Assembly Meeting

Yeah, good to go. Okay, it's 12 o'clock, uh, on noon on Monday, May 4th, 2026. I'd like to call the Petersburg Borough Assembly regular meeting to order. With that, would the clerk please call the roll? Chair Lynn.

Here. Vice Mayor Stanton Gregor. Here. Member Martin. Here.

Member Meechie. Member Newman. Here. Member Schwartz. Here.

Member Valentine. Here. Okay, we have a full assembly, um, in present in the assembly chambers today, and with that, I'll move on to the voluntary Pledge of Allegiance.

I pledge allegiance to the flag of the United States of America and to the Republic for which we stand, one nation under God, indivisible, with liberty and justice for all.

I have then one set of minutes on here to approve, the regular assembly minutes, meeting minutes for April 13th, 2026. The meeting for the clerk says the April 20th, 2026 minutes will be presented for approval on the May 18th agenda. And with that, do I have a motion to approve the minutes of the April 13th, 2026 meeting? So moved. Second.

Moved by Member Stanton Gregor, second by Member Valentine. All those in favor? Aye. Aye. Moving on here, um, I need a motion to approve the agenda as is presented.

I move. Second. Moved by Member Mucci, seconded by Member Valentine. Are there any amendments to the agenda?

Okay, hearing none, would the clerk please call the roll on the agenda as presented? Vice Mayor Stanton Gregor. Yes. Mayor Member Martin. Yes.

Member Valentine. Yes. Member Newman. Yes. Member Schwartz.

Yes. Member Meechie. Yes. Mayor Lynn. Yes.

With that passes 7 to 0. Today there are no public, public hearings on the schedule. There's no bid awards. And so for that, I'll move on to persons to be heard related to today's agenda. Is there anybody in the room that would like to talk about items on today's agenda?

If so, please come forward, state your name, who you represent, and you have 5 minutes. Thank you. Hi, Tom Kowalski speaking for myself, and, uh, I just learned this morning that the Alaska Department of Health, uh, just announced a $1 billion grant, and the grant is called the Safe Streets and Roads for All. It's for communities that need to redo their roads or make improvements, make them safer. We, we all live in, in places where we have to drive through some streets that are, are quite often plagued with potholes.

And then of course we have the dust we have to deal with when it dries up. You know, some of these issues, minor sometimes, are, are major issues. If you happen to be in an ambulance and you're driving down one of these streets, they got to put that IV in there and they do it while the ambulance is running. They can't stop and do it. That doesn't fit the role of healthcare when you're trying to be rushed to the hospital and get this medication into your vein.

And then the other part of that is, of course, kids riding their bikes. Seen a couple kids riding on my street, Cornelius, dodging potholes and not really looking out for cars coming because they're dodging potholes. It's just not a safe situation. So this grant, they're trying to give it away in $2 to $5 million blocks. And so, you know, it's out there.

I say go get it.

Another thing I want to speak on is about the data centers. And so there are— there's been some work done. I appreciate all the work that's gone into it to answer questions and concerns from the community. There's still a few questions I'd like to see answered, and one of those questions is What happens when we're restricted? I think I mentioned it before, when we're restricted by low water and the T-plant can't— TAE plant can't produce as much power as we need, or even when we're under diesel generation, how is that going to be applied when we're maxed out on power with the data center?

The other thing, the other part of that is what happens to our growth? The comprehensive plan, it mentions that we need to try and reach maybe 300 homes in the 10 years of this plan, and we're halfway through it. And, you know, I think we need another couple hundred homes. So is maxing out our power with this data center going to interfere with our ability to grow in the future? And lastly, what I'd like to say is Um, I am trying, just like all the rest of the residents here that don't sit in your seats, that don't have to make the decisions you make, we try to do is gather information for you and, uh, and bring issues to mind that do require some work on your part to fact-check and, um, and to act on.

And a lot of us feel like that's not happening, and when it doesn't happen, there's not a whole lot of transparency. Transparency and why it's not happening. It's discussions, this discussion keeps popping up, and I just wanted to say that, you know, we are your most valuable resource. We are the ones that do the work and point things out to you and your people. Without the people, you're nothing.

You're absolutely nothing. And if you don't give us the time of day, if you don't let us speak, if you don't have interactions with us, like a dialogue between you guys and us a long time ago with these towers, you know, maybe we wouldn't have another tower going up on Skylark now. So they're popping up everywhere. You know, you need to get ahead of this thing. We're still willing to work with you guys, still willing to have a work session, a real live— let's, let's figure this thing out and, and try and snip this thing before it gets too ugly.

Anyway, thank you very much. Thank you for your testimony. Is there anybody else who would like to talk to items on today's agenda?

I have 2 items that I'd like to discuss. My name is Joshua Adams, and I'm with the Planning Commission. Uh, the first one, um, has to do with the communications towers overlay. Before Petersburg had a clearly defined ordinance relating, um, regarding communications towers, Tidal Network bought whatever property was for sale around town. For the undisclosed purpose of erecting wireless infrastructure in Petersburg.

Now, GCI wants in on the deal. Before this thing turns into a free-for-all, we need to think about how, and more importantly, where we're going to allow towers to be placed in our community. It is a contentious issue. At some point, we have to stop looking at what is legally permissible and start seeking solutions. And that's why, for the last few months, we at the Planning Commission have been tackling the question How do we partner up with large corporations that have a vested interest in our community without getting exploited?

How do we handle something this big without becoming small? The communications tower overlay is a negotiated solution that works for everyone, but the assembly has to have the courage to say no to the current proposed tower sites. Only then can we provide an alternative that works for everyone. Another aspect of this problem has to do with land use. And this is important, and it's, it's, it's rarely mentioned.

A lot with a tower on it cannot have another type of construction because that property has to be 110% as wide as the tower is tall. It's a safety issue. These towers will eat up usable lots in areas better used for housing and commerce, and that's part of our tax base. A lot of us remember the flower farm out at Pat Keyes. If Tidal Network plops a tower there, It's all that will ever be.

A business like the flower farm fits well into a neighborhood. A 10-story communications tower does not. Let's be honest with ourselves. Steel towers debase the value of your land. People are already contesting their property assessments over this, and they're not wrong because they are losing the value of their properties.

The communications tower overlay is a solution involving a combination of borough and Forest Service land. That provides communications tower sites that do not debase the value of our neighborhoods. It's a win-win for everyone, including our partners. I have another subject that I'd like to talk about that has to do with Andrew Mazella and the new data center that's proposed. I don't know if I have time to get into that, if I should do that right now.

I want to say that Petersburg is at a crossroad. This is also a very important issue, and I may zig where other people zag on this, so buckle up. We have an aging, dwindling population and an economy with a single failure point. We've been asking ourselves for decades, without fishing, what are we left with? Logging, mining, seasonal tourism?

Petersburg is still staking its claim on a delicate environment-based economy with a single failure point. Many alternative businesses that we might attract are suffering from rising shipping costs. Our geographic isolation doesn't help either. Andrew Mazzella has found an answer to this niggling problem. He is offering us a new source of revenue and a means to diversify an economy that is precariously dependent on factors beyond our control.

Carl Hagerman calculates that we have somewhere around 2 megawatts of surplus electric power when it's 13 degrees outside. Right now we have a lot more than that. So there's a lot of unused electricity that we're selling back to Ketchikan. There is no advantage to not using that power in our community. Conversely, by making full use of our hydro-generated electricity, we can lower our electric rates and open the door to a new and sustainable economy for our town.

But wait, there's more. Most of the data centers in the Midwest are being built in Texas, where they're paying to get rid of their waste heat. Again, waste heat. Did you know that up to 30% of the overall electrical burden of a data center in Texas goes toward cooling the ASIC chips inside the processors? In Alaska, we pay for heat.

Every one of those data centers should be in Alaska. Those 2 megawatts of electricity that will service Mozilla's mini data center will produce heat, lots of heat. And pay attention because this is exactly what Wrangle is getting wrong with their data center. They simply gave land to a nameless corporation and said, "Go ahead and do your thing." No. Data centers are heat plants.

We should be integrating that with our public infrastructure so that we can take advantage of the enormous opportunity that this data center presents— free heat. We can plug directly into the ASIC chip closed-loop system that use this data center as a heat source for half a city block, and it's free. It's completely sustainable. Finland is already doing this. It's called district heating.

Look it up. Helsinki district heating. Anyway, we've been searching for a way to diversify our economy for decades, and we don't figure this out, it's going to figure us. So, hey, thanks so much for listening, and thank you for all the hard work that you've been doing.

Thank you for your testimony. Is there anybody else who would like to talk to items unrelated to today's agenda? Okay, please come forward, state your name and who you represent.

Michael Klein, I'm speaking for myself. Um, I just, um, a couple of months ago, Planning and Zoning worked on some ordinance language with, um, in relation to towers and even a little bit about data centers. I'm just wondering where the timeline on that is getting. I've inquired and I haven't got a solid timeline, and We have over 300 people that have actively invested in, even more that come and talk to us all the time about where we're at with the, the cell towers and things. And people really want to see some something on the books here, some ordinance language.

And I haven't gotten a clear timeline of when I'm going to— we're going to— we can see that on your agenda. And so I'm hoping that maybe you guys can push for when that is, because what's happening now is they're going to—. They're going up. You know, people— these companies are finding opportunities and wiggling in there and gonna have these towers up before we even have an ordinance that addresses them. So I'm hoping that maybe we can push, 'cause I know it's being worked on with the attorney and stuff, but it's been a couple of months.

And so I'm just wondering where we're at with that, because we're going to have towers up before we even have an ordinance. And I would really strongly urge that we see that ordinance language before you guys and the community before we continue negotiations on the fire hall parcel with Title. Thank you. Mike, I can address part of that. Tentatively, we plan— I plan to have that on the agenda if you can get through the attorney on the next assembly meeting.

Excellent, thank you. There will be 3— there'll be 3 readings of that, correct? Thank you for that.

Judy Omer, and today I'm reading for Rebecca Knight, who couldn't be here.

I was unable to be here today. Thank you for allowing a speaker in my place for a short statement. I joined many Petersburg residents in their valid concerns for our small community with the proliferation of proposed and existing cell towers and data centers on Mitkoff Island. A borough moratorium should be enacted immediately to put a hold on such expansion until the impacts can be better and fully analyzed. Just because the proposed Greenspark data center is perceived as small does not excuse it from adverse impacts on Petersburg borough residents.

The NEPA process— that's the National Environmental Policy Act— the NEPA process would force full disclosure and analysis of the impacts of these projects. The trigger for a NEPA analysis is if a proposal is likely to have, quote, significant adverse environmental impacts, unquote. Both cell towers and data center construction and operation qualify, despite any pass that the FCC may have granted for such projects. I request that the borough request full implementation of the NEPA process for cell towers and data center construction and operation. I believe Mayor Lynn fully understands the NEPA process as he worked with it during his career with the Forest Service.

While the borough analysis— borough's analysis is well-intended and informative, there are likely many issues that were not considered and that the authors are unaware of. That's where the public gets involved with the NEPA process. To raise issues that are— were not fully considered or even addressed. For instance, interference with existing uses, bandwidth limitations, network outages, geographic limitations, and accessibility are but some of the issues. The so-called low hum of the proposed data center facility should be better disclosed.

And of course, the potential for catastrophic fire as Emergency Service Director Hankins raised, should be thoroughly vetted. Of course, the developers paint a rosy scenario, as any developer would. These projects could well be just the foot in the door to other unforeseen impacts and connected actions. For instance, where are the impacts for a microgrid, as Greenspark may be considering? As you likely are aware, Petersburg opposition is not unique.

Uh, there is nationwide opposition to this new technology in communities and on the landscape, whether they are perceived as large or small. For instance, the city of Seattle is wisely in a process of enacting a 1-year moratorium on a large, uh, data center due to concerns over high energy demand, environmental impacts, and increased utility rates for residents. The state of Maine is enacting a similar moratorium. There are plenty more. In the works.

I request that the Bureau consider a moratorium until these issues surrounding such developments be thoroughly vetted via a NEPA process. Sincerely, Becky Knight. Thank you for your testimony. Anybody else who would like to talk to items on— related to today's agenda, please come forward, state your name and who you represent. Related, related, related, related.

Yeah. Anybody else on related today's agenda?

Seeing none, is there anybody on Zoom? Yes, I do have Andrew Mazzella has his hand raised. Okay.

Hello, can you hear me all right? We can, Andrew. You have the floor. Good afternoon, Andrew Mazzella, CEO of Mazzella Alaska, here, and I wanted to say a few words regarding Assembly Item D, Maritime Prosperity Zone. I have discussed this topic with several assembly members as part of a larger vision I have for Petersburg that would cement the prosperity and recognition of Little Norway as one of the greatest waterfront communities in the world.

In their last several meetings, the Wrangell Assembly has been positioning itself as a candidate for a new Coast Guard icebreaker home port, part of the reason for them designating themselves as a Maritime Prosperity Zone along with Ketchikan. The fact that Petersburg was not in the discussion to be included in this is a slight at best, and in business, what we would consider an act of war amongst fierce competitors, and I do not exaggerate by saying that. When it comes to big-time federal government contracts, investment, and trickle-down prosperity for the entire community, we are not sister cities, as an assembly member stated in the last meeting. And that was certainly not the mindset I or anyone I grew up with in Petersburg had when Coach Schwartz and Coach Brock took our teams around Southeast crushing opponents and looking to win regionals and then state, which they successfully did during my formative years. They were not looking to be friends with these communities, but rather come out on top.

That is what a true business mindset is, and that must be what it is to survive at the scale of my company, Investment Petersburg, and the Petersburg Borough leadership. You guys are running a a large business. Additionally, excuse me, additionally, the fact that Petersburg staff and leadership has not proactively and previously pursued this maritime designation is an abject failure of their duties looking out for the best interest of the borough and its citizens by taking advantage of these opportunities as they come. I began pushing this issue multiple months ago to local government as well as with state and federal government leaders, literally anyone I can get in touch with. And even still, I'm doing the same.

I'm working on getting a meeting with President Trump directly regarding this, as well as, um, Secretary of the Department of Homeland Security, who oversees the Coast Guard.

And today I'm publicly stating what I intend to spearhead as a private developer, hopefully with the full support and resources of Petersburg's governing bodies staff, and community starting right now. To be very clear, the points I previously mentioned are not intended to be unconstructive criticism of anyone, but rather a wake-up call that we need to act right now for the future of Petersburg, and the clock is ticking. The federal government weeks ago announced two new icebreakers would be homeported in Alaska, but the locations are yet to be determined. What that means is they're looking at locations and potentially have top contending waterfront communities already identified as we speak. The reason I bring this forward today is my company, Mazzella Alaska, owns objectively the greatest existing icebreaker home facility in the state at our pier and deepwater dock and infrastructure between Middle and North Harbors in downtown Petersburg.

