions about the branch budget, which I remind folks includes the assembly, the municipal clerk, the ombudsman, and then under the assembly is Assembly Council and Legislative Services. So all of the branch is in this budget. We will talk about it in a little more detail later. Follow up with Mr. O'Shea in the meantime, or with those various department heads if it's questions questions about departments, and we'll come back to that next time. And I think we have some updates also about how we will handle election funding going forward.

So excited to share that in the future. And then lastly, I would turn us to— well, also I should note the goal with our branch budget right now is a net zero change, so you won't see increases there, and I'll talk through kind of what that looks like in the near future. So then we'll turn to slide 93, which is the marijuana tax ACE Fund budget. I'll turn back to Ms. Brause. Thank you.

And we have Director Holquist coming up. We have the ACE Fund budget here. As Chair Brawley mentioned, there was a work session a few weeks ago. For the most part, the ACE Fund proposal is—. I shouldn't say for the most part.

I think exactly the ACE Fund proposed two budgets, their primary budget and then an alternative budget that would accommodate education Pre-K funding, and the budget you have in front of you includes that Pre-K funding as well as the other recommendations from the ACE Fund. And if there are questions specifically, I think Christina can answer it.

Yeah, so in our budget conversation last year, I asked a very pointed question about whether or not we were going to continue to see ACE ASD Pre-K funding coming from the marijuana tax as opposed to the alcohol tax.

Believe what was communicated was that the— it was the intention to only do like 1 year's worth of funding for ASD Pre-K, um, via the marijuana tax. So in 2026, this would happen in 2027. And so I'm curious what has happened between now and then that we have at least partial funding for pre-K and Title I schools. And I'm asking this question not because I am opposed to pre-K and Title I schools. I absolutely think we should be funding that.

I think my question is whether or not it is appropriate and aligns with the intent of voters to take something that we were funding elsewhere and move it into a new funding source, which was ostensibly going to go towards new things, not things that we were already paying for in a different fashion. And so I'm curious what the thought process is. Is this something we are going to continue, or that is the intention of the administration to continue to fund in this way? And what are the alternatives? Because I think—.

Significant needs apart from Title I Pre-K and these 8 schools that ought to be funded through this marijuana tax source. So would love to hear anyone who would like to address that speak to it. I think I might be best positioned to throw myself on that grenade. I think we said we hoped that we wouldn't have to put it back into the marijuana budget this last year, but it has showed up again, and there is no reason for that beyond the fact that it was not easy to accommodate anywhere else. So if you take $2 million out of the marijuana tax, you'll have to find it somewhere in the general government budget or the alcohol tax budget.

And as you've seen through over the course of these 10 hours of work sessions, there's not a soft place for that to land. And we also said last year that I think there is a little bit of a jump ball or debate about exactly how the, the voters approached the marijuana ACE fund question. And the ballot measure itself does have language that says you are supposed to prioritize the reuse of school district facilities before other expenditures. I don't exactly know how that all shakes out legally, but at least this does check that box. To the extent there are any actual questions.

Thanks. Other questions from members? And I should say, this is of course also in the category of if the marijuana tax were raising 3 times as much money, we would happily spend it on early childhood funds. It's just a question of resource constraints. Let the record show that Mr. Falsey would like Anchorage to smoke more weed.

I believe Ms. Brawley would like you to do that. That was going to be my answer. Totally teasing. So yeah, I appreciate that it's not easy to accommodate $2 million anywhere else. I think unfortunately the way that the marijuana tax was constructed and then communicated to voters, I think we might have a public information or public misconception around exactly how much the marijuana tax can accomplish with respect to stabilizing the child care sector in Anchorage.

There's like just a huge information gap there. And so I really believe that we need, we need to do some very coordinated, very intentional messaging around that, because I'm, I would, I would love to see us doing more revenue generation that supports this particular sector, that supports conversion of more ASD classrooms to pre-K programs, that meaningfully supports home-based care like all of these priorities that we know are economic engines in our community. And I'm concerned that if we were to put a revenue measure that was specifically for something like this on the ballot, it would fail because people would say, well, don't we have the marijuana tax to do this for us? And so I think we are in an interesting position with respect to public awareness that really we must figure out how to correct between now and this time next year, because I do not believe that we can meaningfully fund meet the needs of families and our very youngest, most vulnerable residents in Anchorage if we don't have another mechanism for revenue apart from marijuana and alcohol tax. Like, we just can't do it.

So I guess I'm, I'm asking for, I'm asking for some kind of coordinated efforts among our branch, or myself as an individual, and the rest of the administration, and perhaps even the Case Board as well, to really address this question. Because I, I don't, I don't think we can do all that needs— I know we can't do all that needs to be done with the two funding streams, very small funding streams that we have. So just wanted to lay that out there and say I'm delighted that we're still supporting pre-K. I'm bummed that it's coming at the expense of other very important work that the ACE Fund was also designed to do.

Okay, and I know we're almost at our time. Uh, Ms. Scout.

Thanks. Um, just a quick question on the theme of coordination and collaboration, um, with these funds and particularly the funds for the pre-K work. Um, are there opportunities for the state to support this work?

Have we explored that through the chair member Scout? The state is and has made investments in early childhood, and so we are looking to— we are collaborating with them and also looking at what programs they decide to implement with those additional funds so that we can scaffold our funding and make sure we're not duplicating services.

