Anchorage Assembly: Worksession re Mayor’s Preliminary Budget Information (120-Day Memo)

Print copy before us right now, but we have the memo itself, which was published on September 2nd, um, and so members can refer to that. It's also in our email. So with that, I will turn to, uh, the mayor.

Thank you, Chair Brawley, and good afternoon, members of the assembly. Thanks for the opportunity to start this conversation about the 2027 budget. And as you all know, the 120-day memo marks beginning of our annual budget process. It gives us an early look at the financial environment that we're entering. And this year that environment may require some difficult choices.

Our revenues are expected to remain relatively flat while many of the costs of providing municipal services continue to rise. We are seeing significant pressure from insurance costs, energy costs, and the broader cost of —of living that affects both our employees and the services that the municipality purchases every day. That means we can't simply carry forward everything we're doing and assume that the numbers will work. We will need to look carefully at our priorities, make trade-offs, and be disciplined about where we put public resources. At the same time, fiscal constraint can't mean standing still.

We still need to make investments that position our community for the future. That includes revitalizing our neighborhoods and commercial areas, improving the quality of life that helps our community attract and retain families and workers, and continuing to strengthen public safety. We also have major economic and infrastructure opportunities ahead of us with the expansion at J-Bear and the Fighter Town recapitalization. That growth will bring new investment and new families here. But it will also place additional demands on housing, transportation, utilities, public safety, and other community infrastructure.

We need to be and are preparing for that growth now. And throughout this budget process, we should continue asking a fundamental question: are municipal taxpayers getting good value for the dollars they provide? That means producing better results with the resources we have to the extent possible. Over the course of this administration, we have increased the number of sworn police officers by 91. We have increased prosecutions by 70%, and we have reduced unsheltered homelessness by 28%.

And I thank the Assembly for their partnership in achieving these goals. Those are examples of what we should be looking for across municipal government: measurable outcomes and clear value for the public. So as we begin this process, I think that we have 3 responsibilities. One, to acknowledge the fiscal constraints in front of us. Two, to protect the services municipal residents rely on.

And lastly, to continue making targeted investments that will strengthen our community and our economy over the long term. There'll be difficult choices between now and when the final budget is adopted. The 120-day memo and today's work session is the beginning of that conversation. I look forward to working with all of you over the coming months to build a budget that is responsible, focused on results, and prepared for Anchorage's future. Thank you.

All right, thank you. Any questions, comments from members at this point? And for folks on the phone, of course, as usual, I'll keep an eye on my Phone? Okay, I don't see any in the queue right now, so we will then turn, I think, to our OMB Director, Ms. Braus, and I'll again point to the presentation available. Thank you, Madam Chair, and thank you, Madam Mayor, for kicking this off.

I think we have a lot to talk about, so we can get started. Ona Braus, Director of the Office of Management and Budget. Today we are talking about the 120-day memo. That is— I think we'll have printouts soon, just in case they are helpful. The presentation itself is essentially a summary with highlights of the 70-plus page document that is the 120-day memo.

So there are full copies of the 120 memo on the front table if they're, if they're useful for people. But for the most part, the presentation contains the information that we'll be talking about, at least in summary. So The 120-day memo is required to be presented 120 days before the fiscal year end. It is not a clever name.

It was recently— proposal— obviously this year— code— the— well as— business plans— there are no additional settlements over $200— the preliminary revenue estimate is relatively flat. I think there will be some refined numbers as we move through this budget process. We get updates from Treasurer numbers. The total non-property tax transfer revenue from other municipal— be restored as the other dollars in dollar-for-dollar non-property tax revenues that are under the cap. It is backfilled by property taxes.

The cap is either property taxes or non-property taxes at a set category, and if these go away, these come in.

The trash was a $500,000 number. So this is what we would expect to see of the Community Assistance Program. If the legislature takes action and adds any additional funding to the Community Assistance Fund as part of the legislative session next year, that number may change. Ambulance fees up $300,000, and the Current projection has alcohol tax up about $500,000 or $600,000. We're seeing revised numbers coming in that change that a little bit around the edges every calculation.

And the marijuana tax is going down again, projected a $300,000 loss.

Questions? Questions from members? Ms. Baldwin-Day.

Are we, are we contemplating SEMT as part of the '27, FY '27 funding or revenue package? And if so, how does that fit in? Through the chair, the SEMT revenues are an interesting challenge, and it's because the way the program was established and the way our budget works, if once we, once we budget a certain amount of that revenue, that we are basing on a projection, which we started, I think, in 2021, maybe, or '22 was when the first potential reimbursements were possible. The practice and actual reimbursements that we get from the program are hard to calculate them formulaically. Agency interplay is we carry this year actuals or a blended average of the category based on an application to the state that is allowable at play.

Set the budget with a specific SEMT dollar amount and, and the kind of money that SEMT is existed. So in a continuous actuals or amount, I believe in 2020 and any new in the last year was revenue that came in. Excess funds are, but we don't know what the—. Other questions from members. I have a couple on revenues.

I guess one following up on SEMT, can you actually offsetting what we would have already paid in property taxes for that service, or can you kind of clarify how that fits into the operation? I believe it is an ambulance transport, and when we have something like the MCT that is operation—. Operation can increase our ambulance to partly. Is that still the case, or I guess I know it's all within the fire department budget. I would need to look at how the actual revenues break down and whether or not SEMT funding is directly to the fire or MCAT, but it all goes towards fire department activities.

So I'd need to look at a breakdown. Thanks. And then also note, we were joined, I think, a few minutes ago by Mr. McCormick. I have one other question that I missed, park in the queue. In terms of the revenue reductions to the others, I think you spoke to those, but I noticed There was, what, a million less for assumed vehicle rental tax, and then there was— anyway, a number of them are reduced.

Is that due to, I guess, our population, or maybe can you comment generally on why we're expecting a reduction, or is that kind of a strategic— I know sometimes we'll underestimate a little bit so that we're not overestimating, but maybe you could speak to those assumptions. The revenues that— the non-property tax revenues under the cap that are that the Chair is talking about are the automobile tax, a decrease of $1.3 million is projected. The tobacco tax, $500,000 is projected. Motor vehicle rental tax, $1 million is projected. And Newsom MESA is a $200,000 loss that is projected.

The tobacco tax, we've talked about that decrease, I believe is mostly attributable to the size of one of our vendors who was previously paying in a specific structure and then they reformatted how they are supposed to pay and that decreased the amount of revenue that they had to put forward and they are, I think, the largest tobacco reseller in Anchorage. So that is that impact. Automobile tax, I believe that is based on the blended returns over the last few years. I don't know if I have my treasury sheet with the detail on it, but if I recall correctly, that is the $1.3 million projection reduction there. And motor vehicle rental tax is what we are seeing in a slight decline on actuals coupled with a more conservative projection on tourism.

Okay, thank you. Next, I have Ms. Park. Thank you, Chair. I noticed the decrease in the marijuana tax, and just out of curiosity, are the, are the expenses and the demand for the child care and early education remaining stable, or are they increasing? Through the Chair to Member Park, I believe increasing is the sentiment that we are all hearing and feeling, and the Total marijuana tax fund has never been more than $5 to $6 million on an annual basis.