With the current 300-foot mooring face, it is one of the only appropriate size facilities I know of that is needed and can be expanded even further onto tideland that I privately own, increasing the size ship that can dock there, specifically if needed for an icebreaker. Neither the borough nor any other private entity owns anything close to the specifications needed for a Coast Guard icebreaker that this facility already has. On top of that, the office, housing, warehousing, and additional moorage make this property what should be the number one contender for an icebreaker homeport in Alaska. The level of investment that an icebreaker homeport would bring to Petersburg is on a scale that most people cannot comprehend— hundreds of millions of dollars. This would not just go into the port itself but help with one of the biggest issues in Petersburg, which is housing.

The crew and families of a new homeport would require a significant development of new housing, and on a scale that would allow my companies and other builders to develop potentially a whole new subdivision with possibly tens of new homes in addition to what is needed by the Coast Guard. This is the type of scale that is required in order to make a dent in the housing issue due to economy of scale. What that means is affordable houses are very hard to pencil out due to the tight margins of making them affordable. However, if we're looking at, say, 50 houses, just as an example, it would make a lot more business sense, and that is what is needed to get affordable housing built. In summary here, a key point is regarding— excuse me— a key point regarding the intention I have for an icebreaker specifically is that this is in no way competition, nor does it take away from any of the borough projects such as Skow Bay.

And also, in addition to, for example, Coast Guard cutter or other class of ships the Coast Guard may want to bring into Petersburg's other harbors. It is, however, directly competition with any other community in all of Alaska because this is a top dog is going to win these— one of these two homeports. I'm at the full service of the community and the assembly and the staff of Petersburg, and I look forward to immediate future discussions regarding this topic. And thank you for your time. Thank you for your testimony.

Is there anybody else would like to talk about items related to today's agenda?

Hi, Lisa Browning speaking for myself. Um, I think this is probably already one of the questions that might be asked, but this is just perfect timing with Mr. Mazzella's statement. And what happens now when that 2-megawatt transformer is committed to the data center and now we're developing the property, we're bringing in additional homes? Where's that power going to come from if we're maxing out the third turbine at Taiyi already? Or, you know, it's not even built yet and that's already what's going to power this transformer, where's all the rest of that power going to come from?

So just curious. Thank you. Thank you for your testimony. Is there anybody else would like to talk to items related to today's agenda? Okay.

Is there anybody else on Zoom? No, there's no one. Okay, thank you. With that, I'm going to move on then to items unrelated today's agenda. Is there anybody that would like to talk items unrelated to today's agenda.

Yes, hello, I'm Joni Johnson, a Forest Service invasive species coordinator, and I just— for awareness for assembly members in the community, there's some upcoming work that will be happening on Lower Raven Trail. There are a couple of maintenance issues. One, of course, that I'm interested in, just the invasive plant spread that's heading up to the cabin and then vegetation contributing to erosion. So really, there's an invitation, there are a couple of opportunities. There's a manual workday the 8th and 9th of May, and then there's an Adopt a Trail program.

You can reach out to me for that. But also, I wanted to let folks know that at some point in late May, the lower trail will be closed for a day to allow for localized foliar spot spray or wiping of just reed canary grass in a few places along the trail. So it's kind of a— there's grubbing, there's pulling, and then there are a few places where we'll be doing some herbicidal treatment with Roundup Custom, um, low volume and contained. But I wanted everyone to know that, and it will be posted and announced on KFSK. But let me know if you have questions, and you being the public as well.

Thank you. Thank you for your testimony. Anybody else would like to talk to items unrelated Please come forward, state your name, and do you consent? Hello, my name is Stephanie Payne, and I am speaking today on behalf of the Community Center and Parks and Recreation. As you all know, we've been dealing with the Aquatic Center sewer issues for many years now, uh, with respect engineering, and it has been a very long and arduous process that has included many people and departments.

We would like to thank the assembly manager, Giesbrecht, Jody Tao, and our community members and patrons for their ongoing support and patience as we work through it all. Our Public Works Department have been with us since the beginning trying to diagnose the underlying issues that we were experiencing. This includes Martin's crew along with our wastewater team. Petersburg Municipal Power and Light crew along with Carl and Steve Harbor have been working diligently, diligently with us and Mattingly Electric to understand the electrical complexities that we must navigate through. Ketchikan Mechanical has teamed up with Rainforest Contracting to conquer the project and attend numerous meetings to ensure that we are all working together to to get this project moving forward and ensure that we are in good hands.

The school and VSC have graciously prepared to alter their schedules to accommodate the project schedule, understanding the need to be flexible in order to make it happen. Deverin at HomePort Electronics will be helping us safeguard our computers and set up a workstation to help receive our patrons in a safe location away from the project site. And most of all, the Parks and Rec staff for working around our facility deficits and deficiencies to the best of our ability while accommodating our patrons the best that we can. Some of you have seen contractors moving around the Aquatic Center this week, including— this week included, as we conduct our ground penetrating radar session, and you will see more to come. Rainforest Contracting will be beginning their work at the facility on Monday, May 18th, so please continue to be patient as we work through this project throughout the summer months.

We understand the numerous benefits of our aquatic center for our patrons, and we will have the center open when and only when it is safe to do so. This project is a moving target, and so we are really not able to give a set schedule or a timeline as to when patrons will be able to use the facility. And this again is just on the aquatic side. The gymnasium side is all going to be the same. In the very near future, we'll use— you will see a different check-in location and process, and we will keep everybody informed as we go.

This project timeline is May 18th through August 29th. Again, we thank everybody for their support and their patience. That's it. Thank you. Thank you for that presentation.

Anybody else like to talk to items unrelated to today's agenda?

Okay, anybody on Zoom? No, there's no one. Okay, I'll move on then. Today there's no board, commission, committee reports. Then I'll move to the consent agenda.

On the consent agenda, there's 3 items for the— on today's agenda, and I will take those one at a time. The first item on that, on the agenda, is the Moose Lodge Club alcohol license renewal. The Moose Lodge has applied to the Alcohol and Marijuana Control Office to renew their club alcohol license. Namco has determined the application to be complete, and a local governing body may support or protest the renewal within 60 days of the notice of filing the application. Do I have a motion to approve the renewal of the Moose Lodge alcohol license?

So moved. Second. Been moved by Member Stanton Gregor, seconded by Member Martin. Any discussion?

Would the clerk please call the roll on the renewal of the Loose Club Alcohol License. Member Michi? Yes. Member Schwartz? Yes.

Mayor Lynn? Yes. Member Newman? Yes. Member Valentine?

Yes. Member Martin? Yes. Vice Mayor Statton Gregor? Yes.

Thank you, that passes 7 to 0. The second item on the consent agenda is the El Zarape LLC license renewal. El Zarape has applied with the Alcohol and Marijuana Control Office to renew their restaurant eating place license. AMCO has determined the application to be complete. A local government body may support or protest renewal within 60 days of the notice of filing the application.

Do I have a motion to approve the renewal of that license? So moved. Second. Moved by Member Valentine, I think, by Member Martin. Second by Member Martin.

Any discussion?

Okay, again, would the clerk please call the roll? Member Newman? Yes. Member Valentine? Yes.

Member Martin? Vice Mayor Stan Gregor? Yes. Mayor Lynn? Yes.

Member Meechi? Yes. Member Schwartz? Yes. The appro— that approval of Elger Office license renewal is approved 7 to 0.

Last item on the consent agenda is engagement of outside counsel providing bond counsel services. Finance Director Tao requests approval of Kutec Rock LLP for bond counsel services to provide legal support and ensure compliance with applicable laws for the borough's bond financing activities. A letter from Kutec Rock is attached. Do I have a motion to approve the engagement of, of Kutak Rock LLP for a bond— as bond counsel. So moved.

Second. Okay, moved by Member Valentine, seconded by Member Stanton Gregor. Discussion? And with that, I think Jody would probably be good if you would kind of give an overview of what the intent is here and why we're looking for bond counsel. Sure, our past bond counsel, Cindy Cartledge, she has retired and there are no other bond counsels in Alaska actually that work on issuing GO bonds.

So we had to go outside. We were recommended by the Alaska Bond Bank, a few different companies, and this is the one—. Oh, I've—. Sarah Heideman and myself have talked with Kutak Rock. And we support hiring them for this position.

So in the short term, this company will help us with issuing GO bonds for power and light for the rest of the standby diesel generator money that we need. Further questions? Member Muci. Thank you. How do we—.

Is the fee that we pay this based on the bond that we're going to be putting up? Yeah, it'll be a fixed amount, um, most likely, and that will come before the assembly to approve as well, and it will come out of the bond proceeds when we issue them. Thank you. Other questions for the finance director? Okay.

Dean Nunn, would, um, the clerk please call the roll on engagement of Quebec Rock LLP For law and council service. Member Martin? Yes. Member Valentine? Yes.

Member Newman? Yes. Member Schwartz? Member Mucci? Yes.

Mayor Lynn? Yes. Vice Mayor Stanton Gregor? Yes. Okay, and the approval passes 7 to 0.

Moving on to the report of other officers, uh, the first is there's a report in here from the Petersburg Medical Center, uh, I don't think that the CEO Hofstadter is here today. He did send me a note just a while ago that we have received— or the hospital has received a certificate of need of approval for the MRI machine, and their intent is to have that operational within— at the hospital within 30 days. So moving on to that, uh, second item on here was a report from District Ranger Case on Forest Service activities.

Hi, good afternoon. My name is Carrie Case, for anybody that doesn't know me, and I'm the District Ranger here in Petersburg for the Forest Service. I wanted to say thank you to the public that turned out on April 23rd for our forest plan draft content community workshop. It was well attended for a sunny day, so I appreciate people making that sacrifice. Um, we are currently at the end of the 45-day comment period, and so we're at the beginning of this process, um, for the draft content related to what will eventually turn into an environmental impact statement for a new forest plan.

That comment period ends on the 6th, so coming up on Wednesday. After that, there will be a 90-day comment period when the draft environmental impact statement is released. Um, I did want to let you know if the borough would at any point in time like to have a meeting with the forest plan team, I can set that up. You can ask questions, um, and things like that. So I wanted to put that out to you.

Um, if there was interest in that, um, please let me know at any time and I can facilitate that occurring. Um, we are accessing our new building starting today. We will hopefully be having our first day of work downtown in the new district office on the 12th, so next Tuesday, and hopefully back open to the public on the 14th. So we're excited about that. We really appreciate the great work the contractor has done throughout the, the process of renovating that building, and we are in the process of moving back downtown, all of us.

Everybody that works for the Forest Service will now be located downtown starting the 12th. I wanted to put just a plug out there. Roads are opening up, weather's getting better, which is nice. Rec sites are being used. I know that trash, garbage is always an issue.

We do have staff that goes out at least once a week to our rec sites. If there is overflow of garbage, please don't set it outside of the garbage container. Please, if you can take it with you, pack your, pack your trash out if those are full. That would be great. We do try to provide a clean, you know, well-maintained service to folks at our existing rec sites, but if garbage is left out, animals will get into it and it will get spread around.

So that's just a plug as you start to enjoy your time out the road. So that's all I had for today. Do you have any questions for me? Any questions for Member Valentine? Um, everyone's moving here.

What happens to the building out there? Still Forest Service use? It's going to be converted back into its original state, which was a warehouse. Yep. Okay.

So yep, we'll, uh, convert that back into cages and storage space. And there'll be a few, um, if, if we get to a point where we start to hire folks again and exceed the capacity of the building down downtown, there'll be a few workstations out there. But basically we're kind of consolidating our footprint, and all of our storage will be out there. Yeah, thank you. Other questions for Ranger Case?

Thank you, Carrie. Appreciate it. Moving on here, uh, next item on the agenda was Petersburg School Superintendent Robin Taylor will present a report on school district activities. Robin, you've got the floor. All right, well, for those who don't know, I am Robin Taylor.

I'm the superintendent for the Petersburg School District. Not a lot of new information to report, just we're excited as the year is wrapping up. We just have a few weeks left. It is Teacher Appreciation Week, and so I would encourage anyone to reach out and thank their, their student's teacher or teachers who, like Mr. Schwartz, who have worked with our kids over the years. And I just also like to note in there, it's not just the teachers who are pouring their heart and soul into our students in our, in our school community.

It's It's also the secretaries, the support staff, and so the custodians, the nutrition program. So just thank the, thank the staff members as you see them, because they do, they do all want what's best for our students. Speaking of students, we have music programming coming up here this week on the 7th and 8th. The 7th, the 3rd through 5th grade concert will be held. On the 8th, the kindergarten through 2nd grade concert will be held, and also the morning of the 8th, is our Teen Health Fair.

Then the middle and high school will be the week of the 18th. So on Monday the 18th will be the high school concert, and the 20th Wednesday will be the middle school concert. With the seniors' graduation already coming up on June 1st, Monday, June 1st. So just want to make sure if you're looking, if you're looking for just a full calendar of events, you can go to the pcsd.us website to to really get a calendar for everything that's happening, because even though we're in spring and getting ready to shut down for the year, we still have a lot of events taking place between music and baseball and track. There's a lot happening.

So, so again, just, just want to give a plug to Teacher Appreciation Week and all that our staff do, but that's really what all I have to share this week. Any questions for Superintendent Wheeler? Thank you, Rob. Appreciate it. Have a great day.

I'm gonna move on here. The next, next part of the agenda is the Waterworth presentation on the fiscal year 2027 electric and wastewater rates. And so with that, I think I get to turn it over to, to our utility director back here. Is that where it goes? Okay, on the line.

Yeah, I'm not sure who's in charge here, Carl, but with Mr. Mayor, I think it's appropriate for our representatives from Waterworth to make this presentation. Okay, thank you. Go ahead. Thank you.

Thank you for inviting me here, and we really appreciate it. Gabe and I were both part of the client success team at Waterworth, and Carl is definitely in charge, sir. This is based on his and the team's projections for both the electric side, and then Aaron has been helping us a lot with the wastewater side. We've been working with the community of Petersburg for the last 2 years, and we were— we had also presented in last year's budget for in terms of the rate recommendations that the staff had recommended. Now, the idea for today and the goal is to walk through both the wastewater and electric models.

Before I do that, just to keep it short and simple, Quick context is that Waterworth is a forecasting platform that allows the city staff to really look into their rates so that they can have a more financially sustainable model out in the future without really cracking into affordability. And the way that we do that is this concept that we're practicing right now, continuous revenue management, where we look at a live financial forecast model, which I'll show you shortly. And second, is also having these meetings in a— on a continuous basis to make sure that everyone is well informed so that they can make those decisions. With that, I'm going to begin and share my screen.

I'm assuming that everyone also has a packet in front of them, uh, presentation packet. Perfect. I'm going to go over the live model, but those in the packet, you have screenshots that are based on these models. I'm going to start from the wastewater side, and I'm going to start breaking down the baseline model. When I say baseline, that essentially means after we did the rate increases of last year, around 25%, uh, for '26, what does the future look like if I do no rate increases and based on the capital needs, operating needs, and the debt service needs that we have moving forward.

