Anchorage Assembly: Planning & Zoning - 2027 CIB 2027-2032 CIP Work Session Recording

Okay, it is 5:31, so we'll get the work session started. See a couple few Muni folks in the room.

Does somebody from planning want to introduce what's going on here?

Chair Spinelli, we have in the room with us the Director of OMB who is prepared to make a presentation if requested. We also have Director Dole, who I think would also like to speak. And then we also have a presentation from Long Range Planning on the memo that you all have received on the topic.

Yeah. Okay. Well, should we start with the planning presentation like we normally would, or are we doing something different? What do we want to do? I'm seeing a nod from the Director of OMB, so I think if we start with the planning presentation, that would work great, just with the understanding that we do have limited time and we want to save some space for questions and for OMB to make their presentation as well.

Yes. And we do need to wrap up by 6:15 to have time to get ready for the meeting. All right. Let's go. Good evening, Commissioners.

Daniel McKenna-Foster, Long Range Planning. I will go through very quickly on these slides, but it is really just sort of a snapshot of some of the things you have seen in the memo. So the Code requires PC to review both the MOA CIP and CIB and the school district CIP/CIB. We do it every year. Long Range Planning brings CIP to PCC, a review, you all make a recommendation and it goes further.

We're not generally involved in creating the budget, just reviewing it. This is the section, I believe it's 2103, that the other powers and duties of the Planning and Zoning Commission shall review and make recommendations to the Assembly and School Board regarding the annual capital improvement program of the municipality and school district. 2040 Land Use Plan speaks to the need to align capital planning with the plans. You know, this is in 2040. 2017 Said, given the reality of diminishing state operating capital, the importance of maintaining existing infrastructure investments, cornerstone in Planning 2040, Coordination and focusing public funding on new infrastructure improvements and serves those areas best able to accept new growth.

And there's also this policy to land use policy 2041.5, align Anchorage's land use, transportation, and infrastructure planning design guidelines and investments. Account for existing infrastructure and transportation system capacity and plant facility investments when determining areas of growth. Link capital improvement priorities with elements of the comprehensive plan, including the 2040 and area-specific plans. So with that, and I apologize, I think the actual binders are coming, so we will have some paper copies for the meeting. But this is the map of the proposed project for 2027.

I think you've probably seen a digital version as well. Just an overview of sort of our review is, of course, everybody's heard Anchorage faces considerable uncertainty about revenue and expenditures for municipal operations in the coming years. The, you know, some of the big expenditure areas are PM&E road projects, public transportation, maintenance operations, police Police and Fire for the period of 2027 to 2032. Now, all these kind of come from different places, some from federal, some from state, some from bonds. PM&E costs are budgeted to consume about 60% of the bond funding for the period, although PM&E staff have noted in discussions that all funding may not be used.

We were able to talk with a few of them a few days ago, and they noted that. And again, while the Comprehensive Plan calls for this alignment, sometimes it seems that, you know, quite frankly, the need is greater than the resources available. So it is hard to align that.

And that's not to impugn anybody or say anything. It's just we are dealing with a situation where 20 years ago, we got a lot more state funding. We could do a lot more things. And today, we just can't. And so finally, zoning and land use can be used to encourage targeted investments around capital investments like roads or schools or that sort of thing.

And the municipality can use tools such as zoning to encourage growth in these areas. So just wanted to show a couple of data on specific projects, future and past, and think about how do projects align with the plans. And again, this is— These are tricky, right? Because projects take a long time. Funding sources change over time.

And it's difficult to align things. You know, many people— there's the big comprehensive plan. There's area-wide plans. There's a lot of pieces. So it's difficult to do, especially with such a large area.

So here's a future project, 57th and 58th Avenues. This project has been sort of on the list for a couple of years. It was originally going to be $4 million, then went to $4.2 million. And then in the latest budget, it's about $6.7 million. This is what it looks like.