It has been dedicated for early childcare and education for the last 4 years, I believe, 3 years, and operational with board activity for the last 2. And I think that if we had $50 million more that it would be spent appropriately in early childcare and education with providers. So that is a drop in the bucket in terms of what our community actually needs.

Thank you. Other questions from members?

Okay, I don't see any, so I think we can proceed. The preliminary tax limit calculation. I won't bore you with the ins and outs. We know the 5 steps. You put these in, you take these out prior year, this year.

The actual impact on the preliminary tax cap calculation from the 2026 revised final tax cap to the preliminary Preliminary 27 is a $464 million limit on all taxes collectible, a limit on property taxes collectible at $381.7 million. The total property taxes to be collected will be determined by this body and the budget process over the next 6 to 7 months. And the room under the property tax cap also will be established in that final decision-making. But last year, the room under the property tax cap was $325. Any questions?

Questions, members?

No, see me right now. I will do a little note on the fact that if you— when you are looking at the tax cap calculation, you'll notice that the population multiplier is blank, and it is blank not because we are waiting for a preliminary number to put in there, but because the change between '26 and '27 is zero. And when you multiply something by zero, you get nothing. So it is blank, but that will be clear in the final version, but that is why the population number is what it is.

The administration's priorities, as characterized by the mayor and in the work that has been done over the last few years and stated in the 120 memo, are the increase in prosecutor convictions, in sworn officers at APD additional community service officers to work with the police department. Investment in snowplow drivers and equipment, both through the levy and through other operating changes, is about $6 million. And the real good government activity of completing delayed comprehensive financial audits and the restoration of the muni's bond rating reserve, which will be part of our budget activity in this process. But for the future, looking at putting investments in revitalizing and reenergizing neighborhoods, making common sense solutions for energy resiliency and affordability. We are talking a lot about energy shortages, energy consumption, and the cost of energy.

And the municipality as an entity and a facility owner is a very big part of that picture. And there are things that can be done to make that better for the rest of the community. But the municipality has some, some path to lead there. Boosting the recreation and tourism economy, that brings more economic development for the entire community in all areas when we have our visitors coming through. And preparing for Jay Bear Fighter Town recapitalization and the growth opportunities associated there.

Questions? Questions, members? Miss Kapp. Um, yeah, I'm curious in terms of costs, what does revitalize and reenergize neighborhoods look like? That's an expense.

Is that, does that make sense? Sorry, I'm just—. Through the chair to member Scout. Um, it looks like focusing on what those outcomes are. I, there is not a cost associated with that category specifically.

Is that what you're asking? What, what, what is it? Yeah, I guess I'm just seeing this all through the frame of the 120-day memo and budgeting. And so maybe I'm misunderstanding what that bullet point list is, but yeah, like, if, if it's a budget or financial priority to revitalize and reenergize neighborhoods, what does that mean in this context? Maybe, yeah.

You mean what's going to be in the budget? Related to that category. Yes, the budget is under development right now. Yeah, okay, I see. We may not know things we don't know yet.

Yeah, in terms of that Chief of Staff, um, just to say some examples of things that both in the operating budget but that the investments in revitalization— that could be road projects at the Fairview Rec Center or the Mountain View Rec Center. It's those kind of things that both provide neighborhoods places to be, to be safely, as well as adding additional amenities that really reinforce that we have amazing neighborhoods in Anchorage and giving them a sense of identity. Okay, so it's like capital projects mostly and improvements. Yeah. And through the chair to Member Scout, I will say, uh, to, to the question about how does— how is that reflected in a budget, um, for, for my purposes the budget is the line item and the service areas and where the funding is coming from.

The packaging of that information and the communication of that information and what it— how we tell the community what is changing can be done in a more neighborhood-focused way instead of here is your capital list, here is your AWU, right? Making sure that the communication is clear to the neighborhoods to know what to expect and what they can then participate in so that, so that there is some visibility into that. Okay, that's super helpful. Thank you. Um, I guess I have another question that actually, um, Suzanne Fleek-Green might be able to answer around the energy piece as well.

Um, that's something I'm really motivated by, as, um, everybody knows already. Are there active efforts to do an energy audit of our municipal assets, those kinds of things, to identify where we can increase resiliency and efficiency? Sure, I would hope to—. Happy to answer that. And I will just say the, the mayor has really asked us to look at this as we hear all the news about increasing energy prices, both on the electric side and the gas heating side of things.

What we can do for our municipal assets, so buildings that we own. So that's where the audits come into play. And yes, we've The municipality has done many audits over the years, and Municipal Manager Falzy has been working on a couple of— working with a couple of consultants to do additional audits and see where we could make efficiency improvements. But I will say it doesn't just stop at the walls of our buildings, but the wall within the walls of our buildings is very important because we want to future-proof Anchorage from increasing prices because that would just be another burden on taxpayers. So what— this is a good investment for future years so that we do— are not paying bigger, higher prices.

But outside the walls of the municipality, all of our residents too are facing these increasing costs. And are there investments that we can make to help residents future-proof their own homes, lives, etc. And so that's what we are going to bring some ideas forward. Again, I think both on the operating side and the capital side. Great, thank you.

I'm very interested in collaborating on that. Would love to do that. Thanks. Next, Mr. Golan. Thank you, Chair.

Yeah, so something that I am going to be doing with all of my community councils, and in fact I've talked about this at the recent FCC meeting meeting, and then last night we had Government Hill and Northeast Community Council. So I'm just going to be asking community council leadership to email Sydney and I their top 3 capital priorities. I know that PM&E and Parks and Rec, and I think in particularly Chelsea Ward-Waller, has done a lot of good work on the CIP surveys.

But in the past they've been kind of messy and projects that shouldn't have rolled over have, and you know, the record keeping has just been kind of all over the place. And even when I brought it up at Government Hill, Jody was like, oh God, the survey. So I think it might just be nice to bring the top 3 from each community council, and my hope and expectation is that Some of those projects will already be in the CIP, and if not, we can move them in there and maybe move some of the priorities into the CIB as well. But yeah, that might be an approach that other members want to consider. Thanks.

Okay, any other members for this item?

Okay, not seeing any right now. Okay, the administration's proposed reorganization. As I said, this is mostly the reorganization that the mayor had talked about when Municipal Manager Wynn Pearson left and the contemplation of consolidating the CAO position back into the Municipal Manager column. So for the most part, I think there are no other proposed reorganization changes except those that have already been discussed. Where it lands us is the municipal manager maintains most of the departmental activity under the manager column.

The community development director reports directly to the mayor and has the community development departments and public works. And the chief fiscal officer has finance underneath And the change that I think is the most interesting— I won't say significant, but the most interesting— is that risk management is moving into the municipal attorney's office. And the alignment there was seen as a good way to make sure that the legal and risk realities are communicating with each other and fully aware of what is occurring. So that is The— those are the major changes, but for the most part, everything will remain mostly as we are now.

Questions? Ms. Park. Do any of those changes result in a cost savings as far as how staff is utilized? Through the chair, it may. Once we are complete with the budget reorganization, I believe that it will.

Thank you. Okay, other questions from members? Ms. Baldende. So just clarifying that, um, in that the— so the community development director would report to the mayor? Correct.

