Seward: City Council Budget Work Session 10/27/2029

Ready, I'm turning on the mics. MP3 recorder is on.

We are streaming to YouTube. Ready when you are, Mayor McClure. I'll call this work session of the Seward City Council to order. It is October 27th, 2026, and we're still working on the budget, so I'm just going to turn it right over to the city manager to get started. Thank you, Good evening, Madam Mayor.

Tonight on our agenda for departments, we have the Public Works Director here who tackles a lot of the general fund departments and then two enterprise funds as well. The Clerk will speak to his budget. Sully will speak to hers in finance. And then we have Chief McCoy who will speak to hers in the fire department, which is also broken up into a few different different departments within there. To start tonight though, I did want to highlight a new addition that is in front of you.

Thanks to the genius brains of James and Sully, we have a general fund revenue and expenditure detail report that consolidates down all of the revenues and expenditures by individual line item across each department. And so this came up a few times last night of, oh, some things are broken down in the department, so we don't know how much they're costing us overall throughout the general fund. So I was really excited to come in this morning and hear James and Sully say, we have a really great solution for that. So the report in front of you is the revenue and expenditure detail consolidated. The clerk has also put it online next to all of the other additional work session materials that are up there as well.

But it shows the revenues and expenditures per line item. So if you go and look On page 3— was it page 3?

Yeah, oh, on page 2, software and SaaS subscriptions is about $432,000 across the whole city. And contracted services reach just about $1 million. So it is able to break those down— or not break those down, expand those out across the whole general fund to show that as well. So we're excited to share that information. And if you have any— I don't know if any questions pop up, you're just seeing it now, but it's a good tool to have as we continue these conversations as well.

Um, I will start— start this evening before I pass it off to the clerk with a department that I forgot existed, which is the boards and commissions. I didn't forget it existed, but we did consolidate them down all into one slide, and there's not necessarily a department head that would be responsible for these specifically, so I will tackle it myself by saying that the boards and commissions of the city of Seward focus on specific policy areas, provide expertise, and either make decisions or offer recommendations to guide broader governance. And if you look in your budgetary line items, they are— they begin on page 8, 9, and 10, and that covers the Historic Preservation Commission, the Port and Commerce Advisory Board, and the Planning and Zoning Commission. And so So the Historic Preservation Commission, we allocate a bit of salary to that, as well as with the Planning and Zoning Commission, we allocate salary to that as well. So that's the, um, budget's main, uh, focus is those salary bits, and then different insurance and/or travel if any of those commissioners, um, utilize that, with Planning and Zoning being the largest since they are more of a quasi-judicial group.

And there are no specific full-time employees assigned to these boards and commissions, but we have allocated a few personnel costs to those departments. The PACAB advisory board, we haven't necessarily assigned personnel because that kind of rotates on who is the leading person on that board from the city. Sometimes it's a harbormaster. In the past, it's been the deputy city manager. So we've kind of been toying with that, but overall the only real changes that we've seen there, and that has existed in the past too, is allocating that personnel.

So if there's no questions on that, I will pass it off to Chris to talk through his budget for the city clerk, which also includes all of you.

Thank you, City Manager.

So we are looking at page 7 of the budget reports.

So council and clerk, and really not too much to report here, just business as usual. A couple things I'll touch on. Councilmember Kreitz sponsored that resolution to allocate $12,000 towards the student exchange airfares for the kids going to Japan. That's already been incorporated in this, right? Yes.

And completely unrelated, they did just announce today that they're going to do Anchorage to Tokyo direct in the summer, which is really wonderful. So complete side note, but I'm very excited about that specifically for our exchange group so they don't have to fly all the way down to Seattle and then back up. But—. Very nice. That's not a plug for Alaska Air, I promise.

And then last night we talked about our regular municipal election and the cost of doing that as a standalone or combined with the borough. And next year we'll be combining our election with the borough, so it's actually just right for that. So no changes needed there.

I don't really have too much else to comment on. I think everything is just pretty dialed in at this point. Point. Like I said, business as usual.

Okay, questions? Councilmember Barnwell? Yeah, with Jodi leaving, she's irreplaceable. So why don't you just subtract the money out of that? That's a good point.

Pages—. Did you find it yet? Can we ask what page? Page 7.

It's going too deep. Thank you. Um, any other questions?

Yeah, go ahead. Thank you. Um, I know you said, uh, business as usual, but is there anything that would come along potentially that would make it not business as usual?

I would say, um, not to speak for Chris, but one thing we'll see as we finish the 2026 budget is that his elections line will actually be over budget since we had budgeted previously for the split elections, and this year was the first one that we did. And after last night's vote, the last— the budget will probably come in a little bit higher there in the elections front. Other than that, I don't anticipate any other large changes on the council side of it, but the clerk side, he Good answer. Sully might have one. One item more, um, will be the audit because our, um, accounting firm— um, audit firm, um, contract will end at the end of '27, so we need to go out for RFP.