It's the Norand subdivision. And it's really right here. This is an interesting one because this is an area that probably doesn't have a lot of through traffic. Probably most people benefiting from this investment will be the ones living there. So it's interesting to think from a long-term planning perspective about where we focus our resources, where we make our investments, and are the land use and plans lining up with that.

So I think there are about 57 dwelling units here. So it's a pretty big investment, $6.7 million. Not that big in the cost of road projects. But just looking at this from a long-range lens, thinking about— This is an area that in the future is designated to stay about the same. So this is one area where you can look at zoning and land use and think about when we make decisions about how we invest, should we be looking at the plan?

Do we expect a lot more growth in that area? Do we expect things to change in that area? So we're not really taking a position one way or another. We're just presenting these numbers. But this in the future is pretty much projected to stay about the same under the 2040 Land Use Plan.

Another thing we've looked at is just looking at projects in the past and just seeing how those projects aligned.

Align with the plan? Did they solve the problems we were trying to solve? Did people get what they were looking for out of it? This project is Dubin Avenue from Patterson to Muldoon. Let's see, here's a picture of it.

It's about half a mile or so. Initially, again, as I mentioned, the initial design for this was paid for the state back in 2012. So things were different back then. And the expectations at the time were probably really different about where the funding would come from. 2016, Budget was $7.5 million.

Then 2017 went down a little bit. The final cost was around $8.2 million. You're thinking, OK, what does this have to do with the 2026 budget? We're looking at what this road looked like initially and what the road became. It became a bigger road.

It has a lot more infrastructure around it. Those retaining walls are expensive. The curb is expensive. That guardrail is expensive. So those are great.

But in the long term, that does become more stuff we have to maintain and more infrastructure that gets on our books. And so that's one way to look at many of these investments. There's not only the initial capital cost, but there's long-term maintenance cost as well. One thing that's interesting about this one and just measuring, is this what we wanted? Is this what people were looking for?

I believe the 85th speed percentile went from 28 miles per hour in 2013 to 37 in 2025. So it does look like people were driving faster on this road. I think at the same time, volume actually went down on the road. And in 2013, about 12% of drivers were going over 35 miles per hour. In 2025, about 27.3% were going over 35 miles per hour.

So this is just the data. We're just saying that it's interesting to look at these projects and think about when we make an investment. We spent a lot of money. This is a really nice facility, right? It's a really well-designed facility.

But there are costs associated with that. Behavior might change as a result of that. And then after that, how does that cost factor into things long term? Another project that we're here to talk about— and I see we have the AMAS director here. They know a lot about this project as well— Academy Vanguard off of Abbott.

This project has been basically identified as a need since about 2009. So a bit over 15 years ago. Initially, it's sort of this area, the intersection. And it's preparing for what might one day be an undercrossing under the Seward Highway. So that's been in the books for a long time, been discussed for a long time.

The project was originally around $8.7 million, went to $11 million. In the 2025 design report, it's going to be $20 million. And in 2026 budget, it's budgeted at about $21.2 million. Now again, we heard that what it's budgeted for, it doesn't mean they're going to use all of that. Well, you know, so— but it does show that many of these projects, they start start in a different time and then over time, the cost just tend to increase, right?

So this one is interesting. I'll skip this and just thinking about the original purpose and need maybe has changed slightly. And so that's another thing is we have projects that last a long time and the purpose and need begins to change over time. One thing that's interesting about this and others— actually, sorry. So we've already spent a lot of money on this.

This is already— you know, we haven't built it yet, but we've had 2 contract amendments. It's been $2 million. And then other pieces too, is there are sort of attendant pieces of projects like this, is the muni purchased this property. So we now have a property that the muni owns that's no longer producing tax value or as much tax revenue. So you can see it went from about $11,000 or $12,000 a year to now producing about $300,000.

And again, that's— you have to break eggs to make omelets, right? But there is a cost to some of these. And especially when they sit, there are other costs that don't always factor in. And then even small stuff like the cost of demolishing the building on the property we're holding, $134,000.