Okay, any other questions? One thing I will note just for the record is in terms of potential for— in terms of taxation at the local level, in the ballot measure, the folks in their infinite wisdom when they negotiated this and put it on the ballot said that we cannot increase our local tax until I think either after 2028 or in 2028. '08, So that is a built-in limiter that we have. It also did reduce the tax cap by $1 million permanently, with the idea that it was pulling money from out from under the cap. So just wanted to note those choices were made, we inherited them.

The other one is that I know for multiple years the state legislature has contemplated changes to the marijuana tax structure. So it's an excise tax, is different than a sales tax, that the result of which could reduce the price, and that would reduce our revenue. So I am not arguing— the tax structure probably does need to change, but that's something to kind of keep in the back of your mind as those discussions inevitably come up again this year, that that does have a direct impact on our revenue to the extent that it may reduce the retail price of the product. Miss Scout. Thanks.

Just one super quick question. Where did the Pre-K funding live before this? Before the ACE Fund, the Pre-K funding, I believe, existed in the alcohol tax tax for 1 or 2 years. Before that, it did not exist at all. And I think actually this $2 million number is a rollover number because the alcohol tax in its first few years and municipal operational vacancies made getting those dollars out the door very challenging.

And the Assembly, on I think maybe 2 years, doubled up the alcohol tax totals because the revenue existed. It had lapsed into fund balance, so they they could put 1.5 to 2 times as much out the door the following year 'cause it didn't make it out the year before. So that Pre-K number doubled from 1 million to 2 million because they hadn't moved it out the door. And then when it was moved over into the marijuana tax, it is 2 million because of the room that it gives to students to participate in the Pre-K program and all of the other details that Mr. Valsey and Ms. Holquist spoke to. To.

So, and for whatever it's worth, you'll recall that the alcohol tax is broken into those three buckets. I think it hung on funding to combat and address child abuse. And there the argument was that you surface child abuse when kids enter into the system earlier. In some ways, the ACE Fund placement may be a slightly more natural fit, but it does mean that it moved from being funded in one pocket to being now funded out of this other bucket. And I do have to jump in.

I'm going to make a couple corrections because again, this is an area that I've worked in. So one is the child abuse prevention. It's not so much that they are coming into the school system earlier. It's that the more you invest in the early years of life, whether it's literacy, protective factors like that, it reduces on the other end those instances, whether they are children or adults. So there's an evidence base behind that.

The other thing is the ASD funding was in the— so the alcohol tax went into effect February 2021. The first time it was budgeted was, I believe, in 2022 because it was being collected. Um, and, uh, the ASD $2 million for 8 pre-K classrooms in Title I schools was in there from the beginning. So, so, and again, I just wanted to make sure— yeah, this is one of those things that I was there for. So it's like, I was not here for everything, but I was here for this.

So, um, so yeah, it was in there until it got moved into the marijuana tax, or the ACE Fund, I should say. And I will say that I believe the choice was made specifically to fund some of these sheltering and homelessness demands that were a challenge for this body and the administration to deal with. So, right, it's about the balancing of these funds. And to Ms. Baldwin Day's point, from my perspective, it is very important the way we communicate with voters when there are ballot proposals. And it It is why the administration and our departments get very concerned when non-operational people are the ones only having those conversations.

And so we pay attention to how that is specifically presented because there's a difference between getting people to approve a ballot measure and implementing a ballot measure with the way that we can communicate all of this detail. I don't think that anybody really would have assumed that the $14 million projection from the alcohol tax revenue was going to solve all of the challenges we had and/or provide more service from our, our, what was then our current service, that would have been a challenge in and of itself. But then the state cuts came in the following year and made it essentially impossible to create any sort of tangible solutions in a world where we had a demand for $50+ million. And the ACE Fund, I think, suffers from that same reality because the amount of early education and child care revenue that we could use that would benefit this community is well more than $5 million that's available within the ACE Fund.

Mr. Handeland. Just one final comment. When— if we do increase the marijuana tax and we need another fund to do it, I'm proposing pot for potholes.

Nice. You hear, hear, folks.

Okay. Okay, well, we'll leave it at that for today. So I'll just say a couple of things on the record. First, thank you, everybody. I know this is a big production for the administration and for OMB and everybody involved.

So thank you so much for all of this information. Up on the screen is our— well, we're through these work sessions. We have one more work session on Friday, November 6th. That is to talk through assembly amendments. As I said, we will also briefly dive into our legislative branch budget.

We are scheduled to vote on this budget on November 17th. I believe the deadline for amendments is— Miss Roger, can you say the day? November 11th for amendments. Yeah, sorry. Drafts are due on November 11th.

On Wednesday, November 4th, final due on the 11th, because again, this is a little more complicated than just amending, and so we got to work through those pieces, especially if you're touching the general government budget. Lastly, I'll say there is a public hearing on Wednesday, November 4th, and we may continue those hearings to the November 17th, although we know we don't usually have a ton of folks, but we want to make that opportunity. And then I'll just note for the schedule next week while folks are here, we have 2 work sessions on Friday the 28th. Wednesday the 28th. Friday the 30th is the Fiscal Futures Summit.

So folks who want to engage in the budget out in the big picture, great time to do that. And I think that is the rest of our business today. So thank you, everybody, for sticking in there. All right, have a good weekend. You're adjourned.