I'm going to break this model down, this baseline in front of us, into 3 steps. So the first one is going to be our revenue requirements. I'm going to start out with our operating expenses that you can see over here. We have taken historical data all the way back to 2022, all the way up to '26, and then the budget on from '27 onwards. We have a 3% growth rate in there, and that's why you can see a larger increase that happened between '25 and '26 onwards.

Next, I'm going to layer on top of this our current debt service. You can see that by layering on top, we can see another line of expenses up here. 2027, We're expecting to pay about $147,000 in current debt service existing in our books for some of those projects that we're going to be funding out in the future. Like the Scarborough Pump Station, that's going to be needing to be funded by debt, uh, especially. So we're going to see our debt, proposed debt for the upcoming years, rise up to $575,000.

Now this is a significant portion of our revenue requirements. You can see both of the debt services together are almost making up the same proportion to our operating expenses, about 60 to 70% of operating. So that means that We have a lot of expenses coming in that are necessary to make, make sure that we are delivering a level of service that the community deserves. Beyond that, you can see that we are surrounded by 3 peaks. One is in '25 that relates to our Pump Station 4, the force majeure, about $3.4 million.

Then we have Scarborough Bay, which is $5.1, including other smaller projects that make up about $7 million that is coming for FI-27. We also have in 2030, which is the affluent disinfection, uh, for the wastewater treatment plant. So these 3 are some of our larger projects that make up these peaks. When I go into the revenues, you'll realize that we also have some good grant funding that came in for the $10 million, which is awesome, but we still have some other big projects to cover. Which need our attention.

So what I'm going to do next is go into part number 2, is our revenues. We have our sale of service that refers to our user fees that we take on, the fixed and variable fees. Then we have other operating revenues that could include some of the interest side, non-operating, that's, that's the interest payments. Again, they're very slivers on top, they're not really moving the needle as much. The bigger portion of these two is our borrowed funds, which is the external loans that we're taking out in the future and some reimbursements that we're getting back for some of those projects.

And you can start to see them start layering across those mountains in the back that we have. And finally, we also have a grant funding aspect to this, which is the blue line. And you can see how we're getting a good solid grant funding for our $10 million project for the affluent disinfection. So together, when you take this picture combined, you start to notice two aspects. We have our revenues, which is those buildings at the foreground, and then you have our mountains in the back that represent our expenses.

And while spectating that, we also noticed that in '28, '29, there are some gaps also in 2031, 2032, and so on. These red boxes that I'm highlighting for us is, uh, showcasing deficits in our budget where we're going to be using up our reserves to help cover that gap. And that's going to take a toll on our cash position if we do not do anything with our rates beyond this point where We're just going for 0% rate increases, or maybe like, uh, 3% might change a little bit, but it's not gonna change it too much, which is where we'll go into our recommendations. And if I go back and look at our cash position, you start to notice that the cash position over time, because of those deficits that happened in '28 and '29, especially with the pump station of Scarborough Bay in '27, we start to really use up our cash, which is starting at $772,000 and ends up below zero by the time we get to 2029. Even before that, you have an operating threshold, which is— forget '29, we have to also focus on '28, where by the time we get to '28, we're sitting at $633,000, which is in line with the operating threshold that represents about 3 months or sorry, 4 months of our operating expenses.

Now, this is an important threshold that we set for ourselves. I'm sure from our last presentation, remember that this is to make sure that we have a small buffer in place to make sure that we can cover any unexpected operating expenses moving forward. So us being below this, it's a scary situation. We want to always stay above it as much as we can. Awesome.

So to bring it all together, when we see this whole picture, we realize that, okay, our cash position is definitely going down if we do nothing, let's say in '27 beyond. What can we do to really rectify this position and make sure we stay above the threshold as much as we can? This is where Carl, Aaron, Jodi, and the rest of the team have really focused hard on making sure that we look at these models because in our last recommendation that we had, in for the FY26 last year, it was looking like 25%, which we, which we did do. It was also looking at 60% because there was a large increase, especially with the pump station, and we decided to spread out those increases so that we don't, we don't affect our residents too much with a huge rate hike. With that in place, we had another model where we were able to really flatten out that cash position and ensure that it stays above the operating threshold at all times at a respectable value of $900,000.

So we can also tackle any unexpected capital expenses if it does come about. The way that we are tackling this is via the rate increases, and you can see how those— this city sky picture is getting really covered up. And it pertains to— and I can pull up our packet for now, it right here— it pertains to doing, uh, larger rate increases, about like, if you talk about percentages, they can go up to like 20, but it's very similar to what we did last time. And this is what the recommendation will look like from the current rates to the proposed rates. When it comes to our final impact, where if you see a 4,000-gallon user, they see a $12 increase in their bill.

And this is the breakdown that I have in front of us. I'm going to pause here for a second in case you have any questions, and we can tackle them before we head out and look at our electric fund. Any questions? Mr. Meechan. Yes, thank you for the report here.

So just to be clear that we raised the rates 25% in '26, and between 2027 and 2031, we're going to be looking at combined rate increases of 53.5% increase over those 5 years.

Yes, there is, if you combine them all together. Yes, that is the— that is a correct assessment, and we hope to really reduce it down to about 4.5% like we have it, and I'll show you later on the electric side. It's to prevent any rate hikes in the future. Yep, thank you.

Other questions? Member Schwartz? Trying to catch up here, but we have all the increases now and I'm not quite getting it. Essentially, that's what it is. That's what they're trying to—.

Now, if I can use Aaron as well, it's not necessary that we need to have all the increases in there. Part of what Water Works does is we'll try to look beyond, let's say, next year's budget and say that if we have the 20%, 25% increase, or rather the $12 increase in a regular bill, we're hoping that we could start reducing these hikes in the future if the current plan stays. I mean, unless we add a lot more projects that can change our view, that's the continuous piece where we want to make sure we get updated information. So it's a choice really that if you want to, let's say, lock in some rates for a couple of years or look at these rates every year. And Aaron, please, you can help me out here as well if you want to shine some light on that.

Go ahead, Member. Well, the utility rates that we increased last year, a little bit shocking to people, and heard quite a bit about it. I'm getting better at listening, but now we have another increase that I'm sure we're going to hear about, and I'm trying to figure out the reality of this whole thing, but I'm glad you're sounding chipper and happy about it. I know it's just your job, but it's, it's hard to listen to. Thank you.

I have a question. Other questions? Member Valentine. Yeah, thank you. Good presentation.

These are just for water, what we're dealing— what we're talking about currently. So everybody in the public— wastewater, wastewater, wastewater.

So, I mean, these are just big jumps because we have big projects coming, right? And it could do this again and again and again, so long as Petersburg is investing into our future, right? So we have Scout Bay, and we're hoping that that will also generate revenue to help probably offset this. But right now we're putting in all the taxpayers because this is just proposal, not saying that we're doing anything. Could we do the same thing where you have here a projected model of 2027, uh, 20% 28, 15, 29, 7, 30, 7, and then 4.5 moving on.

If you took that same 50-some percent that, uh, uh, Member Muci said and change that up and, and spread that out so these aren't big hikes right off the front, I mean, it still will ultimately end up in the same position, right? If I took that 50-some percent and spread that out instead of it looking 20, 15, 7, and 7, it could be 10, 10, 10. Yeah, I mean, no one likes rate increases, but the reality is the reality. So I just want to know, will we be in the same position being above that threshold if we do it that way? Thank you.

And that is something that we can play with scenarios with, and that's where Waterworth comes in. I just want to address it. It's, uh, When it comes to like these rates, initially there was even a proposal last year that we were like, let's rip the Band-Aid off and do 60. And when I say 60, I don't, I don't mean that light. It is quite expensive.

And I do realize that if it comes to anyone else's bill, it's looking, especially when our fixed income, that can be quite shocking, right? When it comes to financial planning, it's never an easy thing to do rate increases. The goal of what we try to do here is, as, uh, uh, I— you have mentioned, is try to level it out as much as possible where you can have those 10%. Now, if you do go ahead with, let's say, a 10% scenario, this means that this 10% will extend for a longer time, right? It won't just stop at, let's say, 4.5 in 2010.

If you do 10s across the board, this— it may last until, let's say, 2033. Something that we can run separately as well and see what the impact will be and how long will certain rate increases last for. Right. Thank you. Yeah.

I, you know, this is just one of those things, but I think sticker shock is worse than the longevity. Cause you know, for the, yeah, I understand what you're saying. I mean, just 10 would last longer, you know, you hit it now and then it drops later, but no matter what, if you still look at that, all those percentages still mean up. Right? And it'd be great to get to a point where we don't have to.

And also, that said, the cash— the cash position. Yes. So the threshold is just making sure we have the 4 months expenses, and then you have a cash position of us at the $900, if I remember right, $900 level. What if our cash position was like $600 or $500, right? Why does it have to be so high?

I guess is my question. And that's an excellent point, sir. That's something that can also be reduced. It's just that one thing that, uh, Aaron and I had discussed, and with Carl as well, is the fact that if you look at this particular presentation, I would hate the fact that if I came to everyone, let's say year over year, they were going with this particular plan if approved, and we didn't try to address the possibility that there might be some spikes here. See what I mean?

Like, the future beyond 2031 may have some project— may have some spikes which may cause us to use some of our reserves. So in anticipation of that, it's good, it's good to keep a slightly higher boundary. The second point, which I should have mentioned earlier, is also on unexpected capital expenses because with the operating threshold that I showed you was for any unexpected operating expenses, but you want to maybe stay a level above that, which will allow you to also tackle any unexpected capital expenses that may come about in terms of debt service. But if the staff and the community feels like, you know what, we're fine $500,000 to $600,000, then I'm sure we can also tailor the rate structure to make sure that we can meet those requirements. Okay, thank you.

I think, uh, electric is going to be—. I believe the manager is questioning or commenting really for Waterworth or Aaron, um, or Carl. Um, when we talk about rate increases, the percentages are more accurate, but the assembly would probably— it would probably mean more to them what does the average bill do. And I think you kind of mentioned that a couple times. I think that bears repeating.

Is what the average bill would go with these recommended percentage increases. Um, because the percentages sound really, really bad, and not that any rate increase is good, but the actual value of what's going up isn't anywhere near as bad as what's running through all of our heads right now. Anyway, just that would, that would be helpful to the Assembly, I believe.

100%, And that's why, uh, the slide that I am showing right now is looking at our changes in the bill, and you can see over there that for the average user, 4,000 gallons, we're looking at the current bill that currently stands at $62.54, and it'll be going up if you do, let's say, a rate increase with the proposed rate changes at $75 to $75, which will be $12.51. Somebody hear that? I mean, yeah, yeah, but we're talking about that big increase is $12.51 per average user. Yeah, thank you. Again, I mean, I just want to make sure the assembly hears that.

Noted. Thank you. Thank you. I have a question, might be for Aaron and or, uh, Carl, on that, the back to the graphs of the 3 major projects, we're going to have to go out, we'll have to bond for those 3 projects. So what this— what your rate increase also shows, the— shows what we need to pay those bonds.

I can take that one unless Aaron or Carl want to. It does include, uh, and those expenses are a real burden because if you do take out a loan for them, you end up with the debt service that I'd shown in the model where you have the current debt service that is the lighter— sorry, the darker blue— and the lighter blue is a proposed debt service of about $575,000, almost $600,000 to $700,000. And to address that additional debt that we're undertaking, we need to make sure that our rates are also able to cover those. In the future.

And as you saw, that shows— I, I can't read the numbers on there, but that debt service thing goes out for 20 years. I can't remember the—. It goes up to about, uh, about, let's say, 12 to 15, 12 to 12 years roughly, 12, 13, to 2037. And, uh, the actual debt itself might be beyond that, but in the model I've stopped it at 2037.

Other questions from the assembly? Okay, I don't see any here. If you would like to move on to talk about the utility side of that, would be great.

Perfect. Thank you so much, and I will move on to the electric side.

For electric, I don't think we need to again break down the model, but we did have, let's say, a smaller rate increase. It's going to be a very simple, uh, simpler model. We definitely have some big expansion projects that are currently in, and the model that I'm showing right now again is with those 3 components. So just to speed, uh, this process up, We have our revenue requirements that consist of our operating expenses, our services. We have our current debt service, proposed debt service, capital improvements, capital expansion.

These are our revenue requirements altogether. Again, we have put a placeholder of smaller capital expenses out in the future, but not too many. And the idea is that we can start adding them once we get more intel. And make sure that we have those larger projects in there. The next aspect, which is step number 2, is looking at our revenue.

So that's sale of service. You can see that we're doing really well up until '28, but you can start to see there's a big shortfall, especially in the debt service. Even if I were to remove capital and capital expansion, we're falling short of our debt service payments. So definitely something needs to be done with our rates. And then you have other operating revenue, developer contributions, again, very minimal.

And then you have grants and borrowed funds that are helping us fund those big projects. The recommendation here is to go with about a very small rate increase, but 4% or just like $4 to $5 that are coming in for our different accounts. And you can see that by adding a 4% rate increase, we're able to really sustain our cash positions. If I just highlight the cash, before in the status quo, we are, we are seeing ourselves, if we don't do anything beyond a certain point, by 2032 we're running out of cash. While if you just maintain small incremental rate increases, we're easily above, above our operating threshold.

We're staying at around the $3.4 and $3.5 marker, almost reaching to $4-5 million in the out years. And the reason why we see an increase in the cash position in the out years is because if we just keep steady rate increases, we're able to really reach our certain targets and also have a little bit of slack for any capital projects that— oh, that drawing— any capital projects that may happen out in the future.

I'm going to showcase the rates now, and these were the different rate changes. And in terms of the difference of the bill, it would be about $6 for the average user.

Questions from the assembly?

Member Meech. Yeah, thank you. Um, if we increase our sales of electricity by $1 million or $2 million a year, does that bring this rate increase down at all?

Uh, and are you saying because based on consumption, like if consumption were to increase in kilowatt-hours, then how would it affect our rates? Yes. Yes, if that was the case, and, uh, maybe Carl, you can help me here, is that if our consumption increases then you would end up seeing your rate increases drop. However, I would also ask Carl, and we would have it in our review sessions, to make sure that if a consumption is increasing, does it mean you have to reinvest into the community even more to make sure that we can maintain that increase in consumption? So that would affect how much our expenses would look like, essentially.

Through the mayor. Um, Arman, can you show the— you have it handy showing where we had the— where we looked at $1 million more in revenue and $2 million more in revenue? Uh, maybe, yeah, start with the 2 where we show an increase that we plan this year because we don't know what's going to happen. But if we got that, we'd be at 0, 0, and What, like 1.5% increase? I think— was it with, uh, to do with the data center revenue?