And then also just looking at the purpose and need. Is this still solving the problem we want it to solve? Per— I think this is a KDOT— they project there's going to be 14,000 vehicles here in the future. So could be. It's hard to say.

I will— we've mentioned this before. When we've gone back and looked at many of these traffic projections over years and on many big projects, in most cases, we found that the projections were often over than what the results were. So again, you build for a high volume. Whether you get that volume or not, you still have that much infrastructure that you have to pay for for that volume. So there are some maybe interesting questions there about digging into what we're building, to what scale we're building, and what the long-term costs are.

Another piece is— and many of you working on road projects have probably seen this— is many times our projects, they have to ask for exceptions from our own standards. The DCM is the Design Criteria Manual. And in many projects, we see that— The standards no longer seem to necessarily be aligning what people are asking for. So in this Academy Vanguard project, they were asking for 4 exemptions. And this is from rules.

We sort of— the meeting asks itself if we can exempt ourselves. But this is a process too, right? Having to pay for somebody to go through this and not be able to design it firsthand. So you're again thinking, well, what does this have to do with planning, this and that? We are working with PM&E on updating the streets and highways plan.

And also, they're working on the DCM, the Design Criteria Manual. So are there pieces in what we can change in the standards that impact impact the cost of these capital projects long term. And that is something that we can take an active role in. And we've seen this with other cases too. This is the Spinard project.

They also had to take exceptions to standards. I think you all have seen when we see a number of variances on cases, right, we tend to say, maybe we could change the standard in the code because we're always approving the variances and people are always asking for the same thing. So there seem to be— maybe there's some examples of that across the municipality. And then future project, this is an interesting one just because Arts Alley paving has been on the books Anchorage, you know, for years, great project. 2018, We— and I don't know if these were fulfilled, but this is kind of just what got budgeted.

In this latest version, it's about $3.5 million. And we mention this because there's been a lot of discussion here about housing and zoning, a lot of discussions about alleys and alley access and how alleys affect urban design. Really, what it comes down to is when you have alleys, it allows a really different type of built environment, something that we really hear people value, right? They want fewer driveways on the front. They want more of that sort of street urban feeling.

The alley access requirement is how we affect that. So this project of Arts of Alley Paving— I've got an extra S there, I apologize— is really related to that, right? By doing that, especially in the areas that have unpaved alleys. So everywhere on this map that's in red is an unpaved alley. So if this program continues, it's the kind of thing where this type of investment is enabling that type of development that people have been telling us they really, really want.

So it's kind of a chain to get there. There is a direct connection between this type of investment and the kind of things you all look at. And so you'll assume, as I'm sure you see, you saw in the packet, and I won't go through it really quickly, we just talk about some of the trends we're seeing with recent changes to Title 21, the land use plan, school district closures. We talked about that a little bit. As schools close, travel behavior changes around it.

And then that seems to end up changing the road designs around the schools, charter schools or neighborhood schools. Road projects under DOT control that get transferred to the MOA, like Fireweed, for example, is one, but there have been many of those. AMATS covering the cost of a lot of local projects. Sometimes we start a project, the money is no longer there, and AMATS has to step in to fund that. And so AMATS, which generally is doing big regional projects, has to do a lot of these smaller projects.

Long Range Transportation Strategy, Right-of-Way Management Strategy, drainage, stormwater utility potential, new service areas, 10,000 homes, Ted Stevens International Airport expansion over time. That's an interesting one, because if you read the master plan, it seems like they really kind of did that without plugging it into the broader system. Which is— could have been an opportunity maybe to connect with our great bus lines or maybe some of our great PATH infrastructure we have over there. So our recommendations, these are just general, right? These aren't specifically for the Commission to make a proposal, but it's just generally thinking.

Align investments with big picture priorities. That's pretty, you know, kind of a non-brainer, no-brainer. Think about treating capital projects to spur other investments. You know, invest in areas that we want to see more development. What, you know, Comp Plan says in areas of growth and centers and corridors.