Along with the municipal manager and the CFO? Correct. So that will be the sort of like the trifecta, as it were? Okay.

And we stayed the same.

Um, okay, the part of the 120 memo was assembly information requests, and one of them was the Anchorage School District funding gap. We talked about that a little bit this morning. The timing of all of the information, as we know, is really challenging, but we are rolling through the information as we get it. I believe that based on the most recent information that I have seen from ASD, that we will be able to make some adjustments within a couple of their assumptions on the municipal side that will help their calculus— calculation going forward. So that is optimistic, but the activity at the legislative session, this most recent legislative session, really helped the The municipality was looking at a much larger gap in the voluntary contribution, but it was capped at 4%, and so that reduced the number.

ASD numbers show their projection currently at about a $6 million deficit as opposed to the $12 million gap that was originally contemplated at the beginning of this year. We will talk about what potential options are available through the budget process to, to both cure or curb that problem, but also to look forward to the revised budget process in April when we are actually setting mill rates and finalizing the school district's next fiscal year budget. I think the coordination between the administration, the assembly, and the school board will be meaningful and, and frankly, something that hasn't happened in quite some time. I think one of the things that I recognized from the conversation today with the school board is that we have had relatively autonomous budget processes for a very long time. We, we are the, you know, parent organization, if you will.

They are a component unit of us, but for— there isn't a whole lot of interplay between the two budgets except the fund source and paying attention to how all of that is engaged with going forward, I think will be important for the next couple of years while we're going through the fiscal constraints. Questions from members on this? Yeah, I think just Ms. Molden Day. Oh, I'm—.

Wow, my mic's already on. Sorry about that. Apologies to the people on the phone who are probably getting an echo. So our I mean, are we functionally in a scenario where we are going to have to make some trade-offs with respect to school funding and government services? I know that was something we discussed in the past, that that was an interplay with the tax cap that was going to create some challenges.

And I would love to hear your thoughts on that at this juncture. Through the Chair to Member Baldwin-Day, It's hard to say right now because we are still working through our preliminary information, getting through the approved budget process and what the numbers will be from the school district. But to me, from what I have seen, the numbers for this fiscal year going forward are not quite as dire as the scenario that we were presented with last year. As I said, the cap from the legislative session is very helpful in terms of making sure that the separation between what we have available and what they have available is slightly smaller. So do I think that it could come to trade-offs?

I think that that is something that it could come to every year in terms of whether or not the municipal budget is doing what it needs to do and has the funding it needs versus the school district budget and the fact that the Assembly has power over making changes or recommendations within both. I think the question is how much and when, and we don't know that yet.

Okay, we will, we will cross our fingers. Thank you. Thanks. I have myself in the queue. I have a, along similar lines, just trying to understand the mechanics and I understand there's unknowns.

So it seems like really some of the answers to this are what we will be taking up in April with first quarter budget revisions. So I think, but we know we're gonna have some kind of answer now. And of course the school district or the school board has not taken up their own budget. They will be doing that this winter, or maybe it's in development now. My question is, I guess, trying to wrap my head around this hypothetically.

So even though we won't know, I guess the question is, If we say fill up all the way to the cap in November, we pass a budget that of course may change. And let's say there's again $325 under the cap, whatever number you want to pick.

And then we find out later, I guess, is that putting us— or I guess from your perspective, knowing the uncertainty, is it going to be a better situation to basically make those assumptions with the idea that we may have to make reductions in April or that we, for example, leave $5.3 million under the cap and then with the intent of either way truing it up by April? I think that's what I'm trying to understand, like what will be before us in November. To the Chair, I believe the answer is that the budget process will have scenarios or potential options, right? As I mentioned earlier today, contingency proposals. One of the real issues from last year is that I don't think that many of us or any of us were really aware that that was going to become a problem.

And because of how our budget is in a two-step process, if we have a plan and are moving towards that plan that does use all the available revenue, then when we get to the April revised, we either have to make cuts or make other trade-off choices. And I think the challenge was that because it was such a new, scenario for everybody. Figuring out how and when that was even possible while the legislature was still taking action, potentially changing that number, was really part of the challenge. We are now aware that this is a question, that this is a possibility, so we also have slightly more tools in our toolbox because our financials are close to done, which means we have visibility into more of our activity, and that opens up brought up the possibility that if the cap were to be constrained to a point where it creates a gap at the school district, that there may be other revenues available. And what are those other revenues, and what would that look like?

So there are different kinds of solutions that can be had. And knowing that we have this question mark, the idea is to draft a '27 proposed budget with all of the information we have when we have it, that at least is sort of creating a bubble around some of the things that we know might be an issue. And, and how would we solve it if the worst case comes true, or if what we think might be the practical case comes true? I think that's how we'll really be looking at it. But awareness is frankly our best friend in this, and it'll help us a lot in figuring out where we need to go.

Okay, thanks. And I'll just briefly add before we move on, I think parallel to kind of the decisions we make in November and then we come back and finalize them in April, I think there's the narrative of how we are describing our budget. And so I'll just say, you know, historically it's been X amount under the cap or below the, you know, whatever the term within the cap with this setting, sometimes folks setting public expectation that this is like the number that's going to stay. So I just want to note this year in particular, it's going to be challenging. And if, for example, if we said we are leaving $500.3 million under the cap, that is not a real number.

And so if any of us are saying that is a real number in November, that is not accurate. And so I just want to flag that as well, that it really— this budget is going to be extra challenging even for us who've gone through a few budget cycles, because, uh, probably more than most years, um, you know, we, we had a good idea if we did leave room under the cap, it was a much smaller amount, and it was for things like snowplowing or whatever the whatever it was, this one is going to be more uncertainty. And so we're gonna have to figure out collectively how to message that uncertainty. So I just wanted to say that. Next, Mr. Handlin in the queue, and then Ms. Baldwin.

Thank you. Yeah, what was last year's voluntary contribution?

Through the chair, I'm gonna phone a friend.

Do you know what it was, Nolan? I would have to look it up.

Yeah, if you get that to me. And then, so, and then it was, we were $6 million, I guess, under that, correct? Okay. At the current calculation, yes.

But isn't this last year? So like, isn't that calculation done? That's why this is confusing, Member Handlin. So we levy half of a school budget in a year because we are collecting They run on fiscal years, so, but we run on calendar years and we are required to tax and spend in the same year. So we are, this year we collected taxes for a budget that was set the previous year and was already half acted upon and a budget that was being set at the time that was not real yet.

So those dollar amounts are different. Usually, and the tax calculation is based on 50% of each of those dollar amounts. And once you put those together, if you can't reach the total amount you need here, then you have a problem, but you can still solve it with other revenues depending on where you are in the year. And because of how the school district is showing us the math that they were showing us today, they are able to forward fund, essentially. So there is the question of if we have a $6 million gap 4 months ago, does it make sense to fill that gap so that they can forward fund the, the future operations with the revenue that they should have had if we were able to fully fund it, if that makes sense.

OK, somewhat loosely, loosely. And Mr. Clowder here may have some updated numbers for us. Sure, through the chair, Member Handlin. So for the fiscal year '27, so that's the '27, the 2026 to 2027 school year. So crosses a municipal fiscal year.