Yeah, I believe that was just Assemblyman, uh, Mucci's question. Yes, and that would mean that our rates— we even challenge it even lower to make it 2.5%, or it could even drop further down because you can see that the cash position looks a bit different. With our revenues increasing. So you may have to do zeros and/or 1 or 2%. So yes, that would impact, and we have mapped a scenario for it.

Thank you.

Can— does anybody—. Oh, sorry. Does anybody remember from last year what we raised it 4% from— I remember this presentation. I don't remember all the numbers. I can't remember what we moved from '26 to this proposed '27.

Or so, I guess you guys know what I'm asking. Carl, would you—. Through the mayor? So last year's increase was 4% in the electric utility. Okay, 4%.

Yes. Okay. And that had clearly nothing to do with data. Okay, sounds good. Included a major revamp of how our rate structure is applied.

We had a declining block rate structure. We went to a single rate for each customer class, right? So there was a, a big change there just in the fact that it was a different way that the rates were applied. And if I remember right, it was a little bit more to the residential, but in the long term it evened out with kind of Uh, can you help me finish that? It was a big change, and it really depended on how much, uh, any customer's usage was, how it affected their increase.

It was a, it was a very difficult concept at the time, but this year, because we have single energy rates for every customer class, it's much simplified. So the 4% that we're seeing this year is very easy to calculate and see the impacts of.

So, through the mayor, we, we did it that way to see how it panned out instead of asking for a, a multi-year rate increase. The same thing this year, we're looking at one year because there is potential for new revenue, not only the data center, the mill out on Falls Creek Road, and some housing developments. So instead of locking in higher rates than we need We're going to look at it year by year for a couple of years. And then, um, sorry if I'm make— I want to make sure I understand this fully. These 4% on top of what SEPA is going to propose to us, right?

So if SEPA were to bring it up, that's 4% on top of whatever SEPA is selling to us, right? That's, that's technically correct, although SEPA is not planning on any rate increases in this year. This year, but for the future could— like, I, I'm going to throw random numbers out there, but from, like, uh, you know, giving it to us at 15 cents, and then we put 4% on top of that, and then maybe one year they come back at 20 or 20 cents per kilowatt, and then we have to put 4% on top of that, right? So it still does have to do with SEPA, uh, with this, right? Mayor, yes and no.

We know what the rates are going to be, and then we figured out our budget and what we expect to sell and what we have to pay for that power. So it's, it's not necessarily if they go up 2%, we're going up 2%, right? If we have more revenue, we may be less than the 2%, or depending on our expenses and any debt we take on, it could be slightly above that. OK, it's not a tit for tat, sorry. And through the mayor, I'll just point out that the, the same scenario that helps a larger The scenario of a larger revenue stream for PMPL helps to stabilize rates and reduce future increases.

The same is also true for SEPA. The more power that SEPA sells to member communities, their wholesale rate also stabilizes and they can push that wholesale rate without any increases for longer. Okay, so my last little statement here is that And I'm sure we'll talk more about data centers later on today, but this 2 megawatt, okay, this 2 megawatt was, was used as a, at a cannery. It was already previously used at a cannery. So if you replaced the data center, the word, and put it a cannery, this still, this scenario still stands true.

We are selling 2 extra megawatt to a consumer of 2 extra, assuming we have the amount of energy to do so. Right. Okay. Do we do have that energy? And yes, you're correct.

Okay. Thank you.

Other questions?

I can see a lot of heads nodding here. Um, with that, um, is there any other parts of both rate studies that Um, either Carl or Aaron would like to talk to—.

Mayor, just one other thing. It, it did look like Power and Light was getting really fat at the end of that, but as they pointed out, that's not considering any capital projects past, uh, 2032, which is unlikely. We're done. Yeah, it's not We're going to have to put money into something.

Yeah, do another generator. Yeah, right. Yes. Okay, don't— I don't— there's no other comments on this. Mr. Mayor, go ahead.

Yeah, thank you. You know, there was a little bit of discussion here about maybe adjusting that rate. Is that something that the assembly wanted to have brought back to us, or— I mean, we had a little bit of discussion about it. Are we just gonna let it— are you thinking about going forward with it, or do we want to talk about it another time? But yeah, this is just proposal.

I know that, but I mean, did we want staff to bring us back some additional information on what a rate increase for the wastewater would be if it was spread out over a 5-year period instead of a 20%? I mean, would we like to end up in a less cash flow or cash reserve? I mean, do we want that in the future? It was up to— I didn't want to fall on deaf ears here about whether or not we wanted to look at that. Member Valentine.

Um, yes, good question. I guess to you guys in the back there, will we be seeing this again? This is just the proposal that Water Works, and they put a lot of effort into this. Will we be seeing this again to when we vote? And if so, can we have those different scenarios?

The answer to both questions is yes. Thank you. You know, we today we're not going to be talking about any rate changes for wastewater. We have Waterworth presentation and I will be coming to you with ordinance for updated rates. You know, when to institute a rate change and how much is something that The borough and Waterworth has spent a lot of time talking about, you know, the benefits of spreading it out versus, you know, a bigger rate increase up front.

Arian mentioned last year when we, we had discussed internally about a 60% and how that would be perceived by the ratepayers. But just like anything, you know, whether it's maintenance on your car or investing in your retirement, a little bit more now pays off in the long term versus putting it off when, when it's going to cost you more money.

Is it—. May, through the mayor. So just reminder on the wastewater stuff, you know, we have an EPA order to fix the disinfectant system, and we honestly don't know what that's going to cost yet, which is a big factor in, in the work that our utility directors are doing is because we don't know. I mean, we got an $8 million earmark from Senator Murkowski's office that will allow us— when we know we have the money, will allow us to turn the engineers loose on scoping out that project. And whether it comes in at $4 million and we're— or it comes in at $12 million, we won't— that's going to be a big number that impacts these rates.

But the meantime is we can't sit on our hands and do nothing, um, while we're waiting, you know, which could be up to a year before we have those numbers. So that's a challenge. I mean, that's a challenge Aaron's got, is we're guessing at some of this because of the cost of those projects are big. I mean, really, particularly that one is a really large number. So, yeah, thank you.

So does that mean that once we find out what that project is going to cost, that those rate increases that we projected might have to be higher? Could be or lower. Well, I'd be surprised if any of our rates go down, but I'm just trying to figure out if we're using it. I mean, you know, you understand what I'm saying? If we have a big project coming online and it could be anywhere from $8 to $14 million, would these rate increases be adjusted?

Answer is yes. Um, but, you know, again, that's why we have Waterworth to go to run through these numbers, and rather than just off the top of my head, this wastewater project could be absolutely huge, or it could be a lot less than we, than we anticipate. Aaron's already working with the engineers where we can, um, you know, and we got a big grant. There's nothing to say we won't get another grant. This is a project those disinfectant systems that we've talked about, it's not just happening in Petersburg, it's happening in Wrangell and Ketchikan and other cities up north of us.

So there's a lot of pressure on the delegation to provide funds and helpful, and we haven't given up on that. We got $8 million right off the bat, and that's going to allow us, when we know we have the money, to scope the project out, and then we're gonna have a better idea what it's going to cost. Unfortunately, what we're seeing is a lot of inflation on stuff. So that, that's not— that's the good, the downside. But once we know those numbers, once we have an engineer's, you know, this is about what it's going to cost, and we actually go back to the delegation and say, well, you know, the $8 million you gave us, that's $5 million too short, or no, that's great, we're wonderful.

But we don't know that now, and we won't know it for probably a year or better.

Member Valentine, the last time I'll talk on this. Um, question. I'm looking at the current rates, proposed rates sheet here. Um, if for this new, you know, 2 megawatt that would come on, would they be charged at the large commercial demand charge rate? Is that the one I'm looking at, the 3-point-whatever?

That is correct. They're a large commercial customer, so those rates will apply to them.

Um, does the, does the assembly wish to have different rates looked at for the next meeting? This is a votable thing. No, no, I'm just asking, do you want— does the assembly want the staff to come back with a different scenario of, of increases for the next assembly meeting? Yes. And then if you do, what will they— what are you asking staff to look at?

Instead of bulk front, what it looks like spread, and then what you guys said, the scenario, what happens if we bring on another customer, 2-megawatt thing, and you can correct me. What are we talking about, electrical or wastewater? Yeah, electric or wastewater. You're talking electric. I'm sorry, a lot here.

Wastewater over time is the one that I would like to see. I will come back. So let me, let me pin it down a little bit more over time. So what would you like? What difference would you like to see, you know, in terms of rates up front?

Uh, hike rate 20%. We saw on this thing said 20% and then jump 15. Just different scenarios of what it would look like, maybe 8, 8, 8, 8, 10, 10, 10, 10, whatever RN thinks. And, uh, you know, these guys are the experts with models. So just to see what that would look like.

Anyways, yes, okay, for wastewater, specific wastewater, I'm pulling back on my electric. Okay, then on electric, you just want to see what that would mean. Okay, let me, let me finish. Does that, does that make sense? And is that doable?

I have to ask.

Aryan has his hand up, but, um, yes, that's absolutely doable. Exactly. And I think, uh, because, uh, sir, I think I can solve your, uh, question rather quickly. And that's the, the beauty of why Waterworth exists. But I can't give you the exact dollar amount, but if I tried, let's say, your 10% strategy for wastewater And I did for, let's say, 5 years, 10% and then 4.5%, you can see how the cash position dips down and stays below the operating threshold for a prolonged period of time.

If I were to, let's say, extend your question and if I went 10% across the board for a long period of time, you will see a resurgence, but that means you're going to be 10% for 10 years. Okay. I hope that solves at least the initial question of yours, sir. Great, done, done. Okay, Mayor Romucci, thank you.

And then that covers your question that you had regarding the cash reserves? So yes, it would dip the cash reserves. And yep, I'd like to see that included in—. That'd be great. Thank you.

Thank you. So that answers the question. We don't have no other work for staff. Good, thank you. All right, sorry, um, any, any other Comments or questions on the rate studies?

Okay, seeing none, I'll move on then. Thanks so much, by the way, guys. Yeah, thank you. Yeah, no worries. Yeah, take care.

Thank you. Thank you for inviting us. I really appreciate it. Thank you. I'll move on to data centers, and with that, Utility Director Hagerman will provide additional information on data centers based on questions submitted by the public.

Thank you, Mr. Mayor. Um, well, firstly, I'll just ask this question. I was going to kind of skim these questions a little bit, um, but go dive deeper into some. It's been in the packet. Is the assembly— this is going to be a long meeting today— is the assembly okay with, with that strategy?

He's going to hit the high points in this, or would you like me to go over every question? 5 Points is good. Yes. Yeah. Okay.

Yeah, very good. Uh, happy to provide some more information regarding the data center opportunity in Petersburg. We do have Mr. Mazzella and Mr. Inoka here, uh, if there are any questions from the assembly that, uh, I can't answer through this, uh, FAQ document. Um, but Essentially, we, you know, Power and Light just wants to be as transparent as possible with what's coming to Petersburg. And the reason is that, you know, we're very aware that large-scale data centers are a very touchy subject across the country.

And, you know, they use an enormous amount of power. They use other resources. They take up land. They're, They emit, uh, diesel fumes from generators that are running all the time. They're noisy.

There's lots of very good reasons to be opposed to large-scale data centers. This project is not that, is not a large-scale data center, is small. And just the basic method of operation is enormously different from the hyperscale data centers that exist and are getting so much pushback across the country. So there were some questions of— just general questions about the data center itself. Of course, it's going to be located at Mr. Mazzella's property, the old Ocean Beauty Cannery.

They're fine-tuning the final location for that. Um, it's, it's going to need about 1,500 to 2,000 square feet of space, which is about 2 to 3% of his facility. So still lots of room down there for him to plan other projects for his, for his property. Um, the, the borough is going to be providing power to this through an existing transformer. Other utilities may be needed, but in very small amounts.

Akin to a small residence, actually, if even they need a restroom in the facility. So water and sewer resources won't be taxed at all by this.

The, yeah, the water system, they're going to charge a closed-loop radiator system to cool the servers in the, in the heat of the summer. If, and when I say heat of the summer, we're talking Petersburg summer, right? So there's not a whole lot of cooling needed. Generally, we don't get high temperatures, so very little water resource use for this. Noise seems to be the one issue that is probably most applicable to this Petersburg opportunity.

But the research we've done and the discussions we've had with Mr. Inoka pretty much tell us that that shouldn't be an issue as well. If you're standing inside of the data center building and one of the server cabinets is open, you might get 90— or excuse me, 80 decibels of sound, but nobody's going to be standing right next there with the cabinet open. You close the cabinet and you step outside and the sound level is closer to 60 decibels or less. And that includes any of the fan-cooled radiator for the water cooling system, which will be outside.

So that amount of sound is, I think, a much better impact or a lesser impact to the community than the the 5 freezer vans that were there, you know, all summer long in the past. The look of the building, um, Mr. Mazzella has told me that it'll be more akin to a net shed look. He wants it to blend into the community. He doesn't want it to be an eyesore. It won't be a big gaudy thing, you know.

Um, anybody walking by won't know that it's a data center. There was a question about, you know, because we compared this data center to cannery operations, you know, how loud is a cannery? And while I don't have any decimal numbers for that, just the list of equipment that exists at a seafood processing cannery, refrigeration equipment, compressors and condensers, forklifts, cranes, You know, there are a lot of sound-creating equipment at a cannery, and this particular data center being small-scale inside of a building is not even comparable to what a cannery can put out in terms of sound.

Any health concerns with data centers? You know, on the hyperscale version, yeah, there are, there are health concerns usually related to diesel generators that are running constantly to provide power to those. There's not going to be a diesel generator running at this facility. No emissions. Back to the noise.

Noise is an issue with large-scale data centers. Won't be an issue with this one. Uh, radio frequency hazards, a lot of local concern about that related to the tower issue. Um, not an issue with this data center. There's no radio frequency emissions from this facility.

Um, and as far as the research that we have done and in our conversations with Mr. Inoka, there are no other health concerns other than those ones that are very, very minimal. In this size of data center.

Question about will they be able to increase their power consumption?

And, you know, nothing prevents any customer from coming to Power and Light and asking for more power, including this data center. However, as I've said before, this data center, I think it's a square peg for a square hole. It's a good fit. It uses existing service that was already there and able for the previous owner to use as much of that power as they wanted. The case is still the same.

This is a customer, and they will be using that power. If they want more, they can come to the utility. We'll talk about it, but there's going to be a lot of due diligence to make sure that whatever their proposal is does fit in with our, um, ability to deliver that power, and that does consider all of our other customers. We don't want to agree to anything that's a detriment to other customers of power and light, and Greenspark doesn't want that either. They don't want to be a detriment.

They want to be a positive impact to the community, not a negative one.

Are there other Data centers in Alaska, yes, very little information. Most of them are private, so I don't have any information on size. Cordova does have a very small one, 170 kilowatts, but they're hoping to expand with the GreenSpark up to a 1.5-megawatt facility, very close to what we are planning or they are planning in Petersburg. And of note, Anchorage has an ordinance that regulates data centers. Above 20 megawatts, and so that's in itself a very large— in my opinion, it's a very large data center and something that would never be supported in, in Petersburg.