Some projects seem to have been project list for years, but no longer maybe have a connection to any present need. There's no good way to off-ramp projects that maybe no longer are needed. And if things don't align with the Comprehensive Plan guidance, then maybe update the Comprehensive Plan, right? If we keep doing projects where people need them, but the plan doesn't support it, maybe we need to look at the plan, which there probably will be a plan update in the next few years. And finally, the long-term impacts of road infrastructure and attendant infrastructure, right?

Like everything we build, we're going to have to maintain, or somebody's going to have to maintain, or somebody's going to have to pay to maintain. So just considering that. And we've had that discussion many times. So we saw in the Long Range Transportation Strategy, a big priority is just consider maintenance costs when you're talking about the cost of the project. And finally, the maps always show these initial priority reinvestment focus areas.

The— while the tool exists to create a reinvestment focus area, we've never actually created one. So it's this weird kind of situation of just people expecting, oh, that's the reinvestment focus area, what do we get out of that, even though we've never formally gone through the process to designate it. That has to be approved by the Assembly. With that, any questions? Or maybe I'll let OMB Director or anybody else go forward.

Yeah. I think we've used up one-third of our time, so we should let— go to the OMB Director And then we'll go for questions from there. So hang on to your questions.

Good evening, Planning and Zoning Commission. My name is Ona Brause. I'm the Director of the Office of Management and Budget. Because we are short on time, I would like to know the Commission's interest. We have two options here.

The presentation material includes both the general government operating overview and the specific capital detail by project. When I've done this in the past, we sort of do some some of the general government information because the Commission finds it interesting in terms of the flavor of the rest of the Capitol design. But I'm more than happy to adjust for what the information is most useful for.

Any feedback?

General. I'm hearing general. General. Will do. The presentation materials that we have in front of you— I don't know if we have a slide deck that can go up on the big screen, but you have it printed in front of you, and I believe it should be available online.

The 2027 proposed capital improvement budget and program review starts with our general government and 6-year fiscal outlook, and then we go into the general government capital budget and department review. The, the general government capital budget does not include any of the capital projects specifically assigned or performed by the utilities and enterprises, so any AWU infrastructure or solid waste infrastructure are not part of this presentation. Those are utility capital budgets, and this is the general government process, so we talk about the general government department specifically. Um, if we go to page 4 of the slide deck, you see this is the review of the annual budget process. There are two separate processes, one for capital and one for operating.

They go through different review and development phases, but they all land in the same final approval cycle at both approved and revised in November and April. That's our traditional budget process, and nothing there has changed since being before the commission last. The next page is Mayor's Priorities. These are the pillars that the budget is drafted under, with the understanding that the efforts under good government, improving safe streets and trails for safe Anchorage, and building our future future for economic development are all part of the considerations that we take when we are operating in our departments and doing work throughout the year. And that is the focus we are pushing towards all of our outcomes.

The next page is the 2027 priority list: continuing to build a strong local government, strengthening the municipality's recreation economy, revitalizing and re-energizing neighborhoods, as well as common sense solutions for energy resiliency and preparing for growth. Any questions so far?

Okay. Next, page 7, the 2027 budget highlights. Overall, the capital budget continues to invest in street maintenance, supports existing public safety efforts and infrastructure, as well as proposing some new opportunities: tackling the housing crisis, invigorating Anchorage public spaces, and funding crisis care outreach and connections to housing. Overall, all the, uh, the funding of crisis care connections to housing, that's not just municipal dollars that are in that category of activity. There is federal dollars, state dollars, private dollars all being braided together in order to get to the system that we currently have, which is much more stable than the system we had a few years ago.

But we are still working on improvements. Next page on slide 8. Community development, economic indicators, specifically the unemployment rate at 4.2%. Uh, here the slide deck says, uh, that as of today, our new housing permits are 428, 7% more than all of last year. I believe Director Dahl can tell us that that number is even higher than when this deck was originally created.