So we probably see an increase or decrease in '27 on that line.

And yeah, so The— we'll put out an RFP at the beginning of next year for the fiscal year ending '27. So those funds would actually impact the '28 budget if that's adjusted. But then that would be adjusted with the RFP responses and any appropriations as necessary for them from there. Incredible. Yeah.

Any other questions? Don't see any. Our office does receive quite a few. Solicitation phone calls and emails from vendors trying to sell us all the latest and greatest stuff. And, you know, we've looked at a few of them for agenda management software and this and that, and I think we're doing just fine using the tools that we already have.

So I'm not anticipating any major software purchases or anything big like that.

Question about the state and federal lobbying fees. Are those everything but the elected part? So those are the—. Those are the fees that we pay to our lobbyists, and then they are also broken down into the enterprise funds as well. So all of the city departments are represented by our federal and state lobbyists.

So these dollar amounts represent The totals, but then they're allocated. In like the administrative fees, and then for the— I'm trying to think, does the Electric Department have a specific line item in there?

No, so the Electric Department does not have a specific line item for state and federal lobbyists. So those are for, um, Seb and Chris, our lobbyists in D.C. and in Juneau. Okay.

Another thing that I will note that I know has been a question in the past as well in the personnel I know that several council members choose not to accept that fiscal or that payment for being on the city council or any of the boards, but that's still something we budget for and allocate each year because it is an expected cost. So we can't make the plan based off of somebody being on council in case anything— knock on whatever— did happen. So Okay, anything else?

Not seeing anything. Good job. Wonderful. Next up, we'll switch it over to Sully in finance to talk through her big budget. And I'm trying to think if there's anything I wanted to say beforehand.

I'll just remind you too, this is the other end of the executive admin position. So you'll see the staffing dropped from 26 to 27 by 7.5, or by half a position because of that, because of that split. And Sully, I'll let you go from there. Thank you, City Manager. Um, so page 13 of your packet is the finance department budget.

Um, and I just want to mention that, um, Our department responsibilities are including budgeting, accounting, payroll, accounts payable, utility payments, and audit. And to give you an idea on how many transactions we manage across in one year, finance process around 16,000 vendors' bills, process around 3,500 accounts payable checks, around 4,000 deposits, also process around 3,000 payroll records, and that represents over around 11,000 financial transactions and records before considering our responsibilities for budgeting, investment, grant, financial reporting, audit, internal controls across the city.

One thing to highlight is that our workload remains substantially and continue supporting the financial operations on the entire city and Also, you can see for '27 and '28, we are budgeting for a full finance staff.

Since I will say maybe 7 years, this is our first time. I would also like to— not to interrupt— counteract that with the contracted services line that has significantly dropped. Since 2024. So we've been pulling away from those contracted services, and the remainder of those are not in any relationship with the previous CPA firm that we had hired, correct, whose name I don't remember right now, but Carmen Jackson. Yeah.

Um, so in our proposed budget, um, in our personal expenses, I'm proposing to have a temporary record technician to assist record retention in organization and scanning documents. And this will be implemented with a project with IT in Laserfiche.

And that initiative will improve our financial records and our public record requests more efficiently. That's the only big change in this budget. Any questions?

Questions? Council Member Drayton. I think I know the answer to this, but so our salary budget went up 33% for '26-'27. Is that because we were not— the positions weren't filled and we also weren't budgeting for for them to be filled at that time? Yes, that also.

Okay. That's correct. All right. And then that does include about 25 for a part-time technician, which I should have put on this slide as well. So I can— I'll update this slide as we send it out.

But the part-time technician to do all the scanning in the basement, which is something we've done in the past with Jason's department, our previous department when he was at Community Development. But there's a lot of old papers and documents and things that we have that are not a beneficial use of a salaried employee's time, which is kind of a weird way to say it, but we sometimes bring in somebody to just do a bunch of scanning for a long time in a part-time role. It's more for a cleaning process. In 2022, we had a forensic audit that was freezing our record for 2 years, so we couldn't have any cleaning for 2 years. So that, on top of many years that we haven't cleaned up that, and it needs some attention now.

And digitization— I can't even say the word. Never mind.

Councilmember Calhoon. Thank you, Madam Mayor. Just on the Salaries again, this also, you know, looking at the increase obviously for fully staffing, I get that part.

Do we know what the drop was with the separation of the electric billing and did that have any effect on the finance department's salaries?