Um, there's questions about the Rangel Data Center and what became of that project, how it compares to Petersburg's.

Petersburg's project— the main difference is Petersburg project is 100% private. It's a private property owner who owns the transformer, and it's a private data center company that's coming in to lease property from them and set up their facility. Rangel's project was part of a greater economic development project in which part of that work was going to funded by the city and borough of Wrangell. And so it is greatly different in that way, in that the community of Wrangell really needed to get on board and support that project for it to happen. That is not the case in Petersburg, being this is a private sector project.

Power and Light has no expenses related to setting up this data center. It's a pre-existing service, as I said, and there's— it's really, we're just looking at it as another customer. You know, they apply, we'll go put a meter in and start billing them when they're ready for that.

Wrangell's project required some additional infrastructure to be built. They are kind of limited by their main SEPA substation in Wrangell, so that would need to be upgraded. The distribution line from the substation to the site needed to be upgraded. And on-site transformers didn't exist. So there's a lot more infrastructure in Wrangell to consider.

I'm saying all this not knowing exactly where that project is in Wrangell, what's happening with it, but just trying to point out the differences.

As stated, Misella Alaska owns the 2-megawatt transformer. He would like to use that transformer. I mean, when he bought the property, he'd expect to be able to use that to develop some business down there. And, you know, I don't, I don't see that Power and Light can tell him no, since we approved that transformer many, many years ago to be used for a customer.

Can an ordinance be written to limit the private sector data centers' future growth? Yes, of course, any ordinance can be written. And, um, and I think it's probably a good idea to start on that. I, um, one of the members of the public talked about ordinances earlier and wanting to know the timeline on those. I, I think it's, um, it's a good idea.

It would be great to protect the community from large data centers that come in, but you have to realize that we only have so much power And everybody's keen on that quite a bit. We can't sell more than we have. Um, this project falls into the amount of power that we have, um, and factoring in some of the, uh, the system improvements from SEPA and, and ourselves, um, you know, we're in good shape. Uh, I would just say that when the ordinance is drafted for future data center opportunities, um, that we be open to the fact that they may— it may come to a point where data centers are so interested in setting up shop that they could come in and help develop another hydroelectric source that could benefit Petersburg and SEPA in the long term. You know, that's all kind of pie in the sky right now, but it could happen, and that would be a situation where we wouldn't want to get in the way of that necessarily.

It may help us quite a bit, but we have to be very careful when we're evaluating those types of projects to make sure that we don't have, have an issue. Um, let's see, storage battery questions.

The, uh, issue of, uh, fire protection came up last time. Um, we did find out that the, the batteries that are going to be proposed are a safer type of battery, uh, lithium iron phosphate batteries, not lithium-ion. Um, these batteries, uh, are magnitude safer than the alternative. Um, they're not 100%. Safe, I would say, but the, the industry has taken that into account.

They're all self-contained. They have their own fire suppression systems. They're monitored and controlled very well. So the, the potential for a fire event is much lessened by all those engineering controls. And the types of batteries that they are, they basically just, if they do have a thermal event, they need to be cooled.

And, uh, and water can be used to do that, uh, cooling.

Uh, Petersburg, uh, Volunteer Fire Department can respond to this, um, and, uh, uh, take care of, uh, business if it were to come to that. Let's see, um, there was a question about, um, why would somebody come to Petersburg? Don't we have high electric rates? Why would somebody do that to themselves? Well, it turns out Petersburg is actually one of the lowest electric rate providers, electric providers in the state of Alaska.

Where it's kind of hard to say apples to apples because of the fact that, you know, rate structures, you know, change that up a little bit. But if we're not the— in the bottom 2, we're in the bottom 3. Um, there's not too many other utilities in the state that have, uh, lower power rates than Petersburg.

Can the borough guarantee local electric rates won't go up because of the data center? And this is the tricky question, and you're going to think I'm doing doublespeak here, but, um, yes, we can say that the data center will not cause our rates to go up. They will actually help rates to stabilize and lessen future increases. That does not mean that rates still won't go up for other reasons. Inflation has been high, and those fixed costs will still impact the utility.

You know, it would take a tremendous amount of revenue from a customer like this to offset those inflationary cost increases. So rates likely still to go up, but hopefully the discussion with Waterworth today showed that, you know, the, the more revenue that we gain from a customer like this, the better the rates will be for all of our customers. And that's a main reason that Power and Light is supportive of this project.

And along those lines, you know, how can one customer make a difference to everyone else's rates? It comes down to volume of sales. You know, as I said last time, we have a finite number of customers. Whatever our expenses are, including capital projects, future debt service, that kind of thing, we have to lean on that same amount of customers. Well, this one customer equals, you know, several hundred normal residential customers, so that helps a dramatic amount in our outlook on rates.

Questions about the large customer— large commercial sales agreement and how it will be structured. And, you know, we haven't gotten down the road too far on that. We've shared concepts with Mr. Inoka. They seem very open to a couple different ways to look at that, and mostly I'm talking about the times in the wintertime when we have cold temperatures and we do have to run diesel to peak shave and make sure the lights stay on. Mr. Inoka has said that he'd be happy to— he doesn't have to have the data center up 24/7, 365.

There's a number of days that he can curtail his service in order to fit better with the existing customers, basically not to be a burden as far as diesel generation goes. And the other option there, of course, is if it does— if it's more valuable to him to have power and not shut down his servers, that Green Spark would pick up more of the diesel surcharge so that it really doesn't affect either one of those scenarios. It won't affect the other customers that we have right now.

Um, see, oh, why isn't the borough moving this to an area that is closer to the SEPA transmission line? Closer to high voltage, basically. Um, the answer is pretty short. It's, it's a private project. It's, um, Mr. Mazzella and Greenspark are in discussion, you know, for Mr. Mazzella's property, and, uh, that's where it's going to go.

It's not, it's not a decision, you know, for the Bureau to make to provide an alternate location. Um, why isn't subject property being used for seafood processing like used to be? Well, I'm, I'm sure a lot of us would have preferred that it had been. It was for sale for quite a while with no takers. The existing owner also processes seafood.

They sold it with a 10-year non-compete clause that Mr. Mazzella must abide by. And so, you know, there are some factors, you know, out of our control, out of the community's control. And ultimately, the— those decisions are up to the property owner and the data center company. Questions about the processing plant, how much power did Ocean View use when they were in full operation? I provided some information, and knowing that processing plants are seasonal in the summertime, In 2014 and 2015, Ocean Beauty was going full bore and using about 1 million kilowatt hours in the summertime over about 3 months.

In comparison, if Greenspark— when they put in their first build-up of 1 megawatt, they'll use 8.5 million kilowatt hours in a year, roughly estimated. And at full capacity at 2 megawatts, that turns into 17 million kilowatt-hours. It is a dramatic uptick. Same service, same infrastructure, no money spent on that. It is just taking advantage of what is already at the site.

And there was a last question about— Doesn't the borough have an ordinance that requires waterfront property to be marine services-based? And the answer is yes, but that only applies to borough-owned property. So the leased property that the borough owns in certain zones must be marine-related. That being said, Mr. Mazzella is very interested, as you saw earlier, in using his property for marine-based economies. And, and so he's, he's continued to work on that, and, uh, and hopefully that'll, that'll pan out.

Um, but, uh, overall, you know, that site is, uh, historic, uh, significant, historically significant to Petersburg as a, as a processor. Doesn't look like that's going to work out, uh, going forward. But, uh, as far as Marine Services, Mr. Mazzella is, is trying hard to, to make that a reality again. And I just wanted to, you know, back to the sound. We did include an infographic, you know, on the sound issue, kind of, you know, it's one thing to say 60 decibels, but it's another thing to understand what that really is.

So with a vacuum cleaner being 70 decibels and normal conversation being 50, small-scale data center like this falls in the middle at 60 and is, uh, in my opinion, pretty, uh, pretty easily dealt with on, on any normal day.

That's what I have, and, uh, I'll entertain any questions. Does Mr. Inoka or, or Mr. Mrazela have anything to add to what Carl said?

Go ahead, Sam, if you'd like, or I, I could say a couple things. Yes, go ahead, go ahead. Well, I think we saw on the, on the rate charts, the, you know, the injection of money into the system— any money, uh, much less a couple million dollars a year— there's really no downside to that from a business, uh, again, the borough being a business. Um, there's really no downside, and I would present forward that you need that, you need the money. Um, you're gonna have big problems if you don't.

You look at the cash reserves, they're going to be gone. You're going to have to borrow money. That's what debt service is, and this allows you to cover existing and potentially future debt service. Um, but hopefully that was pretty clear, and I just wanted to point that out. Another thing too, I think maybe gets, uh, well, people probably just aren't aware, is that all my properties, not just this one, but I have several, uh, in Petersburg, various companies and different things, um, I pay about $5,000 a month today already just for electric, um, and utilities.

So, you know, we're already paying, uh, like I said, 5 grand a month, um, Last year I paid about $100,000 to the city, uh, for— to the borough for utilities and property taxes. And so we're already there. We already have a, um, we're contributing a pretty significant amount. And, um, that— the reason I say that is I have to— that cost, you know, we have to have tenants, we have to have things in order to pay that cost because otherwise again last year, I have $100,000 going out and not all that coming in. And so again, with GreenSpark, Carl's done a great job going over the, the pros and what are perceived cons, which I don't see any realistic cons whatsoever.

And, you know, I guess on the note of perceived cons, you know, this is the cleanest this would be one of the cleanest data centers in the entire world, and that's without exaggeration. The reason is this is hydropower, zero emissions. Um, and I don't really know what else to say other than that, but this is about as clean— it is the cleanest you could possibly do, being all hydropower, battery backup. And then I guess to the, to the batteries, you know, Um, I'm very interested in doing business with Tesla. I already do some business with Tesla, and they make these batteries that are just like everything they do, really at the cutting edge of things.

Um, all the fire suppression, things like that on these batteries is completely self-contained. There's, uh, you know, I work very closely— I'm happy to work very closely with the fire department, uh, provide them the information. It's, you know, a couple page is very straightforward, uh, not, not a lot to absorb on what to do in the event of a fire. Um, but again, this is the cutting edge of technology. And for what it's worth, people may not look at it this way, but if you're a business person, this is the fact of the matter, is these are tens of millions of dollars of equipment.

The batteries are $2 million each, and there's no one more than me that doesn't want batteries burning. When I put, you know, or SAM, for example, however the deal is made. But, you know, we, we don't want a fire, we don't want things burning, um, and I have more of an invested, you know, capital interest in that than anyone else. But like I said, we, we do have resources and things like that we would certainly share with the fire department and really any, anyone that wants to know more about it. So thank you, Mr. Mazzella.

Mr. Noga, anything to add?

Sure, just, it was encouraging to hear the discussion today. I was following along with Waterworth as best I could, and, you know, I'm glad that you guys are, you know, tracking kind of utility costs and, you know, and future rate increases based on other capital projects and improvements that your system needs. This is kind of the ideal environment and situation for Greenspark to step into. This is what we look for. We look for communities where, one, there's stranded energy available so that there is no necessary investment required on the utility or by the community for us to come in.

That's kind of a key distinguishing, you know, part of our work wherever we go is that, you know, we want to be completely beneficial to the system that we're plugging into. So, you know, that's one of the reasons why, you know, Petersburg is really an interesting, an opportunity for for Greenspark to step into and partner with. So there was another, you know, so all of the rates, you know, will go up based on various factors and other improvements that you're making on your system. And the opportunity, I think, as Carl pointed out, to bring in a large commercial load like Greenspark, large for your community, not large in the grand scheme of, you know, data centers around the world, but But, you know, our load and the revenue that we bring to the utility helps offset those costs and put some downward pressure on those future rate increases. And also, I heard a question at the very beginning about, you know, the new— a new SEPA turbine expansion, and I think that's been propose, although, you know, Carl could speak more, you know, to that and the future of the SEPA system, but this is the kind of load that if we can bring this to Petersburg and Wrangell and maybe even Ketchikan, this is the kind of load that allows the entire system to expand, which would drive out, you know, more diesel emissions from the system and drive down rates for not just your community, but the other communities that are part of the SEPA system.

So we definitely— if it was the case that, you know, we came into a community and there was real contention about how much energy we needed versus what you already need to serve, you know, your town and community, we wouldn't have advanced this discussion to this level because it's really You know, it's part of, you know, it's really part of our core value set that wherever we go, you know, we want to be a win for the utility, a win for the entire community, and it needs to, you know, it needs to square with our business plan. And if it doesn't do those 3 things, then it, you know, we really shouldn't be considering, you know, going into communities that just don't, you know, that don't match those values for us. So at the end of the day, I'm thankful that Andrew reached out to us and that we've engaged, you know, Carl and Steve at the utility to kind of talk through the issues and, you know, answered a few questions to local reporter Olivia. So, you know, so far so good. You know, we're excited about the opportunity and, you know, we love We'd love to be a step forward into the future for Petersburg.

Thank you. If I may add one thing, and Carl, this is for Carl, but I wanted to point out since Sam just reminded me, the question at the beginning, I think it was maybe one of the last public statements, but about the third turbine and the capacity and things like that. I appreciate all questions, and, you know, great, people are asking things. I think there was a little bit of a misunderstanding with the premise for that question. Again, if Carl could expound upon this, but the third turbine is new service.

Like, that's not already spoken for. In fact, as we know from the previous presentations, the current two turbine capacity is not spoken for. And a lot of power is just being wasted by the water spilling over the dam. So I just wanted to point out, um, thank you for all the questions, maybe some clarification on that if you think so. Carl?

Mr. Mayor, I can talk about that. So, uh, SEPA does have a project to add a third turbine at Taihi Lake. It will raise their total output to about 36 megawatts from that facility. Portion of that because Tahee Lake is dedicated to Petersburg and Wrangell on the north end of SEPA system. Petersburg will obviously benefit from that.

By no means is the power from that third turbine spoken for or maxed out yet. It allows for planning to occur, you know, and for SEPA and for the community, the member communities of the agency, that turbine won't be spinning all year round. You know, that turbine is really more geared towards horsepower and not power, meaning that in the wintertime when the two older turbines are maxed out, this one will spin up and provide, you know, the more horsepower to get through those peaks so that, you know, we don't have any diesel generation going on at all. And that, from our calculations, shows to be in many years in the future of no diesel runs, you know, due to winter peak shaving. So it's going to be a very beneficial project.

Again, that's a SEPA project, and they are planning to complete that in calendar year 2027.

Questions? Member Valentine. Thank you. This is a lot of information. Um, I have a couple of different questions, so I'm going to do my best to try to speed through this.