Um, and, uh, the overall private sector growth associated with many of the large projects Mr. McKenna-Foster mentioned some of them. There are expansion out at the airport, the Touchmark Senior Facility. I will tell you as a person who has lived in that area my entire life that I have been waiting for that corner to turn into something, and it's turning into something good. So I think that that plus many of the other projects that are already moving on the private sector side, including the J-Bear Fighter Town expansion, if those those of you who may not have heard about this specifically, um, Jay Bear is potentially bringing thousands more residents to Anchorage that will contribute to our local economy. And preparing for that growth is part of this budgeting process that we are going through right now, understanding how Anchorage is changing and what the landscape looks like, and being prepared to capture that opportunity as we can with what we have or what we can make by then.

Any questions?

Many, I'm sure. The next page, the slide 9, looming fiscal cliff, $15 million budget gap that has been talked about in the press. We avoided the cliff this year by using one-time funding specifically from some legacy MLNP accounts accounts, as well as an increased general government dividend from Anchorage Hydropower, which is the utility result of the MLNP sale. And we also reduced vacant positions within a handful of departments that were either deemed duplicative to current processes or were proposed by the departments to be deleted. That was about $1 million in reductions.

And we also cut some of the contractual service costs within street maintenance because their labor team is now staffed up as opposed to 40% vacant. So they are able to perform the duties in-house as opposed to via contracts. Slide 10, the challenges ahead. As I said, we closed $15 million budget gap this year. The projected gap for next year, as we will see on one of the slides ahead, is $15 million plus because there are projections and considerations that are not currently included in the fiscal program that we know are costs that are coming.

So we project the potential deficit for 2028 to be between $15 and $30 million. They are is significantly less state funding, decreased alcohol and marijuana tax revenue, and not as much federal support as has— as we have had in the past, as well as very limited one-time funds left. Why? As I said, we have spent all the remaining balance of the MLNP sale account and some of our other one-time dollars over the last 3 years. Uh, slide 12 is the key funding source changes overall between the tax cap and all of the other combined service areas.

It's a property tax increase of $19.8 million, which on the next slide, 13, you'll see totals $11 per $100,000 of assessed valuation. So the property tax increase for the 2027 proposed budget is $11 per $100,000. Any questions there?

Okay, the next slide, slide 14, the property tax comparison. This is always fun for people who haven't seen this detail before, but in the 1980s our operating budget was $194 million, $625 million in 2025 dollars, and In 2025, our budget was $648 million, which is $500 less per capita than in the '80s. So we are spending less money than we were 40 years ago doing what we're doing right now. And it's not getting us as far because we are also missing about $100 to $150 million of state funding every single year. We're aware of that because it lands on our streets and our schools.

There is not enough funding to support the needs of the community.

Next slide is the department percentage. These are all of our municipal departments and their total, uh, budget overall. So you can see how they rank on spend. Police, fire, maintenance and operations, and debt service are the top 4 and have been the top 4 in municipal operations, I think, forever, at a minimum for the last 20 years on cost.

Next slide are the key direct cost changes. You see the adjustment between the revised budget to the proposed budget.

And slide 17 are the financing sources. These are the— this is the kind of money that the budget is made up of. Slide 18 are the budget categories. That's where we spend all the money. We have 60% property taxes and 60% salaries and benefits.

That is not entirely a coincidence, but it is that we try to fund the recurring costs with recurring money. And the recurring money that happens at the municipality are property taxes. The questions that we ask our voters every single year are capital budget. Those are not programmatic dollars. That is voter-approved, and we cannot bank on it in order to make plans happen.