The required local contribution when they proposed it was $138.9 million, and the, the allowable additional allowable amount, that's the optional amount, was, was $96 million.

For '26? This is for the FY '27 for the school district, which is, which spans 2026 and 2027. So I can maybe restate as well. So the state fiscal year slash ASD fiscal year is July 1st, 2026 to June 30th, 2027. And so essentially they have already approved a budget for half of 2027, and we have not even taken up our 2027 budget.

So it's— I think that's, that's what you all are describing. I'm seeing— not so— I guess just with the, this chart here, I guess that my thing— so the required contribution went up $5 million, but the voluntary contribution, that sounds like that went up $12 million from, I guess, looking at just the— if we had that other bar on there.

That— I think that is correct. We're talking about—. Yes, you're gonna make that one and not that one. That is right. And the number that I'm giving you is when they proposed it, so it's not the same as the approved, so the amount may have been adjusted.

That's just the number that's readily available that I can find. So, and to Mr. Cloutier's point, the number he was giving you was the number that was part of the proposed and approved school district budget.

Is not the number that is part of the revised school district budget after the state has taken action and added more funding. So you heard, uh, CFO Ratliff from school district earlier today say that they are going to come forward to you with an upper limit funding proposal, and that would then change their previously approved budget total, which if it were in action could change all of these total dollar numbers and what we can give— not what we can give to them, but what we are able to give to them because we actually have it available. So the change in their numbers— we can put this on a piece of paper so it's clear— the change in their numbers changes what we have to give them, or what we went from, from being short $12 million to being short $6 million, and Looking at how that actually impacts operations when we are able to fix any of that funding is, I think, part of this question. How and when?

Yeah, Mr. Hanlon, do you have further comments or? Not at this time. Okay, next I have Ms. Baldwin-Day and then Ms. Skow. I think Mr. Hanlon covered the substance of my questions.

I would love—. Can I have a flowchart? Yeah. Through the Chair to Member Baldwin-Jay, I think we will have to have one when we are talking about the scenarios of what we might be able to do or what we could do when we need to, depending on— yeah, we're definitely going to have to have at a minimum, the current information that we have as a placeholder with additional backup details on the contingency scenarios. Yeah, I think, I think that would be really helpful, and whether that's like a Gantt chart or— but just like understanding where are, where are the decision/intervention points, I think would be really helpful.

I'm like trying to build it in my brain right now, and it's not going very well, so I think having something like that would be really helpful to just scaffold this conversation because it's— I mean, clearly this is going to be like, this is going to be an ongoing conversation for, you know, the next several, several months. So, okay. And, and through the chair, the, the— I believe based on when and how the school district has to take action is the most critical, uh, inflection point, but it's not the only one, and it's also not timed in a way that is really possible with a lot of the other pieces that move into the system. So, you know, you— we try to have the conversation when they know that they can then plan for and hire or lay off anybody that they need to, but we may not know the state activity at that point in time. And so if the state takes action, this is right, this is the annual problem that they have.

And so, so for us, Yes, being able to know what we can do for the school district as part of our revised budget process is ideal. If we aren't able to resolve everything as part of April, you can do it at any point throughout the year, right? They'll bring you something as part of fourth quarter, but that doesn't correct any action they have already had to take because of the numbers that they were thinking they were moving forward with. And that's really one of the challenges here is, is that the, the one-time revenue that comes in after they have taken action is challenging.

Okay, next, Ms. Scout.

Um, I was in the queue to kind of do a follow-up clarification on Member Hanlon's question, which was, I think my follow-up is just the school, so the school board's budget or like expected revenue changes, which then impacts our allocations or like our ability to allocate to them. Through the chair, no. Oh, um, our—. Oh no, great, I figured it out.

Mostly what impacts what we are allowed to give them is the state activity and the tax cap, those two things. Okay, and in this case, the state activity created the need for too much money that our tax cap could not provide, because the, the way the school district side of the tax cap is calculated separately than the municipal side of the tax cap. That's why we are able to go through our approved budget process usually without any conversation about the school district, because our budgets are separate and their taxes are calculated separately from our taxes. They use the same construction inputs, they use the same CPI inputs, but as far as judgments settlements and any other one-time activity, theirs would be put in the same way ours is in our tax cap calculation. And, and so what, what changes that number for them is the CPI multiplier, any of those other inputs that we also have, and those inputs should match whatever our CPI input is, should be their CPI input.

And then we have the tax cap amount that is available for them to spend. And if there is more under the tax cap available for them to spend and their budget does not consume it all, then that is tax cap space that's left on the table. But for the most part, in the recent years, their budgets have taken up all of the tax cap calculation available on their side of the tax cap. Okay. So there's— so when you say— sorry, I'll— I'm just trying to understand this.

So when you say there's tax cap space left on the table, is that money then we can spend if they don't spend it, or it's like we allocated it? And I just— through the chair, yes. Okay. It is available to the municipality because it all flows up. So if there is room under the cap available because the school district can't spend it, then the municipality can spend it.

Okay. And then, so what happened last year was basically the inverse of that, was that they needed more funds and we hadn't been able to collect them because of the projections. We weren't able to collect them because of the tax cap. Because of the tax cap. Correct.

Okay. Because the— so their budget was built on a projection that required $100 million. Our tax cap only afforded $50 million. Okay. So then there's the $50 million question.

The state took action cut the $50 million question in half. And if we had somehow cut municipal services by $50 million to fill this gap and then $25 million came back in, we would be— then it would have gone to us. Okay. But we would also have been in the same situation of taking drastic action for cuts on activity that then is restored. Yeah.

And so there's trade-offs in all of that. Yeah, big shakeup. Okay, thank you. Okay, I have myself in the queue next. One, just to— I wanted to provide a recent example, but before, also note, so there's the required local contribution, there is the limit on that, and then the other thing to understand generally is it's within the space of instruction.

So we also provide funding through, well, through various sources over time for pre-K classrooms. We provide funding for school resource officers. That's been a big discussion over several years. Yeah, mental health. There's been a number of things, and because they're not considered instruction, they are not within that cap.

And so that's important to understand. However, the Department of Early— or Education and Early Development, you know, had put out a regulation to basically say all of that is under the cap. So it would have forced basically several million dollars of less funding to the schools and that's really an open question. So I mean, I think that regulation didn't move forward, but it is important to understand that it is an open question in some ways, or it has an unresolved question of what goes in that cap or not. So that's another thing just to be aware of.

And so, and you know, it was to the point that the department was beefing with us on Facebook and naming individuals, assembly members, because, because we dared to call that out. And so just to say like that, I don't know if that conversation is going to come back. Fact that it's been there, but it does make it more complicated of what is within that instruction, which is generally interpreted to be K-12, and why you will hear the school board in the past has come to the assembly and said, can you fund school sports? Can you fund transportation? Can you fund things that are considered outside of that instructional cap?

And the challenge on our side is we don't have, we didn't have that money available to just do that even if there was interest. So that's another layer just to add to the table, but that's outside of this kind of question. And then the other thing I'll just mention, I'll have Molly or Jasmine circulate, Last year, AO 2025-29S, that was the ordinance that approved the upper limit for the school board and/or the school district funding. At that time, the discussion at the time was increasing the base student allocation. And so we had to take action.