Um, Carl, since you're here, and then I would like to ask Mr. Inoka a question as well. Um, can you tell me the average, like, uh, residential consumption of a house? Like, how much, you know, we're just in general pretty variable. But anywhere from 800 kilowatt hours to 1,500 would be kind of a low range. Okay, so let's put it at 1,000.

All electric, you know, okay, other than that. So 1,000 kilowatts, so that would be 10 homes equal 1 megawatt if I'm doing my math correctly. No, we're talking about energy use, so kilowatt hours, um, It's— when we talk about power generation, we talked about kilowatts or megawatts. Energy use, we talk about kilowatt-hours, megawatt-hours, right? Okay, I'm just trying to make the math simple so people can like look and see how many, uh, houses compared to this 2-megawatt transformer, right?

So I'm just trying to find a nice little equation because we did bring up like we would love for Petersburg to expand population. I, I would love that. I want more of my friends and family to stay here at my age, right? I, um, but you know, the, the question is, is like, we do plan on expanding, like, will we be able to handle the load? Now, that said, um, our max currently for our, uh, electrical use is 13, uh, megawatts for the town.

13.8 Has been our peak. 13.8. And that's in megawatts. That's in megawatts, yes. And then in the summertime, its average is like 6 to 8.

Right. Okay. And then only 3 times in the last 5 years have we touched 3.8? 13.8, We've seen that peak twice. We've gotten close to it, you know, usually in the colder, coldest times of the years, we're going to be right around 13.5.

And then if we touch that, that's when diesel turns on.

Not necessarily. It depends on a couple different factors, but generally yes. Okay. And then— and that only happens during the peak times of the day. So right in the morning and in the evening, yes.

Middle of the day, no. Middle of the night, no. Okay. Um, and then, um, the GreenSpark is willing to work with us, um, you know, in— on good faith, but what, uh, ensures that they would like turn it off we told them, hey, turn it off, you know, we're getting to that peak. What ensures that?

Well, is there any insurance? Sales agreement, the large commercial sales agreement, a large commercial sales agreement between Power and Light and GreenSpark. That is the— that is what you guys are doing. Okay. And, um, also, if they were like, hey, we don't want to shut this down, we want to use diesel, also in that contract says that they will pay for the extra diesel.

Correct. Them themselves. Yes, the details not spread out across element or diesel surcharge will be in that agreement. Got it. Okay, thank you.

And then, um, last, I did have a question, um, for Mr. Inoka, if you're there.

He's there. Mr. Inoka? Yep, I'm here. Hi, my name is James. Um, I was just curious about your closed-loop system for cooling.

I have an engineering background, I have an engineering degree, but maybe I might understand a little bit. So I'm just curious what that closed-loop system is, what is the coolant, and then how often would you need to change that, and can our wastewater place handle that? Thank you. Yeah, no worries. Thanks for the question.

So I think we need— we're in the process of studying exactly, you know, the temperature ranges, and that will dictate what, you know, what we need, what exactly our coolant needs to be, but it'll be predominantly water. I think there may be something akin to like an antifreeze-type agent that's a mix of that— that's mixed into that water if, you know, if the coldest of the cold weather temperatures warrant it. But really what we have is kind of a hot loop that runs through our cabinets that takes and rejects the heat from our cabinets That loop then goes over to a heat exchange where we run a cold loop that runs to either a dry cooler and/or a chiller that sits outside. That's effectively the closed-loop system, whereas hyperscale data centers use evaporative cooling, and that just means they're plowing through millions of gallons of water year, whereas it boils off, right? Right.

If you're sitting in February, yeah, okay. So we, so, you know, our choice of design is, you know, is to maximize energy efficiency. But we, you know, we recognize one of our values is that, you know, the sustainability of this infrastructure, you know, is really key to how this gets deployed, you know, not just in rural Alaska, but globally. And water, water usage at, you know, for data centers, the hyperscalers in particular, is a real challenge in the lower 48 and around the world. So we made a specific design choice to go, you know, to go with closed-loop systems.

And then how often would you have to flush that? Well, we wouldn't, we wouldn't need to flush it. We'd probably If anything, we would just kind of maybe need to top it up a little bit just to make sure that it's running, you know, at maximum efficiency through the year. So maybe one trip a year to make sure the levels are up. Okay, thank you.

Member Newman. Thank you. So we've established that we have plenty of power, especially with the third turbine coming online. But the one question I keep hearing from people, and a couple people made comments today, you know, what about on the other end of the spectrum in low water years? And what if we have like 3 years in a row where we have low volume?

What happens in that set of circumstances? What's it going to look like? Sure. So the last meeting I talked about the operational sales ban, you know, from Tyee Lake, that operation would still be in place. So that protects Pierceburg and Wrangell in years where water is low so that we don't sell excess power to Ketchikan.

That's the whole premise of that. That same premise, though, you know, protects us in those years And I think of the right analogy here, but the— that operational plan was developed out of that drought from 2018-2019. That's a very isolated event. It was horrible from the power perspective, but it was isolated. And since then, we have spilled a dramatic amount of energy.

It's like feast or famine, with that one year being the famine and then the feast being every other year of Taiji Lake existence. And so we know it can happen, because it did happen. The operational plan helps to retain more water in that lake when the clouds don't open up. And provide the water that we expect. But it is very unlikely with that operational plan in place that we'll be dicey.

Droughts just don't last that long in Southeast Alaska. Not generally, but so we have, we have numbers from those, from those two years, '18 and '19, and those numbers of power output would still be sufficient to supply power for everybody in our community and also for this data center, or—. I have to get back to you on that. That's why I'm trying to—. I believe so.

Yeah, I, I do believe so. Okay, so if the, if the, uh, the, the battery bank wasn't sufficient, you know, for like a long-term solution then we have enough diesel capacity or diesel generator capacity to solve that, basically. Yeah. So the battery that you're talking about is the GreenSpark battery, or is that more like this, like a real temporary— and maybe Sam can add to this, but in my estimation, it's kind of like an uninterruptible power source for your computer. It will activate if they have— if we have an outage in town, it will come on and take the load, but then it'll allow those servers to be shut down in a controlled fashion so they're not harmed.

It's not really meant to carry that load for, you know, extended period of time, right? Yeah, yeah, that— our battery is really designed to provide, you know, at most maybe an hour or two of sustained load. It's it's not intended for us to operate at a long duration. It's really to give us an opportunity to have a managed shutdown if there's an extended outage at the utility level. There's also— it also is useful for both conditioning the power on the way in and also kind of insulating our operation from, you know, any sort of shocks that that the utility system may have, but it also, you know, it gives us an opportunity to mitigate anything in terms of our ramp rate, in terms of, you know, when we turn on all of our servers, we don't turn them all on at once.

If we did, that would be a little bit of a shock to the utility system, but having that battery in between our operation and the utility grid is a cushion between both of our operations. And so as we start cycling up our servers, you know, our incremental load isn't necessarily, you know, hitting all at once on Petersburg system or the SEPA system. It's gradually, you know, it's graduated on its way into the system, if that makes sense. That makes sense. So, again, this, you know, the battery is really just to mitigate, you know, short-term interruptions and give us a chance to have an organized shutdown if there is going to be an extended outage.

That's very interesting and good information. I guess I just never really visualized that the SEPA power would be, you know, basically flowing through the battery. Thank you. Yeah, and it's—. I would just like to add one other kind of interesting fact here is that, you know, we've kind of talked about a data center managing its workload according to what's going on on the local grid.

And we— Greenspark is currently in collaboration with several national laboratories and University of Alaska Fairbanks, which is where I went and got my undergrad degree in the energy program up there, as well as key commercial stakeholders down here in the United States, the lower 48, like NVIDIA and other of the big AI companies. So the, the concept of what we're talking about being grid responsive with our workloads. That is, that is the, the, the talk of, of all of this sector right now is everybody's really, really, really interested in cracking that problem. And I started Greenspark 10 years ago to start focusing on this problem. And 10 years ago, it wasn't a big issue.

Now it is. The world is paying attention to this very closely. So it's not a leap by any means to say that the work that we'll be embarking on to solve these kinds of issues in partnership with the utility and Cordova Electric and, you know, all the other microgrids around Alaska that we're going to be working with, it's not a stretch at all. All to say that this is literally the cutting edge of where this industry is today. Everyone in the world is keen on focusing on this, and, you know, it's just, you know, it's a great opportunity for not just Petersburg, but all of Alaska, you know, to have a chance to, you know, really participate in some of this groundbreaking research and development and technology that the rest of the world desperately needs.

So, you know, we're excited to get to work on it, not just in Petersburg, but all over Alaska. It's all very interesting. Thank you very much. Other questions for member Meechii? Yeah, not so much questions, but I just wanted to thank Karl and Steve and Andrew and Sam.

I mean, I asked to have this back on the agenda again because I wanted to make sure that the community had another opportunity to kind of hear this presentation. And during the last 2 weeks, I reached out to several people who had concerns about this, and this is a lot where these questions came from, and they were great questions. And I lay awake at night wondering what I'm missing here. Um, I And I'm not kidding, it's just like I'm— that keeps me awake at night trying to figure this out. And when I hear a half hour, 45-minute presentation about the rates going up, I'm trying to figure out how I can make those rates a little more affordable.

And like Carl said, this seems to be a square peg for a square hole and I'm supportive of this project, and I just wanted to thank all the borough staff who spent time on this, because I know it was a lot of work, and I appreciate your patience with me. Thank you. Thank you. I believe Aaron had a question. Yeah, he's got it answered.

Yeah, through the mayor, to answer Assemblyman Valentine's. Running the quick— some quick numbers. What Green Spark's gonna use is And it's really hard because every house is different, between 200 and 500 houses worth. And if you take that same math and look at how much we'll have left after Greenspark, that still gives us anywhere from 800 to 1,500 houses that we could build. So I don't think that's going to happen any day soon.

Okay, thank you. Well, let's hope so. Population move, that's what I want. So anyways, thanks. All right, with that, I'm, I'm going to move on to the last item on the, uh, on the report of other officers.

Mr. Bay, I'm sorry, go ahead. I know we're running late. I just have one question maybe for Steve. But, um, so there's some skepticism and, uh, distrust out there. Um, what if the noise is a lot more than, uh, what ability does a borough have to enforce any kind of noise And, uh, limit for the mayor.

Um, as you've heard, there'll be a sales contract between the borough and Greenspark, and those are the kind of things that show up in a contract that say what are the repercussions if, if it becomes too loud. Um, so I can't answer it right this second, but that's where you would generally put it, would be in the agreement we have with Greenspark to sell them power.

Other questions? If I may on that too, just keeping in mind it's, uh, anywhere we would be putting this is an industrial zoned, uh, property. Just to, just to make sure everyone's aware, it's a, the industrial zone, and with that, um, you know, has its own, uh, code. Well, of course, the code for industrial. So just keeping in in line with that, correct?

Thank you, Carl. One last comment, just to mention to everyone that the, the initial presentation from last meeting and the frequently asked questions that we talked about today are all on our website. Let's go to the Petersburg Borough website and, uh, and to the Power and Light page And all the information is there.

Thank you. With that, I'm going to move to the next part here. I chaired a special SEPA meeting last week, and from that meeting we have now things— we got a few things I think can go public. And with that, Carl, if you'd like to make a presentation.

Sure. Thank you, Mr. Mayor. So, um, some exciting things happening. On the SEPA level, the board approved a land lease agreement between SEPA and the City and Borough of Wrangell. The lease is a critical milestone in a process that included alternative energy study, project site selection, land procurements by the Wrangell municipality, and approval of the agency's first project outside of hydropower.

This project will be built by SEPA on city and borough Wrangell land and will contain a 5-megawatt battery energy storage system called a BESS and a solar farm. The solar panels will initially be built to a capacity of 1.5 megawatts but will be fully built out to a 5-megawatt facility sometime in the future. This project also provides Wrangell with its first power generation facility outside of its diesel generation fleet and will have a positive impact to the north end of the SEPA system, which Petersburg is a part of, by injecting battery power during system faults and other disturbances, thereby reducing occurrences of outage. So it is really a reliability and stability project overall.

The board also approved a contract with Commonwealth Associates, um, to advance design on the Rangel Solar BES project. To construction-ready documents for a summer 2026 start. So yeah, that is this summer, um, they're going to start on that project. The board also approved a new, uh, 5-plus-year contract with current SEPA CEO Robert Seedman. Mr. Seedman's knowledge, experience, initiative, and personal energy have made him an outstanding asset to the agency, and the board is pleased to approve this longer-term contract.

The CEO has now secured in a contract to lead the agency through FERC relicensing for both Swan and Tahee Lakes, which is an enormous process. Tahee Third Turbine Project and the Ketchikan Substation Project. Of course, also the Wrangle Project we just talked about. And lastly, the board approved a change order with McMillan Design Engineer on the Tahee Lake Third Turbine Project to cover a larger than anticipated effort to coordinate and manage the equipment supply contract. The additional work performed by the engineering firm was made necessary by the project's, uh, being split into an equipment procurement phase and a construction phase, but it was critical to ensure that the construction phase proceeds smoothly once the equipment that's being built right now is delivered to the remote site out at Tyee Lake.

Uh, project is still on schedule to be completed in 2027.

Questions from—. Yeah, thank you, Mr. Mayor. Yeah, thank you. I had a question about the solar farm. Um, is there a plan for a solar farm here on Midcoff Island?

There is not at the present time. The effort that SEPA went through to identify what's the right amount of solar for the system landed on one project. And that one, the site was better in Rangel, so they went in that direction. And a follow-up question, how big is a solar farm that would generate 5 megawatts? How big of an acreage is that like?

I want to say it's about 40 acres. Okay. 40 Acres. Okay. Great.

And then the Rangel Solar/BESS project construction, is that kind of like a prototype that would help us with our BESS system? With Crystal Lake to town? It could, it could. We'll definitely be able to see, you know, how that design proceeds and what it looks like in the end. However, every location is going to be slightly different, so we have to do our own due diligence and make sure that if a BEST project ever does come to Petersburg located out at Blind Slough, that it meets what we need in that kind of a facility.

Great, thank you very much. Carl, can I add two other parts to that? We looked at solar throughout Wrangell, Petersburg, and Ketchikan. The best site of all communities was in Wrangell. We had a chance, and this is the very last chance, we're within days of the deadline to get a grant to pay for that.

And so that essentially doesn't cost the ratepayers anything other than to build it. And Rangel gave us the— gave SEPA the land for that for a dollar a year. So really, the first part of this really does not have much of a cost at all to the ratepayers. I would add that. And then the second part of that was I want to address the question that keeps coming up about water in that reservoir.

Is that I was on the board in 2018 when this all happened, and I can assure you it was ugly at the time. But we went— we've gone through all kinds of scenarios of looking at, is there sufficient water to take care of that third turbine and take care of Rangel and Petersburg? The answer is yep, and we've done that in 3 different ways. The first is, is that we established a guide curve, and what that does, when that reservoir reservoir starts going down to a certain point, we— you shut off water, selling the water to other entities other than the two communities. In other words, it can't go to Ketchikan.