That's why we have a year-over-year process that could do better if we had a longer planning process with funds attached. As of right now, the only funds attached within the general government operating budget are $475,000 for maintenance and operations within facilities. There are small dollar amounts of O&M increments that have been added over time to the road projects, but that is not enough of a budget to make the maintenance and operations of all of these facilities work. The budget constraints of the municipality over the last 20 years, but over all 50 years, are very constrained by the way we do business and the way we ask our residents questions about what they want. So part of this, as Mr. McKenna-Foster mentioned, is that it takes some change to move into a transition space.

And that is where we are right now. So when we are looking at the demand spans across the community, millions and millions, billions of dollars are necessary for all of the infrastructure that we need to be the community we want to be. We do not have a funding stream that provides that funding. The year-over-year process for our capital investments is a challenge to make a long-range plan and actually assign those values that exist in our plan to our built environment. We are 10, 15, 20 years behind all of that infrastructure.

The next slide, we'll skip through the org chart changes.

I should actually mention those. We made some adjustments to the org chart with the removal of the Chief Administrative Officer and restructured back to a more traditional traditional municipal operations that includes the municipal manager and the chief fiscal officer, but now has the economic and community development director reporting directly to the mayor and involved in all of the conversations for planning and operations across the board that all of the other senior managers have so that there can be an integrated process in how we think about these things.

The next slide is the 6-year fiscal program. As I mentioned, that is the outlook on the next 6 years. The bottom line on slide 20 shows you the projected deficits, but these numbers are an apples-to-apples comparison. They are not every apple we have in the comparison, so there are items that are left out out that we know our cost increases in the millions of dollars category, mostly on the labor side. So we have seen that in the last 2 years, the missing variables from that year-over-year comparison are between $5 and $7 million of additional expense that are not currently included in these projections.

Any questions? Okay. On to the next, the capital budget and facilities segment. The actual— oh, this is the wrong deck, but that's okay. You can skip ahead to the right one.

Sorry to interrupt. This is from the, I think, a different presentation. That was the mayor's on the 16th. So. Scroll forward to Section 3.

Yep, there you go. Okay, capital budget goals, the next slide. There you go, thank you. Critical road maintenance and drainage work, including life safety access, the replacement of fire apparatus, investing in additional ambulance for better service, as well as firehouse expansion and replacement. Energy efficiency upgrades, traffic calming and pedestrian safety, and repairs and enhancements to neighborhood parks.

When you look at the next slide, this is the breakdown by general government department. So these are the departments who then manage the capital projects, and you see that the bulk of the funding comes from the bond column. The proposed $87.95 million capital budget includes all of those projects listed under bond funding, $21.4 million from state that has been acquired or state requests that will be made, federal funding that has either been acquired or will be received. Other funding comes from various places, but some of it comes through the operating budget our intergovernmental charges within the operating budget support fleet and the capital management under the fleet division. They also support some of our other maintenance departments, but they are costs under, let's say, OMB's department that end up in maintenance and operations if I drive a municipal vehicle, which I do not.

So Overall, the property tax portion of the capital budget is $87.95 on request in April. Next slide, please.

The capital improvement budget sources, as we just talked through, majority bonds and then minority state, federal, and other funding, as well as the amount of bonds being retired in 2026 and 2027. '27. Next page. The category of capital improvement budget— this is slightly different than you may have seen in the past, specifically because of the energy efficiency category of projects. We have turned the corner into what is now not only a deferred maintenance demand, but now an energy consumption demand, because the building that we are in right has a terrible energy consumption profile.

And recently, I'm sure we've all experienced this being in this room, sometimes it's really hot, sometimes it's really cold. The HVAC system within the Lusak is broken, and they had to close the library in the last month and release people from the rooms because they were 95 degrees, and then the next floor was 84 degrees, and then downstairs was 62 right? So all of these, the challenges in some of our primary community buildings because of deferred maintenance also mean that they are huge energy hogs. And so this building with an energy efficiency retrofit can save not only money but can save our community the ability to use the library, as well as the cost and consumption of gas that this building uses. So there is specific project details for energy efficiency within LUSAC, also within a sort of annual program for municipal facilities.