This was April 2nd was the date on it. We had a special meeting. But essentially what we put in this section, and I wanna note, 'cause this is an option that we have as long as we work with our attorneys, It basically said that we approve X amount if the legislature takes action on the base student allocation by a specific time and with an assumption about a specific dollar increase times the average daily membership that we preemptively allowed the school board to revise its budget. So, so right now what they have said is they have to bring it back to us for approval. This was pre-approval within very clear boundaries.

It said it did not change the local contribution, didn't change property taxes. But it essentially saved a procedural step where we said, okay, in this scenario, if this does come to pass, which it did at the time, but we didn't know that back in April. Anyway, so I'll have this circulated, but so there are some ways that we can kind of address some uncertainties. But again, we really have to have the parameters known at least for that to happen. So I'll circulate that just for members' reference.

Ms. Baldwin-Day. And I also want to make sure that I have this correct in my brain. So an increase to the base student allocation also increases our required local contribution. Is that— no? No.

Okay. Good. So, all right. So, so, welcome to where we are. Through the chair to Member Baldwin-Day, the, the, an increase to the base student allocation raises, ends up raising our allowable contribution.

Our allowable contribution is a function of, of, of the the BSA, basically the formulas that, that are under the base student allocation, that the total amount that that points to, um, 23% of that amount is our allowable contribution. Our required local contribution is actually completely separate from that, and it's based purely on what the state calculation of our full value determination of our, of our, of property value, which is different from our assessed value that our assessor comes up with. And so it's based on a mill rate calculated on that, that produces an amount and then that's our required local contribution each year. Okay, so, so a permanent increase in the, in the BSA changes what's allowable. It does not change our required local contribution.

That's correct. But as our contribution increases, the state contribution decreases dollar for dollar. On the required local contribution part of it, yes. On the optional contribution that goes to schools, that actually, that that's additive to the school's budget, but the required local contribution is an amount that just comes out of what the state provides. Okay, so as our— so as our property tax base grows, our required local contribution increases stepwise, and the state's contribution decreases dollar for dollar at that level?

That's exactly right. Okay. Through the chair to Member Baldwin-Jay, all three of those things you just mentioned happened all at the exact same time, and that's why we had the problem we had. Yeah, that—. I was, I was trying to remember like what was the confluence of things.

So thank you, I'm, I'm clear, sort of. Thanks.

Okay, um, other— on this particular topic, any questions, comments? Okay, I think school funding will be an ongoing education opportunity. Uh, the assembly requested additional information on, uh, the Jay Bear Fighter Town recap Capitalization, uh, uh, Mr. Glotta, if you have anything to say on this, feel free to. But, um, this has been discussed a little bit with the assembly, I believe. The military construction investment over 5 years is projected to be $7 billion.

Uh, there are projected to be 200— or 2,500 additional military personnel, uh, within Anchorage, and construction start starts next summer.

The growth strains our housing market. As you know, we are already strained. This creates an even bigger issue in terms of what's available and how much it costs. We are working with JBEHR on financing and locations for potential housing development, that we are working on housing development at large. So if there are other comments— no?

Okay. Yeah, I think there's a few. I have myself in the queue and then Ms. Cowan and Ms. Silvers— or sorry, Ms. Silvers and Ms. Cowan. So my question is— so another rabbit hole that I don't want to go down in depth is the state's total value assessment of everything in the muni versus what we actually assess. So that's a whole other conversation we can have another time.

But my question is, to this point about multiple billions of dollars, when those are constructed, are those considered part of this total assessed value? Do they include what's on the base? Because I know they include government property in other circumstances, but I'm not sure if they include federal property. Through the chair to— sorry, Chair Brawley, they— the— anything built on base that's owned and operated by the, by Department of Defense or Department of War, you know, is not taxable. There are— so the projects that are planned for military construction on base themselves would not be taxable, but of course any additional housing that's outside of the base, you know, would be.

And also there are circumstances where there are properties at JBAB that pay a payment in lieu of taxes to the municipality too. Some of the privately operated housing that's on that's on base does pay a pilt to the municipality. So there can be circumstances like that. Okay, yeah, I guess my question specifically is whether those things are not taxable, but if they are included in the total assessed value from the state's perspective, because just to flag, that's a whole, again, big topic, but what the state considers our total assessed value to be versus what we actually tax are two different things.

Chair Brawley, they remove exemptions that are required by states. So I think that the fact that the federal government is exempt is in state statute, and so it's something that we don't have— it's not considered an optional tax, so that is retained. So it's not in the full value determination for the state for the purposes of our required local contribution. Okay, that is actually good news. So, okay, next, Ms.

Silvers.

I have two questions. Excuse me. My first question is, is there any obligation of the Department of Defense for housing to support this activity? And then the other question is, will this additional activity and revenue flowing within the area have any effect, or what kind of effect will it have on our tax cap?

Through the Chair to Member Silvers, I think that when it comes to the obligation to provide housing, what has been messaged to us, we're working really closely with the installation now, but the general expectation when an installation expands more recently has been that the surrounding community through the market provides the housing. And we see some challenges with that because we have an environment where a lot of housing doesn't pencil, you know, financially. So we are working hard to find ways to get federal investment that helps spur housing. A lot of times it's not necessarily to build housing, but to pay for infrastructure that enables housing development. So that's a pathway that we're trying to pursue right now.

There are a lot of known pots of money that that generally do this type of work, but there are a few opportunities and we're looking at other ways to get more. And so it's something we're going to be working on with our congressional delegation and others. So that's a, that's a very important question. The other, the other part of it, um, that the, how that, how that affects our, our fiscal picture is that, that, I mean, we really are depending on, you know, new construction that's taxable, I think, to produce new revenues. I think that that's the biggest thing.

There, there could be some incidental state fuel excise tax or other things that come with a growing population. But generally speaking, you know, it's the increase in valuation from new construction that would produce more revenue for the municipality.

Okay, Miss Kapp.

I think I'm trying to understand exactly what the housing pressure means because Are we talking about people— are we talking about service members who are coming up and working at JBER that we don't expect to have housing at JBER, or are we talking about all of the supportive, you know, people working in construction, doing all the other things that support the service members, or is it the service members themselves won't have enough housing on base? Uh, through the chair to member Scout, these are the 2,500 are are the projected new service members, and they have families too, that are— that's 2,500 families, right, that are coming. And they— there will be a little bit of on-base housing barracks, mostly for junior enlisted folks, but that's a few hundred of them, right? So the rest of them will have to be in the community at large. That's not including the construction or other kinds of supporting activities that may come with it, but that's the kind of permanent increase to the, to the population.

And then also one other point that I'd mention is that, is that service members do have a housing allowance too. So that's, so that's additional money that can go towards rent or purchase of a home that is, you know, going to be infused into our economy and ideally spur housing development too. Okay, thank you. And I think I have Assemblymember Hurt wanted to respond as well, and then I'll go to Ms. Lee-Green.