The second thing is, is we go through a process each year of establishing an action plan, essentially. It's what Carl works with almost every day, but we're talking about how we're going to manage that reservoir reservoirs for the whole year. And then they— and almost on a daily basis, and Carl, on the third part, Carl and the crew weekly look at that and see how that needs to be adjusted. So there's, in my mind, there's 3 different ways that we've looked at that. And I think it's— I wouldn't say it's totally fail-safe, but I think it's a pretty doggone good system that we put into place.

And we've looked at it We looked at it last year, I believe, is what it was, whether or not we were, we were doing it correctly and came back to the same conclusion that what we had in place was adequate. Yeah, I would concur, Mr. Mayor. I, you know, SEPA communicates a lot on operations planning and they come up with a plan, you know, at the beginning of each year. They follow that plan and they're not afraid to adjust it if something comes up. And, uh, the weekly operations meeting that we have with SEPA, we go over, um, how the plan is doing every week.

So there's a lot of communication involved and, uh, a lot of communication that, that the public isn't aware of, but, um, it's important. And, uh, I'm, I'm glad that SEPA is, is operating that way, and it's all our benefit. I would just add one other thing too, is that, uh, the board has concentrated for the last years on reliability and stability and improving that grid as much as possible to keep outages to a minimum and to keep that system moving forward. And the projects that Carl's talked about are in the process. There's one and there's another big one in Ketchikan.

There's that one in Wrangell that we're going in addition to this, in addition to the reservoir and we've looked ahead at other hydro projects. And if somebody else wanted to come in and build a hydro for a big mega farm of some sort, you know, we have the resources, the hydro resources, we have the water rights, we could build one. But you're talking, to do that, you're talking $100 million to build that facility, and it would take about 5 years. The reason that everything's there, we've done the studies, we've got, we've got everything prepared if, if that needs to be done. No, nothing further to add.

Okay, and that's all I have. And with that, unless you have anything else, Carl, let's take a 5-minute break and come back.

I'd like to bring the, the meeting back to order again. With that, I'm going to move on to the mayor's report, um, today, and that I have a number of items on there. Let's talk a little. Little Norway Festival for 2026 begins next week. Petersburg will be celebrating our Norwegian heritage with many community events.

Schedule can be found on Chamber of Commerce website at www.petersburg.org. Wishing everyone a safe and enjoyable celebration. Emergency Serv— EMS Week proclamation. Governor Mike Dunleavy has proclaimed May 17th to the 23rd as Emergency Medical Services Week in Alaska. EMS Week highlights the critical role these responders play in protecting public health and safety, often serving on the front lines of emergencies in our communities.

The proclamation is attached to the agenda. Federal legislation, HR 8401. This legislation, legislation introduced by Congressman Begich, would amend the Marine Mammals Protection Act of 1972 to allow the transport and sale of pelts and related products made from northern sea otters taken for lawful subsistence purposes in Southcentral and Southeast Alaska. If enacted, the bill would support Alaska Native cultural practices, provide new economic opportunities through the sale of unaltered and minimally altered pelts, and help address sea otter population impacts on commercial and subsistence harvest. I have a couple retirements I'd like to announce here.

Sergeant Derek Thorsten. Petersburg Police Department would like to recognize and congratulate Sergeant Thorsten on his retirement after 25 years of dedicated service to the Petersburg community. Throughout his career, Sergeant Thorsten has served Petersburg professionalism, commitment, and a steady dedication to public safety. His years of service reflect a deep commitment to the people of this community, his fellow officers, and the mission of the Petersburg Police Department. Over the past 25 years, Sergeant Thorsten has part— has been part of countless calls, investigations, community events, and moments where Petersburg residents needed help.

His experience, leadership, and service has made a lasting impact on the department and the community he served. And then I'm going to move on to retirement announcement for Chris Weiss from the library. Thank you to Chris Weiss, who's retiring after 38 years of service to the borough. I think she was the longest-serving employee, yeah, to the borough at the public library. Throughout her career, she helped guide the library through major technological changes, from the earliest days of dial-up internet to today's high-speed connectivity.

She served in many roles, including clerk, tech support specialist, and passport acceptance agent, helping connect her community to information and to the wider world. We thank Chris for her dedication, innovation, and lasting contributions and wish her all the best in her retirement. Thank you, Chris. And with that, we'll move on to the manager's report. I will try to make this fast.

Um, Stephanie covered some of the status on the aquatic center She talked about the ground radar. What we're doing is trying to make sure we can identify where existing pipes and conduit is so that when we go to cut the floor to replace the sewer line, we don't— we do limited damage. It cuts our costs if we can do this well, so we're working through that. Um, did get notice— this is not in the report, but it's important— while we were sitting here, got a text from our Juneau lobbyist. There's a chance that we got some grant funds from the state.

Um, I guess it's the one positive thing with all the price of oil going up, is the state's got a little bit more money. Includes a $541,000 grant for the Aquatic Center sewer line and, uh, $1.1 million to the Petersburg School District for their security access control project. It's not a guarantee. There's a couple of steps that has to happen, but, um, I'll take it as good news just because. Um, Stephanie Payne helped Tyler Thane get elementary school students into the pool for one more round of water safety before the summer begins.

A reminder, Parks and Rec staff will be closing the facility at 3 PM on Friday, May 15th, to host events downtown for Little Norway. We've had a kind of a surprising surge of requests for permanent moorage, and the waiting list continues to grow as Harbor is full. Our first tour ship arrived on Sunday. The numbers will pick up as we move into May. Uh, thank you to Public Works, Waste— Water and Wastewater Departments setting up the portable bathrooms in the City Hall parking lot.

Harbor seasonal cleanup has begun. Treating wood floats, fire hosing the parking lots, and cleaning up the winter sand is taking extra effort this year. Crew has started painting and touching up parking and loading zones as the dry weather allows. Streets crew, just a big thank you to them, installed a disabled parking space at the Rec Aquatic Center. And we've got preventive maintenance ongoing at Motor Pool, and the street sweeper and the boom truck remain out of service pending arrival of repair parts.

Um, it may take us all summer to get all the sand up, especially with the sweeper down. Um, building maintenance completed installation of car support beams for the police department. We addressed some plumbing issues at the police department, initiated cleaning and restoration of the water fountain at the museum. Pump Station 4 project is advancing with increased activity expected over the next 2 weeks and potential traffic impacts. And I think everybody's seen those notices, please follow them if, if roads announced as closed.

We installed a remote telemetry unit—. Sorry—. At the Baylor Pump Station to enhance SCADA monitoring. Water Department is working with RMC Engineering to resolve programming issues affecting plant startups. And the library received a grant from the Petersburgh Community Foundation to assist with the purchase of a new self-check kiosk.

Skow Bay Generator 2 project design is progressing with 95% plans due to borough by May 1st. Power and Light will be requesting consideration of a bond ordinance and ballot question to fully fund the construction.

Steelhead Enterprises has been working on the storage building addition at the Skow Bay Pull Yard. Work will be completed in May. And Power and Light has been working with Parks and Rec to develop and then implement a plan for the ball field area lighting grant. Power and Light is working with McMillan to develop a scope of work for a feasibility study of the BESS system you've heard us talking about at the Blind Slough Hydro Project. A BESS would help reduce brownout occurrences.

Powerline is exploring a project to provide the public with electrical outage status updates through an SMS text messaging and email notification system. Would be opt-in only. Preparations are underway by the mechanic for the June CIPA shutdown to ensure smooth, reliable operations. EPS will also be on site, um, the week of the 11th to tune the Scout Bay 1 generator controls following emergency repairs can be completed this weekend— this winter, excuse me.

I continue to work with Title on the sales contract. We had some concerns regarding contract language that sounds like may be resolved in the next week or so. I'm not going to hold my breath until it happens, but we're keep getting closer. Clean Hyatt Housing has been work on the airport addition expansion. Bro staff are working with it their engineering firm and construction teams on getting the infrastructure completed.

Aaron and Thomas will start working with Harai and Associates on the revisions to the borough standard specifications. I've asked them to work with Harai and focus on the road piece first to get us prepared for potentially the South Midcoff subdivision. And the borough's negotiating team has been meeting with members of PMEA to work on the new labor contract for the next 3 years. And on the issue of the Maritime Prosperity Zone, the reason Ketchikan and Wrangell are a little bit ahead of us is because it was sponsored by JAG Marine. The Marine Prosperity Zone is really more about shipbuilding and maintaining of big— bigger ships, which is really where the Coast Guard comes in.

We've not heard any rumors of Coast Guard mooring station happening in Wrangell. Although I wish them the best for that. It's really more about repairs to the bigger Coast Guard ships going on. I have asked Liz and our federal lobbyist to kind of look into it, find out is there a place for something like what Petersburg does at Scout Bay, and whether or not— and with Biston or Rudder— and whether or not that would have a benefit for us. Those kind of programs are often basically tax break systems or the private sector, which helps them want to do business with us.

So when you're raising their hand— okay, all right, I'll— I'm— like I said, um, and we did talk, uh, Glo and I spoke through email with our federal lobbyist about the issues with the icebreakers. Um, he feels that maybe down the road there's an opportunity, there's a second pass at creating icebreakers that may be an option for us. This first one, they want them farther north, but we don't have— the Coast Guard's notoriously quiet about the, you know, so we really don't know, but we've got an eye on it and we've asked Seb to keep an eye on it and talk with the delegation. So anyway, that's my report. Any questions for Manager?

Member Meecha? Yeah, thank you, and you've touched on some of the things I want to talk about. You know that prosperity zone that they talked about? So that's just— so if I understand it, that JAG Marine is the outfit that has the ship repair or building unit that they're trying to put together that encompasses both Wrangell and Ketchikan? Through the mayor, it basically—.

It's the same company. So it was— it used to be Vigor. They were working on the ferries and potentially building the ferries. Jag Marine took them over, and they've got an out— you know, the big plant or facility in Ketchikan. And Wrangell's trying to build something similar in there in Wrangell.

So we don't know. We hope it works out really well for them. I mean, it's a— it's something, but again, it's focused on larger ships. In my discussions with the mayor and the manager there and the mayor in Ketchikan. It has to do— the marine industry, the zone has to do with marine industrial types of things like shipbuilding, ship repair, that type of thing.

And what Ketchikan— or what Wrangell is trying to do was out at their site was to encourage JAG to come in with all— with different kind of incentives to build some kind of a marine repair business there with ships and boats. That's the intent. It's out the road at their old mill site. Yes, it's out there. And they filled that in.

And they've got a couple contracts. They had a bond, the Wrangle folks have, have approved a bond. I don't remember exactly how much it was, but it's significant. It was $5 million. It's quite high to be able to fill that in at the old site and to provide power out there.

And I don't remember all the other details of it. And go ahead. So just to follow up on that Marine Prosperity Zone discussion, that's like for shipbuilding. That, that's not related to a possible Coast Guard housing here. It's just shipbuilding and repair only.

Yes. And it's— and again, Petersburg may— there may be a place for us there. We just don't know. We had to— it's not something we've looked into before. So again, I asked Liz and our federal lobbyist to talk with the delegation.

Yes. And in my discussion with them, they're mutually— I asked if, if it was declared a prosperity zone, if there was a financial incentive in any way, you know, that would help bring grants and that type of thing to our, you know, to the borough. The answer was no at that point in time. And I also asked that question, by the way, so that's our lobbyist and his answer there. And, and Golan and I've had discussions too, I believe, and they're mutually exclusive.

We can go after one without the other, that type of thing. But as Steve says, at some point in time, if an industrialist wanted to come in and build it, we could actually move, make some changes.

Any other— yeah, any other questions for—. I do, actually, I do. I wasn't done yet. On the Title Network sales contract, are we close or just a couple language issues? I'm going to be careful how I say something, so I apologize if I sound cryptic.

The main issue is related to sovereign immunity. Okay. And we want them to waive that, and clearly as a tribal entity they don't want to. Sure. So our attorney has recommended some language.

They've come back and said we don't like it, and we— that's what stopped the meeting from being today, actually, because we said we're not giving in on how we view it. Title has agreed to go look back, look at it with their counsel to see if there's room to change that language so it meets our needs. And I told them they have by basically May 11th to get it to us. And anyway, so we'll see what happens. Thank you.

And my last one I had, Mr. Mayor, is I just want to thank Parks and Rec and Stephanie for that, that water safety thing. I mean, I've got 3 little kids or 3 grandkids up there, and they all came home talking about water safety. And of all the things they're learning in school, for me, that's one of the real important things, water safety, because they're on the water all the time. But I just want to say thanks to the people at Parks and Rec. Thank you, Mr. Mazzella.

I saw you there, but I'm going to pass by at this point, and I want to move the agenda forward before I get before 5 o'clock here, if I can. And with that, I'm going to move on to unfinished business. And under unfinished business, we have one item. And that's Ordinance 2026-05, an ordinance of the Petersburg Borough adjusting the fiscal year 2026 budget for known changes. And this is the third last reading of it.

And included in that is the Secure Rural Schools revenue. Federal government approved the Secure Rural Schools Reauthorization Act of 2025 on December 18th, 2025. The borough received its fiscal year Fund 4 payment on March 23rd, 2026, in the amount of $722,484 for Title I schools and roads. A letter from the state of Alaska is attached to the package. The second item on there was elderly housing, Fund 470.

Funds are proposed for replacement of elderly housing 44-year-old dry sprinkler system valve and air compressor, which has exceeded their useful life. Details are included in the attached memorandum. And the fire department, to complete the funding of new scuba tanks and masks to replace existing equipment. This expenditure was authorized by Resolution 2026-05, approved March 16th, 2026. Again, the resolution is attached.

The last item in that Ordinance is Wastewater Outfall Repair Project Fund 764. This added $275,000 in loan funding from the Alaska Department of Environmental Conservation as well as a $275,000 expense for the project. Ordinance 2026-05 was unanimously approved in its first and second readings. Do I have a motion to approve Ordinance 2026-05? 5.

Make a motion to approve Ordinance 2026-05 in its entirety. Second. Moved by Member Newman, I think seconded by Member Mucci. Um, any discussion? Okay, with that, would the clerk please call the roll?

Member Mucci? Yes. Mayor Lynn? Yes. Vice Mayor Stanton Gregor?

Yes. Member Martin? Yes. Member Valentine? Yes.

Member Newman? Yes. Member Schwartz? Yes. Okay, and that passes 7 to 0.

Moving on now to new business. Ordinance 2026-06, an ordinance amending Petersburg Municipal Code Title 20, entitled Watershed Management, to update language and to account for borough incorporation. This is the first reading. If approved, this ordinance will update and codify existing watershed management regulations into the borough code, reflecting borough formation and continued protection for the City Creek and Cabin Creek water supply watersheds to safeguard water quality and quantity for Service Area 1. Do I have a motion to approve Ordinance 2026-06?