The Performing Arts Center has a very large energy efficiency project assigned to it. There are undebatable benefits to investing this kind of project in our deferred maintenance because it not only saves us money, it saves us the building. So any questions there? No? Next slide.

As mentioned, this is the historical State Capitol grant profile. So from 1997 forward, this is the amount of funding by municipal department that came through the state legislative budget. And this is their discretionary spending. This is not the community assistance municipal revenue sharing program that brings, or used to bring us, anywhere between $20 and $70 million a year depending on the year. This is the, as I said, the discretionary funding from the legislature itself.

And if we look in the far right, the total column of $1.15 $1.15 billion pretty much stops 10 years ago. And the $1.15 billion total is only— is less than $300 million in the last 10 years. And that $700 million differential— please go to the next slide— lives on that map. So that map would look very different if the investment with state funding had continued. But it stopped over a decade ago.

And we are just now getting to the point where we are able to accept and update our process to agree that that's probably never coming back. And what are we going to do about it? And what does that mean for the way we ask these investment questions to our community? So the traditional— bond packages are between $40 and $55 million depending on what year you look at it. This bond package is being proposed at $87.95 because of the deferred maintenance, but there is a limitation on what we can actually ask of property taxpayers.

So part of this conversation is the beginning of the full budget conversation and the review of what do we do about this and how do change? What are our priorities? And what does that mean for the planning of this community and the investment within this community? And you as commissioners already do this work. You invest your time, your effort, your brains, and you have a very specific perspective and view on what you see on a regular basis in these meetings and what that means within the community.

Part of this budget process is to to understand what you think, but also what you can do from this commission. It may not be the most proactive line of activity that you can get into, to be on the PCC commission in terms of impacting the budget. But what you know and experience on this commission can help us. So what you learn from your perspective as commissioners and community members, bring that to me, bring that to Director Doehl, bring that to Director Babb, bring that to any municipal leadership figure involved in this conversation. Come to the meetings that we are hosting with the assembly and with community councils and tell us what you think because we are listening to understand how we really can transition Anchorage into the next decade and beyond.

Respond. So, we can go through the specific department review, but I'm also happy to leave it there. I think we should open it up to questions, because we're not— we don't have a ton of time here. Maybe 10 minutes. So, okay, go ahead.

I have a couple of questions. So, the mention of the drop in the state revenue. Is that tied to the change in the oil and gas tax structure? Through the chair, no, that's the historical trend. I think that, frankly, we might see the potential for additional funding coming out of the legislature this next year depending on what happens with the state election and legislative activity.

And that actually is another factor in the timing of this conversation. We had— there are a lot of changes that are occurring right now. As I mentioned, private sector growth, Jay Bear expansion, but the state is changing the state landscape on gas line funding and what that may mean for Anchorage. There are lots of different activities that are occurring that all impact the community differently but can impact what kinds of choices we make and how we respond in those other categories. And then My— another question I had is, you know, in the matsoo, they've implemented a sales tax to help close their city's budget gap.

And, you know, we've got this looming fiscal cliff with a pretty significant budget gap. What kind of a sales or income tax would Anchorage need to be looking at to not only close the gap but reduce this risk or be able to improve our funding that we have available to like schools and other, other really essential services. Through the chair to Commissioner McKee, I believe the answer to your question is there are lots of different— not lots of— there are a handful of different revenue sources that the municipality could implement, either change what is currently levied or to implement new taxes. The magnitude of those taxes vary greatly, right? So the bed tax is a specific $4 million per cent, and a sales tax is hundreds of millions of dollars depending on how you look at it.

So the question becomes, which gap are we trying to fill and what is palatable to the community? It may not be just a bed tax or just a sales tax. It may be a blend of these, all of these outcomes at at the same time, one of the things that I look at is what are the tools within the toolbox of the municipality. And right now we have two tools: property taxes via the tax cap that is on an annual sort of calculated basis, and then the other one is, oh yeah, property taxes via the bond questions. And the other funding that comes in is on the decline in terms of the report that, you know, the numbers show us we lost $3.3 million in non-property taxes this year.