Uh, thank you, Chair. I actually have less of a response and more of a question, um, for the administration. I'm looking at the DOD Comptroller's website right now, and I'm seeing an appropriation for housing for JBARE in the military construction budget of about $156 million. Is that— is that basically earmarked for the barracks and dorms that you were referring to earlier, or do we have any idea if any of that's actually going to be translated into family housing units?

Through the Chair, I believe what you're looking at is probably is for dorms or slash barracks on base. There may be some money, some of that funding might also be for reconstruction too of existing facilities, but that I believe the on-base housing component is for generally a small share of what we're expected to see. It might be for some of the existing population of the installation as well. I'm not 100% sure what the numbers that you're looking at. Yeah, no, that's fair.

They, they have a lot of renovation they need to do on, on base as well. Thanks. I appreciate it. Okay. Uh, Ms. Green.

Yeah. Uh, in case it is helpful, I think you should really think of this in two phases. So phase one starting next summer is the slug of money that starts to come for the construction. And what they have presented is that it's all over on the runway. Recapitalization of properties along the flight line.

So the first phase of people coming will be construction workers, and that will be a lot over the next 5 years. So one housing challenge is for that more temporary because our current population cannot accommodate all those construction jobs. So we will probably have a transient workforce that needs to be accommodated somehow in Anchorage. Which would be a different type of housing. Ideally, we would build housing that can serve both that transient population and then eventually serve this new 2,500+ population of service members because this recapitalization is occurring to bring new missions to JBAB, and with those new missions comes new service members.

So we will We will have to have— someone will have to have housing for the construction phase of it, which will take 5 years. But as new projects are finished, you will start to see the influx of that 2,500-plus, which the majority of those will need off-base housing. And I think the military generally thinks that through that base housing allowance, think of it as a voucher that they take out into the private sector to rent homes. Um, and in a lot of places that works just fine, um, where you can travel long distances and commute. Here it is not going to work so fine.

And so the hope is that knowing that, that money coming with a lot more rent creates a signal to developers to build, and what we can do as a municipality to help those developers build.

I have a couple follow-up questions, but I don't want to jump the queue. I guess up to you if you want to. I do have a few folks in the queue, so it's okay. I have the floor. Okay, so do we have— do we know how long of deployments, the additional 2,500 service members are expected to be here for?

I wouldn't consider it a deployment. I mean, they will come and rotate in and out base, but that doesn't mean that the jobs go away. So, I mean, there will be the jobs that come with the missions. Those jobs stay and probably will grow. Like, I mean, perpetuity or it's like a 10-year project.

We don't know. When all threats of war—. When the world knows peace. Okay, great. I mean, I think— right, I can tell.

I can definitely get it outside of our little universe. Okay, no, it's a good question. I will say, from everything that we have learned, uh, both Ilsen and J-Bear are very well-positioned bases worldwide for growing military needs around the world. So, and they are investing in J-PAIR because it is a good location. Um, they had underlying assets that are valuable to build upon, and they will become more valuable.

And I think all of us, right, that's economic growth to We would like to see JBear grow. Yeah. So what can we do to make them competitive for those missions is a really key question, including can they just put service members here? Yeah. But the, but the, the direct answer to your question is they're here for 2 to 4 years and the 2,500 is a stable ongoing, generally as far as we know with the vagaries of defense budgets in the future, it's intended to be a stable increase that should be indefinite.

Okay, got it. So it's 2 to 4 years starting, but TBD. Okay, got it. And I guess this is probably more of a big picture question, but like, what happens if they come here and they can't find a place to live?

Do we know? Excellent question. Yeah. Okay, I think that's—. I mean, again, part of this is it is a partnership.

We want them to be successful in attracting the missions. So part of that is how we as a municipality can help them. They have land. I don't see them utilizing their land outside the fence, and like Mr. Clowder said, not utilizing it very much inside the fence. So, uh, is there other land that can become available?

Can we help on the utility side? Again, um, we joke if we only had a bucket of cash, we could also spur a lot of this development. But so housing is one thing. Um, certainly good schools, also very important. We heard that every time the mayor meets with the Colonel, that comes up.

They're looking for good schools, so their families want to be here and, and stay here. Utility prices.

All things that make them competitive. Okay, thank you. Okay, next time, Mr. Handlin, Miss Baldwin-Day, Miss Silvers. Yeah, just hopefully a quick question on— so with the payment in lieu of taxes, I'm I've never really seen, I guess, I don't have a whole bunch of information. I'm assuming there's some kind of calculation.

And so with this base recapitalization, do we expect that number to go up? Through the Chair, Member Hanlon. From the, for the plans that we're aware of on the construction side, I don't know that any of what's going to be built on the installation is going to be subject to a payment in lieu of taxes. The properties that are— that do pay a PILT on the installation are— there's privatized housing, Aurora Housing, that's there, for example. It's on the installation land, but it's privately operated, but it's housing for service members.

That pays a PILT. I don't know that any of the buildings that are planned have that kind of a model where there's a private operator, but if there is a private operator, that's the situation where we would probably come up with a PILT agreement. Like that. So we don't know exactly. Okay, thank you.

Okay, next, Ms. Baldwin-Day. Thank you. So, so are there, are there DOD dollars actually on the table for housing development outside of, like, off base? Uh, through the chair to, uh, to Member Baldwin-Day, there, there is very— there, there's one program, the Defense Community Infrastructure Program, that can be used for some types of civilian infrastructure that somehow supports a defense mission. There is some precedent for using that to spur housing development, but it has not generally been used for that.

It's for other kinds of, you know, roads that are jointly used, or the Port receives some for drainage infrastructure that affects JBER and the Port. So the answer, though, is that there's very little out there that's labeled as that. That. That there's the potential DSIP, but we, but we can look at other kinds of federal sources too, you know, CDS requests from, through Senator Murkowski especially and others, but generally speaking, DOD puts very little, has very little available that can be spent on civilian infrastructure, you know, that's not for a direct military purpose. So that's something that we're kind of working on right now is figuring out what other kinds of possibilities there are.

I have snarky things to say about what constitutes a reasonable expenditure of DoD funds.

Do we have any idea what the amount— what sort of range we're looking at? I mean, we have folks who are coming with basically a monthly housing allotment. Do we have any idea what the range of that allotment looks like? Yes, through the Chair to Member Baldwin-Day, we were provided by the installation that I think we can share with the Assembly, and we've been told we can share it publicly, is basically a breakdown of the 2,500 families, the expected rank of each of them, and the rough family size that are generally expected with each of those ranks, and then the housing allowance that corresponds to it. So we can actually size this, the total amount of money that's available, It's something we've shared with some of the developers, home builders, and others, and I'd be happy to share that information with the Assembly.

Thank you. Yeah, I think, I think that would be, that would be really interesting to take a look at. I mean, because really what we're functionally, what's happening here, what sounds like is going to happen is we are going to have subsidized demand coming into the community, which is at this juncture only going to put upward pressure on prices. And so I think understanding what the scale of that might be and also potentially using that to think really carefully about what we're doing or, or how we're disposing of municipal property and, and what types of development we might be like actively trying to incentivize in those spaces. I think doing some really intentional matchmaking, um, could be a smart way to go.