So moved. Second. Move by Member Stan Gregor, second by Member Schwartz. A discussion? Member Stan Gregor.

Yeah, thank you, Mr. Mayor. Just briefly for those listening at home, and as always, Mr. Manager, correct me if I'm missing, uh, there's definitely more of just a housekeeping thing going from, uh, City of Petersburg to Borough of Petersburg to update language. More of a housekeeping item. Through the mayor, correct.

We asked Carl to do what he could on some of these outstanding ordinances in the power and light and utility world that have not been converted to borough language. So he's working through them. Right on. So, heads up for those listening at home. Thank you.

Any other questions? Okay, would the clerk please call the roll on ordinance amending the Petersburg Municipal Code Title 20?

Mayor Lynn? Yes. Member Musi? Yes. Vice Mayor Stan Gregor?

Yes. Member Schwartz? Yes. Member Newman? Member Valentine?

Yes. Member Martin? Yes. Okay, ordinance passes 7 to 0.

And then next item on there, an ordinance amending Petersburg Municipal Code Chapter 4.80 to adjust the Marine Passenger Fee to Address Increased Borough Costs Associated with Services to and Infrastructure for Marine Passenger Vessel and Their Passengers. This is the first reading. If approved, this ordinance will amend the Marine Passenger Fee by increasing the per-passenger charge to address rising costs for public safety, harbor operations, sanitation, emergency response, and other borough services and infrastructure impacted by marine passenger vessels, while codifying the change in the municipal code with the increase effective January 1st, 2027. Do I have a motion to approve the increase in marine passenger fee? I move to approve Ordinance 2020-26-07 as written.

I'll second. Been moved by Member Valentine, seconded by Member Muci. Discussion?

Member Muci. Yeah, thank you, Mr. Mayor. When we were talking about this originally, I kind of went down from the community to community, and I'll just share with some of the information I had. Ketchikan enacted a marine passenger fee in 2025, and theirs is $13 a head, $10 for lighter passengers. And plus they get the— they're part of the state excise tax program.

Wrangell doesn't have one, but they're part of the state excise tax. Juneau has a local one of $5, and they also have a $3 fee for port infrastructure as well as the state excise tax. Haines charges $9. It's going to go up to $12 in 2027 and to $13 in 2029. Sitka has no dedicated head tax, but they are involved with the state excise tax.

And Skagway has no dedicated head tax. But I think this is a good— I'm glad, I'm thankful for Jodi and the staff for putting this forward and for James for keeping on it. I think it's much needed. Looking forward to it. Thank you.

Any other comments, questions? Okay, hearing none, would the clerk please call the roll? Vice Mayor Stanton Gregor. Yes. Member Martin.

Yes. Member Valentine. Yes. Member Newman. Yes.

Member Schwartz. Yes. Member Meechi. Yes. Mayor Lynn.

Yes. And that also passes 7 to 0. Moving on is Ordinance 2026-08, an ordinance updating Chapter 14.16 in the Municipal Code entitled Electric Utility. This is the first reading. This, this ordinance will update electric utility rates and charges for fiscal year 2027 to ensure Petersburg Municipal Power and Light can fully cover operating expenses, inflation, capital needs, reserve requirements, and debt-covered obligations while maintaining reliable electric service and codifying the revised rates and fees to the municipal code.

A memo from Director Hagerman is attached. Do I have a motion to approve the, the electric utility rates change? So moved. Second. Okay, moved by Member Stan Gregor, second by Member Valentine.

Member Stan Gregor. Thank you, Mr. Mayor. Um, a couple things. First of all, for Director Hagerman, thank you for the thorough memo attached explaining the logic for fiscal year 2027 and why these increases make sense.

I will be voting yes, but we spoke some about it earlier, Carl, but I mean, as you mentioned before, we're second or third lowest in the state for utility, for electrical rates. So that's great, although no person, myself included, likes seeing their rates go up. I also like knowing I've got secure infrastructure in my electric— in my electrical utility, and to put it simply, the lights stay on, and that we're well-staffed, etc. This isn't quite germane to the issue, so I'm going to bend just briefly. As of right now, it sounds like Mr. Mazzella is moving forward with Greenspark, but, you know, business happens.

We don't know if it will happen, but for the sake of discussion, and again, I think you touched on it earlier, Um, although no guarantees, but let's see over the next fiscal year that goes through, that could have either reduce or decrease increases in the future outside of, you know, we're talking about fiscal year 2027 right now, but looking down the line, that could really mitigate some of those increases. Yes, through the mayor. Yes, that's correct. I felt rhetorical. I want to make sure it got said.

That said though, since there are no guarantees in business and the I will be voting yes on this because it is conservative and prudent to make sure these— all the things listed there are being covered. So I just thank you for your diligence in getting this before us. Thank you. Other questions from assembly members? No.

Would the clerk please call the roll?

Member Martin? Yes. Member Valentine? Yes. Vice Mayor Stanton Gregor.

Yes. Member Newman. Member Schwartz. Yes. Member Mucci.

Yes. Mayor Lynn. Yes. And that ordinance passes 7 to 0. Moving on to the last item under new business here, an ordinance 2026-09, an ordinance of the Petersburg Borough adopting the budget for the fiscal year fiscal year July 1st, 2026 through June 30th, 2027.

This is the first reading. If approved, this ordinance will adopt the fiscal year 2027 operating budget for the Petersburg Borough. And for the public knowledge, we had— the assembly had a workshop with staff last week to go through it in, in some detail. And with that, Do I have a motion to approve the budget on the first reading? So moved.

Second. Moved by Member Muci, seconded by Member Nguyen. Discussion? Okay, Member Stan Gregor. Yeah, just briefly, um, I want to thank staff, uh, all the way across the board, department heads, for getting us a balanced budget.

I know with some state and federal uncertainty that wasn't an easy task. I know that It's clearly recognized. I'll be voting yes in the first reading. As a predecessor of mine, Nancy Strand, always said she looks forward to hearing from the public during the public hearing part of this. So if there are any amendments that I'll be making, I'll wait till after I hear from that.

Thank you.

Martin. Yeah, thanks for that work session last week. That was very helpful for me, my first one, and Same with, uh, Vice Mayor. I'll be, uh, probably have some questions next reading.

Any other questions? Would the clerk please call the roll on the next year's budget?

Member Meechi? Yes. Mayor Lynn? Yes. Vice Mayor Stanton-Greger?

Yes. Member Martin? Yes. Member Valentine? Yes.

Member Newman? Yes. Member Schwartz? Yes.

Okay, and that— the budget on the first reading, it passes 7 to 0. Communications from the, from the last 2 weeks are in the package, and I'll not go through those. And I'm going to move on to assembly discussion items. Under that is the first item is Scalbay Fire Station and Training Facilities, and that item was asked by For Member Mugi. Thank you, Mr. Mayor.

With the leaseholder contracts being terminated and asking those businesses to vacate in a manner so that we can get ready to get that Skow Bay area, I was— I'm trying to sort out what the steps would be to to move the training facilities out of those— out of Skow Bay? Is there a possibility— several questions here. Would it be possible to move those to the 14th Street facility that Wastewater has and to find a home for them up by the current fire hall up on Haugen? So I was just curious how that thought process moves forward. Manager, like to address the discussions we've had.

Mayor and I met with, with GLO, Liz and Aaron Hankins to talk about, you know, what do we do in the future. So, um, the Sky Bay development doesn't coexist well with the training material, so we're going to move the training stuff out of there as part of the construction. We will locate it up at 4th Street pole yard for storage purposes, but we have to find a future location for that. We don't have it yet. Um, we'll keep talking about it.

Um, it's got a set of, you know, we need water access, we want it on a road, the pad has to be, have, you know, heavy duty enough that it'll take a fully loaded fire truck or two. So we keep coming up with ideas and then one reason or another they're shot down down for not being enough for what we need. So keep at it. Um, I don't know if we'll get it done in time, but we're going to keep at it, and hopefully we'll kind of find a location that will allow us to— to— and if the fire hall is location— challenge with the fire hall location is when we built that, we built this facility, we talked about relocating the PD down there, and the cost to build the rock fill, the base, is over $1 million a lot of years ago. So that's the challenge.

We don't have $1 million to spend to build that up down there. So we're trying to find a, you know, a lot that would be a little cheaper to develop, and we haven't come across one yet. So, and that would— I would add to that Two other things is that the discussion was also temporary versus permanent. I'd like to have something permanent, but you don't know. But then the cost of that, and then other places I think that were looked at, there was no water.

And so you would have to add, you'd have to bring water in for some considerable distance, and you're looking at $1 million in addition for that too. Go ahead. Yeah, just to follow up on, you know, the million dollars thing. You know, I know we were— I know we were looking at helping American Cruise Lines with their dock facility, and I don't know if it's a possibility, but would there be— and you can tell me at a later time— but would there be the possibility of borrowing money from another department as a loan and paying that loan back with interest to help bridge that gap?

Yes. The assembly can borrow money from enterprise funds, but it has to be paid back with interest. Yes. And that's an assembly-level decision. Um, I, I— so can it be done?

Yes, we've done it before or talked about it before, but it has to be paid back with interest, and, and it has definitely has to be, uh, fire department is a general fund, so it'd be the general fund borrowing from an enterprise fund. Having to pay it back, which hurts the general fund, having to pay interest. So anyway, great, thank you. Yeah, and the other part of that, remember, Mucci, is we were talking about is if we had, if we had a place, if we had a plan, then we could also look at possible grants or other options. But we, um, staff has some more work to do, and that's what we're, they're chasing around right now.

I would hope to have something to bring back here You know, in another month or so, and was to meet again, kind of go through some of the ideas that folks had. Thank you. Okay, second item on the agenda is Petro Marine property, Harbor Department use. The item was requested by Member Mucci. Yeah, thank you, Mr. Mayor.

You know, when we're talking about this data center potentially going in over here on the Ocean Beauty dock, or the property that Mr. Mozilla—. Are—. Is there going to be a need to move harbor equipment from that area to a different place? I know in the past we've looked at the Petro Marine property as a place to store stuff, and I don't know if that is back on in the conversation about a possible use for a place to store harbor equipment. Uh, and I'm just throwing it out there.

So, um, if you ask Glo, she's gonna say it's never been not off her list. Um, but the last vote of the assembly was do not move forward with it. So if the assembly wants to address that, um, then you have to put on an action item on an agenda and instruct us to do so. I understand. Thank you.

Anything else on that item? Thank you, Member Stan Gregor. Yeah, I would just chime in, like, I guess it would be for GLO or the manager.

I don't think Mr. Mazzella's project necessitates moving the current equipment though from where it sits in Middle Harbor right now, though, would it? That's on borough property, if I believe. Not that I know of. That's what I thought.

Just want to clarify. Thank you.

And we still have the option— the harbormaster also has the option of looking at other sites too for storage of equipment and, you know, looking for a building if they chose to do so. Moving on here, use of electric vehicles for Borough fleet. This agenda item again was requested by Member Mucci. Yes, I've had several people when we talked, we were talking about the solar farms out the road, and somebody says, well, what about, has the borough looked at electric vehicles? And I know they're fire hazards, but they just— that was the question, and I figured we'd get an answer so that I could not have to worry about that as well.

Thank you.

Alaska Marine Lines barge service will not take an electric vehicle. They had a big fire, they won't take them anymore. And the ferry is very limited. I think it's 2 vehicles per trip, and even then, I've heard rumors of people here in town who have electric vehicles who can't get them off the island for repairs. We are not looking into electric vehicles until that whole world gets a little more stable and work with, with kind of our needs.

Thank you very much. And the other 2 items that are on there, Mr. Mayor, we've talked about them at length, and so I'm good to go. All right, thank you, Mr. Mayor. Yes, uh, Member Stan Grader. Thank you.

If, uh, with your permission, on the Maritime Prosperity Zones, I saw Mr. Mazzella had his hand up earlier, and I believe he'd reached out to the clerk wanting to clarify something. Would that be okay if you—. If you'd give him a quick second referring to the mayor? Yeah, yeah, um, I, I was trying to not push this on, so I was, I, I was shutting— I, I asked him not to. So you'd like to move on?

Yeah, I'm going to hold where I'm at. Okay, okay, moving on here. Assembly member comments. Does any assembly member have comments?

Yes, Mayor, I do. I have. I remember— mute you. Yeah, I want to thank the electrical, Carl and Steve, and for their patience in answering my questions. I know, I'm sure Carl's tired of hearing from me.

I won't send any more 2 o'clock in the morning emails to you wondering what the heck is going on here, but I appreciate your patience in answering all my questions. I really do, and I mean that sincerely. Thank you.

Schwartz. Oh, just, uh, I was thinking about Mr. Torson and his service and lifelong resident, raising kids here, raising family, and, uh, his service to the community. And then I was reminiscing about, um, he was on the 1980 state wrestling champion team. So congratulations, Derek.

Appreciate it. Yes, thank you. Yes, by all means, to all the employees, yes, retire. Anything, any other comments? Member Stan Gregor.

Yeah, just a brief recognition of Mr. John Haverlik. Bumped into him in the post office and they're planning to move south to be closer to family, which I totally get.

Mr. Haverlik is, on a personal note, is the reason I have a small business in town. At the time, he wanted to really promote small business, so we were looking for office space and he's like, Well, $100 a month or 10%, whatever is less. So as a new business, he just more or less gave us the space, built us the space in fact, and we've been in business going on 17 years now and that's because of John Haverlick. We were looking at several different locations, some of them not here in Petersburg, and I'm very grateful on a professional level to just him wanting to support small businesses in the community. And on a second recognition, And I don't know if this is a thank you to John or not, but Mr. Haverlik was the one who convinced me to originally run for the Assembly.

John was seated here at the time, and there was an open seat, and he encouraged me to put my name in, and I did and got shot down. And then he's like, he apologizes, like, I thought you were going to get appointed. We didn't. That's the way those things go. And a year later, he came up to me and said, I really think you'd be good at this role.

I'd like to serve with you. With you. And so Mr. Haverlik has shaped my life in several different ways, and just wanted to publicly recognize that goofy son of a gun, Mr. John Haverlik. Appreciate you, sir. Thanks.

Other recognitions? Member Newman. Yeah, recently last week I had the wonderful privilege of playing baseball against the Petersburg Viking High School baseball team, and I was not just impressed by like an 80-mile-an-hour fastball, but also the wonderful program that Coach Engel has been working very hard on for quite a few years, and a bunch of really outstanding, fine young men. Decades. Decades.

Yeah. Thank you. Yeah, one more recognition. I wanted to thank Parks and Rec and Public Works and the street guys for figuring out the handicapped parking spot up behind the community gym. There was a request from community members about trying to make it more accessible, and I think it was great that the department heads put their heads together and figured out a solution to an issue that, that was a concern of the community members.

I just want to say thank you.

Other recognitions? Do I have a motion to adjourn? So moved. Second. Moving to second.

All those in favor? Aye. Meeting is adjourned.