And so the question becomes, how do we really do this, and what is the transition into a different structure that lets us be who we want to be? So yes, that kind of goes back to that question is, did the MATSU with the implementation of the sales tax see a budget gap close. Could Anchorage expect to see something similar if we implemented even a sales tax just in the summer? Through the chair, I would hope so, yes. And then my last question, because I don't want to monopolize time, is the, um, the mention of the funding crisis, care outreach and connections to housing.

And, and I'm not an economist, I don't follow all of the tax laws, but my understanding was that the tax revenue generated from the sales of marijuana marijuana would be used to help implement this, and it seems like there's a lot of marijuana businesses all over the city that I would assume that's generating sufficient tax revenue to help offset the increased costs needed for fund crisis care and outreach. I don't know. Through the chair, you are correct. The challenges that the revenue streams identified in both the marijuana tax and the alcohol tax. The marijuana tax brings in about $5 million a year, and the alcohol tax brings in between $13 to $15 million a year.

The marijuana tax is dedicated to early education and, and child care. The alcohol tax is dedicated to 5 categories, uh, of which are child abuse, domestic violence prevention, first responders, uh, homelessness, mental Health Preparation and Administration is the other one. And the $15 million within that fund has been spent year over year on mostly those three categories of child abuse, sexual assault, and domestic violence prevention, as well as homelessness and first responders. So I think the real answer is $20 million is not enough for all of those very large issues, particularly early education and childcare within Anchorage. So doesn't quite get us where we want to go.

I'll jump in here and go back to the department recommendations about aligning the capital improvement program with the goals of the Comp Plan. I guess I'll ask to shine a little bit of light on the— on what we are doing here learn what the department does. You know, we have a work session in 2 weeks looking at the role of neighborhood plans, and it gave us a chance to look at the elements of the Comp Plan. In all, they total more than 1,000 pages between the comprehensive plan itself, neighborhood plans, district plans. And I think we are all getting a sense that in some ways the long-range planning process through the Comp Plan is moving in parallel with some of the capital improvement program planning.

So I would ask for— I think as we move into these conversations, I'd be very curious about OMB's suggestions or take on how we can— because I think we are a little bit overdue for a Comp Plan process— create the Comp Plan for the next 20 years and start having those conversations about how the Comp Plan can be a more useful tool in the capital improvement program.

Through the chair to Member Krishna, I will say that the Comp Plans are very useful. The challenge is when we do not have the funding available to support the execution of those Comp Plans in a knowable and practical way. And that is the limitation of the way we manage our funding in terms of a single year-over-year capital program that does not get us the $250 million that we need every year to go through our development and maintenance phases. It gives us maybe $50 million a year. So we are less than 25% funded and mostly funded in the break-fix and maintenance department as opposed to the planning and growth growing department.

So it's really about where can we put our focus and our money and design the municipal structure for what we want. It's not currently designed to be flexible and offer us millions of dollars of opportunity.

Thank you.

Any further questions? We're right around time. We got to take a break.

Any final statements from staff? Chair Spinelli, I believe that Director Doehl would like a few minutes if possible. Take it away. You're the closer. Bob Doehl, Director of Community Economic Development.

I don't need two, maybe one. We've reviewed the long-range memo staff provided you and believe some additional context is important. This document was a new approach prepared outside of the usual process and without coordination. Frankly, it was also prepared in a very compressed timeframe amid some other big requirements going on. The report was prepared without consultation with those in other departments that prepared and prioritized the capital list and how they took into account the Comprehensive Plan, the Long Range Transportation Strategy, and other planning documents.

As such, there is no opportunity to incorporate the technical information behind projects, instead relying on paper high-level project summaries going forward. Accordingly, we believe the report should be disregarded. Thank you.

All right. With that, we will adjourn the work session and get started back up at 6:30.