Um, do we have— I think, sorry, Ms. Fleetgreen wanted to respond to that question as well. Yeah, go ahead. I'll just jump in. Um, might be helpful.

Chair Brawley and the mayor were at, in July, whatever that industry day was, and one of the things that Chair Brawley has asked for, and we have still tried to get a commitment on, and I think it will happen, is bringing in leadership from JBear to essentially do a work session with the Assembly to provide more information on Fighter Town— my favorite word— Fighter Town recapitalization, so that, A, I think you have a much better understanding of JBAB operations as they stand now, and then what that $7 billion can do. And I think then they will help answer a lot of these questions. We had hoped that they could have come in in August, but they just had big change. Their entire leadership changed out over the last 2 months. So they have a new commander who is in charge of operations on Jabbar.

So we will try and lock that down so that you have actually people who know how the military works. I think we have Zach, who knows more than probably most of us here. Bring some people in uniforms to come talk to you. Yeah, I think, I think that would be helpful. I know, I know that, you know, elsewhere where there are similar recapitalization projects happening, the U.S. Army Corps has also met and discussed what, what their role is in these recapitalization efforts.

And so I think that might be helpful as well if we could have some Army Corps folks come in. They will come with the J-Bear folks. The Army Corps has is already staffing up to prepare for this. They run the projects, right? So they are already staffing up to do this.

So I'm certain they would bring an Army Corps staff with them. Yeah, I think that would be a really fascinating work session if that's something that we could coordinate. I think my, my last question is just around— I mean, this is, this is a pretty significant investment opportunity. And it feels like the volume of what we're discussing might actually outstrip the capacity of what our local developers can reasonably accomplish. And so I'm curious, have we, or do we have plans to sort of shop this opportunity to developers elsewhere or in proximity who might have an interest in coming in and doing work here when maybe they wouldn't have otherwise done so?

Um, And, you know, is that within the realm of possibility, I guess? Through the Chair to Member Baldwin-Day, we haven't, you know, specifically reached out to other developers, I think, outside of our local developers. I think we've definitely communicated a lot with them about this, but I will say we were at the Defense Forum, the Mayor and I were at the Alaska Defense Forum in Fairbanks a couple of weeks ago, back in late August, and we see that there's already a lot of out-of-state interest in this project and what's happening there. And so there are a lot of developers who focus on military-related or military-adjacent housing, you know, nationally, that are looking at the JBear expansion and for opportunities to jump in and make investments there. So we are seeing that.

All right, that is good to know.

I think, yeah, I'd love to visit some more about that. Not right now, but later. Cool, thank you. Okay, thanks. I'll do a quick time check.

I know we started about 10 minutes late. We don't have a set end time for work sessions, but I'll ask folks if we can extend by 15 minutes. I know it's been a long day, but we have a lot to get through. So, and then I'll also suggest, hopefully we can get through this discussion, and then I do want to spend some time with the capital budget as well, or at least the initial proposal, so the CIP. So next I have Miss Silver's in the queue.

Okay, great. Okay, I think I don't have anybody else in the queue on this one, so why don't we move on. And then I'll say, yeah, when we get the work session scheduled, we're just waiting for Jay Bear leadership to commit to that. So, so next slide. So the information request, the number 3, was the potential impact of the Alaska Gas Line construction and other notable developments The gas line, right now, the biggest impact would be all of the materials going through the Don Young Port of Alaska, at least the biggest known impact.

But, and if Mr. Klauder has any additional information on gas line impacts, he can share those. If there are questions on gas line impacts? No? Questions, members, on that? Mr. Johnson.

With gas line impacts, we're also anticipating potentially a large influx of workers to Anchorage, right? So I mean, that fitting with a theme about the Jay Bear developments, this seems like it's also one that we should be keeping in mind. I can't remember what it was from the ADC today, but some thousands over the course of the first 5 years, right? Through the chair to Member Johnson, yes. If, if we were to have both both a gas line project and a Fidertown activity, we would be seeing some extremely significant influx of both people and business coming in, and so that would need, I think, very concerted effort and some additional resources.

Other notable developments in terms of actual development, the South— South Central Foundation is opening a new crisis stabilization center. The Alaska Native Medical Center, for anyone who has not been over in that area of town recently, is— there's a lot of work that's going on over there that is very impressive. Hotel constructions, there are several projects underway that add bed tax revenues. The FedEx sorting facility out at the airport joins the other cargo projects out there. And the Touchmark Senior Living project that has been in the works for a while now.

All of those are moving along, and I think that is a lot of very significant activity that we haven't seen for a while, and that's very good.

It's very good. Let the record reflect.

Okay, any further questions? Ms. Park. Is there a date by which housing will be available on the Touchmark project, estimated? Through the chair to Member Park, our favorite advocate just left the room. She— do you know Nolan?

Through the chair to Member Park, they are starting construction. I mean, they've already been doing the dirt work, the groundwork this year, but they're starting construction next year. So I think that the— I think it may be an opening of the first units in 2028, I want to say, but I'm not 100% sure.

Okay, any other questions on this one? Okay, before we move on to the CIP, I do have one general question to put on the record here, and I know again the budget will not be finalized until it's done in October, but question From where you are sitting now, I imagine there's a number of requests from different departments. You know, just the large balloon of need is very large, right? But are you anticipating at this point, is it really holding— like, I guess, how far are we going to be from a continuation budget? Is there additional kind of room that you are maneuvering around?

Are there things where you're— because I know there's been discussion about department reductions things like that. So just wondering at this point, you know, if you can preview any kind of order of magnitude. Are we looking at significant cuts? Are we looking at any major increases in departments? Is it all holding steady?

Thanks. To the Chair, I think the safest way to put it is, from what I can see right now, it is a relative continuation budget. There are some choices that have to be made in how prioritization is happening and some cuts that will be taken. We are working through the list of potential cuts right now to discuss the ones that are obvious in terms of, okay, we have identified that that is something that could and should come out, and so that is a given. But then there are the decisions of these— this shouldn't necessarily come out because they impact service levels, but they have to in order to make the continuation budget happen.

I don't think that there will be drastic $20 million conversations right now. We'll save those for next year. And because of our flat revenues, we have some choices to make, but it is not the worst case. Great, thank you. So that kind of bookends the operating budget conversation and the things that that affect really both, but now I think we're going to turn more into the capital side.

So we'll go to the next slide. So the 120 memo contains all of the capital projects that were requested by the departments for 2027, as well as all of the existing capital program projects for 5 or 6 years. You see, I, I made this graph specifically the total of all of these projects and the cost over those 6 years, or the current requested known cost over those 6 years, and you see that it's $867 million. You also see in the other chart that the 2027 proposed funding sources, it are majority bonds, which means that that is property taxes and property taxes only. Uh, for the most part, that is because the other funding sources that we have historically had do not have funding available.

So when we are looking at deferred maintenance and road infrastructure and all of our facilities, it comes down to mostly one fund source, and that is property taxes and bonds. And the way we build our capital programs, you sort of have the most robust demand in years 1 through 3, and years 4 through 6 have not necessarily been designed or programmed. Project estimates are not made on projects that may happen 4 years from now. So you can imagine that, that that sort of wave of funding demand just continues forward every single year. If we have projects in 2027, you see $120 million of bondable projects on the list.

That is not what is being requested. That is what the departments need in terms of telling us these are the things that could be paid for. The $120 million $19 million in potential bondable projects will be packaged differently in the proposed budget. But the demand is never-ending in terms of the deferred maintenance and the amount of time, given how big our community is, not in density but in size. Okay, questions from members on this?

Okay. I have a couple questions, but I think we can deal with them later. The Utility and Enterprise Capital Program, similar sort of planning and administration in terms of the out years being less robust than the near years, but the difference here is that most of these projects are done through revenues or equity within the utilities and enterprises, and they are not property tax supported. So, any questions on these questions for members? I'm not seeing any.

Okay. Miss Baldwande.

So I recognize that this is not going to be a conversation for FY27, But do we have, do we have further clarity on how our CIP program changes if we have, if we have a true stormwater utility and we are doing our drainage and maintenance work via a utility as opposed to a capital bond?

And I guess, do we know what that balance looks like? And is that potentially a more efficient way to go about doing what's needed in terms of deferred maintenance? Through the Chair to Member Baldwin-Day, I have made a point over the last couple of years of identifying all of the sewer and drainage projects that come across our capital list, things that are related specifically to stormwater and that kind of demand within the community. Do, do I know what the trade-off between those two choices are? No, but we can tally the cost of the capital projects focused on drainage and the cost of potentially administering a stormwater utility and what those may be.

From my perspective, in terms of what I can see and the capital projects that we do and the demand for those kinds of projects specifically, no, this is not the most efficient model. Yeah, I think I did, I did, I think I did some very rough math. And in our last CIP, it was like $114 million of our capital program was just drainage.

So, yeah, I'm— I will say it again, I am really, really excited to get a viable proposal for a stormwater utility to be able to put in front of the community and say, hey, we could do this better, we could do this more efficiently, like, let's, let's try a new thing, right? So anyway, thank you. Thanks. Other questions from members?

Okay. I'll ask my couple questions. I know the last two slides are really timeline. My two questions are overall, and again, this is something that you guys may not know yet, but what is the administration's anticipated approach to the CIB and specifically to bonds? And I mention that because I know there's no magic number of what we say the bond amounts are going to be, and obviously there's the total and then there's each category.

And it really is up to what we think voters would approve, you know, what is reasonable. So I'm wondering if you guys have any initial guidance or initial thoughts on kind of what order of magnitude that might look like beyond what's published here, knowing that this is not the final prioritized list. What we're looking at right now is packaging that is, I believe, larger than last year's, at least upon initial offer. The conversation is also packaged slightly differently because of the facilities and maintenance demands that we have. So there is an area that, that has not ever— or not ever, but has not recently been sort of part of the plan, partially because of the capacity within M&O and our facilities team, but also because of the demand of department activity on the facilities team.

So I think you'll see a contemplation on how we get through the next 1 to 5 years on maintenance improvements and what some of that bondable activity might look like. There is most certainly always the room for member adjustments in terms of, as Vice Chair Voland mentioned earlier, district priorities that are for any of the roads or parks projects. I think what we have seen over the last couple of years is, aside from a couple of questions, the majority of our bonds are passing successfully, and we are being messaged with, that's good, let's do more of that. So making sure that we have the contemplation about what the city can do in a construction timeline, coupled with where we need to put the largest investments, is part of all of the contemplation.

Thanks. And then, yeah, and I think that would be helpful to also see as we move into the budget cycle, the anticipated bond debt that's being retired, because I know that's also the other number that we don't always talk about. My other specific question, again, we can get into the CIB later, but I'm looking through the columns and I see the bonds, I see federal, et cetera, and other, which is where the DeNinos Center money sits, and Egan. For the state requests, and I mention that because we're going to be moving into the legislative program, so those two things are connected, our CIP and our legislative requests. I'm curious the thought right now on, for example, I did not see any state requests for ARTSA projects, because I know those are bonded for, but I did see a number of them in Eagle River, for example.

So I'm wondering, in terms of what we're asking for with the state, again, not something we can get into detail here, but my question is, if the muni has X amount and there's a ceiling on how much we can ask from the state, who are we asking on behalf of? And even for places that can bond, I think there is a question, a fairness question that we should consider as a body is, you know, whether we should always rely on bonding, even if we do have the capacity to do that, and what that looks like in other areas that have chosen not to bond. Thanks. And to the Chair, I believe the premise in changing the way the capital list reflects the state requests was to provide visibility to everyone that those are not baked in. We are not going to request those every year the way the historical practice was because there's no funding, there's no attention to it.

So making it appear as if those requests were occurring every year, we think it makes more sense to put the requests into the column as they are approved as actual requests. So instead of holding all of the dollar amounts that we would need to bond for, but we're not bonding for them this year in the state column, which is what the practice was. We would just move them from the bond to the state side and say we're going to ask the state for that because it's not on our bond. And that is how we would get, you know, twice as much construction maintenance on our equipment or on our infrastructure. But that is not happening.

Thanks, Miss Park.

Can we expect to see any increase in return from the bonds because our, our rating has improved over the last couple of years? Through the chair to Member Park, I would need to ask public finance to give us details on that. I think the answer is probably not. Really, because it is— we, we, we put the bonds out on a rolling basis when we actually need the money. So we may see a decrease in the cost of the bond, but it doesn't necessarily come across as a cost savings to us because it wasn't fully budgeted until we actually put it out into the market, if that makes sense.

But our costs should improve if a bond rating goes up. Thanks. And then I'm also turning to Mr. Hanlon. You would want to be in the queue at the end because I know what's left is just timeline, so it seems appropriate now. So I guess kind of on the timeline, I had just kind of a more general question, didn't want to take up— is us being— our fiscal year not aligning with the state and the school district, is that cause, I guess, additional work, additional thing?

Is that something— not that for like this budget cycle, but I guess for the future and stuff— is that something that maybe we need to take a look at? Uh, through the chair to member handling, we have, uh, a few times specifically because it seems so logical, right? The challenge is that we can never be in alignment with all of our funding partners at the same time because they have different dates and, uh, the requirement to change to a fiscal year based on when our taxes are levied and collected would mean a very significant overhaul to our system. And the contemplation was, is that change worth the alignment to still be out of alignment with other entities that are not the school district or the state? And, and how does that actually impact what we know when we need to collect, I think there's the potential we would have to change our budget timing entirely.

And it would also offer our election cycle potentially, correct? Depending on who is, who is developing a budget and who's voting on it, that's also a timeline to consider.

Okay, so thank you everybody for staying a little bit extra. I think we'll run through the timeline quickly and then we'll end this work session. And you have seen much of this already. You know, 120 memo was published to the assembly September. The full budget is introduced to the assembly.

We deliver to the clerk on October 2nd, and then it's introduced at the meeting on the 6th. Through October and November, you will deliberate and go through our budget process, and then we continue to work on the numbers and update, update projections, etc., between November December and January, we get into finalizing the bond and ballot propositions, including all of the capital projects. By the end of January, they have to be set to go onto the ballot. And between February and April is when we do our budget revisions. The school district will be going through their budget at that point in time too, so there will be coordination back and forth, and then the mill rates are set in April.