When that change out happened? So that was 2 years ago, and we moved an unfunded position, so we refunded an unfunded position over there. So there, it would, you would not see any change in those budgets since it had been unfunded for a while, 'cause there was 2 technicians up at the front, and we hadn't had that in a bit. And so that kind of comes with the drop of the FY— the FTE, that half position, since those were both front desk utility counter payments, and the unfunded one went over to the Electric Department and was funded, I think. Yeah.

Other questions? Okay. Next up, we have the Fire Emergency Services and Inspections, and I'm excited to welcome Chief McCoy up to speak to her budget. But I will also do a little bit of introduction for her beforehand because, as you may be aware, she was recently promoted to this position, and so it's been a little bit of a learning curve of getting her up to speed on what the budget process was like and how we came to some of the decisions that we came to this year. But I will say that there aren't many decisions that were made that impacted this budget too much.

You'll see here that in FY27, we're actually proposing just half of a percentage increase, which shows up on there as— oh, that's for the entire— so on here you'll see $2 million, $2.17, $2.16, and $2.26, and those take into account all of the different departments that fall under the fire emergency services and extension. So that's fire, building inspection, the volunteers, the emergency prep, and the Seward Volunteer Ambulance Corps. And so I'll let Chief McCoy speak to the different responsibilities in there, but the major cost drivers that we see across these departments are the maintenance and repair of an older building, the contracted services for hydrant clearing in the winter, and then one thing I did want to point out is that we are adjusting The— we're adjusting the personnel line items to accurately reflect how firefighters are paid. And so our firefighters work very extended shifts, 24 to 72 hours, and they receive overtime in that time, but there's a very interesting subset of the firefighter payment schedule where their hourly rate is lower than you would expect because it incorporates that overtime into the base salary. So a firefighter, when they're hired, might technically be hired at $22 an hour, but that's calculated based on the understanding that since they're gonna work overnight, be on, be on staff and in the building 24 hours for their shift, or 72 hours for their shift if that's the schedule, it bakes that overtime in.

So you'll see the overtime jumps to a budgeted of $300— $31,000, not $300, $31,000. And that's more in line and reflection with how a fire department actually works budgetarily. It's also a very interesting thing to explain when you do post a firefighter job position and say, why would anybody want to apply for the job at, say, $23 an hour? Or when you look at it on our pay scale, you're like, ah, that's crazy. But as you take into account the position position fully funded and what the hours break out to, that is the breakdown there.

We also have— yeah, we also included on page— so this is from page 19 to 23. And if you look on page 21, we included a line item, an additional funding of $20,000 in '27 and '28 Under contracted services and emergency preparedness, and this was actually a request and conversation we had with the Deputy City Manager about some of the things that we wanted to do and look into and just make sure we're prepared for as we grow as a city, see increased visitation, make sure we do some tabletop exercises, reach out to some consultants about things that are necessary in the emergency preparedness world. So I wanted to add some funds there to make sure that we are doing everything we can and staying on top of that. I think that is everything that I would like to highlight. Chief McCoy, is there anything you'd like to add?

Um, this is on. Can you hear me? Okay. Yeah, so as far as— she touched on a lot of department responsibilities. Going down the breakthroughs starting with fire.

I believe that's on page 19, correct? Yeah. Um, our priority, I would say, driven by that department responsibility, is 24/7, 365 emergency response. We're here to, you know, help those in need at any time that they need it. We also are encouraged in trying to spread risk reduction through inspections, that kind of thing, or also public education, which we just did up at the elementary school for the students this week.

So we really try to reach out, and it's not just us as the paid staff. We try to choreograph and orchestrate all of this, but also our volunteers help us tremendously in this. So that's where, jumping to page 19, or I believe 20, it's under the volunteers. Um, you know, a lot of it is spreading room or word of mouth for recruitment and retention. So we're trying to get that out, but our volunteers are out there in the public.

So setting that precedence of trying to get more people involved in joining, you know, we're a team that way. And I also want to give a little shout out to our Fire Explorers, which is kind of a new program that we've just kicked off. Our Explorers are younger, they're still in school, but that program has really gotten us out in the community and They're doing public education with a little more fire involvement and experience as well as EMS. So they're really helping us out along with our volunteers. And of course we rely a lot on our volunteers for emergency response.

So that 24-hour response cannot happen without volunteers. We want to give them due credit. Emergency preparedness, it's always about risk reduction. Kat had just mentioned our emergency emergency— about emergency preparedness and the contract services for really looking into our community and coming up with a plan for better awareness, you know, getting the word out, that kind of thing. So really trying to educate the public on how we can better advise in an emergency situation and where people can go.

So looking into that. You know, with SVAC, they're community service, so we support local volunteer organizations. So we're supporting them, they support us. They're equally as important as we are here in the city. So, um, and then building inspections, it's not as big in the limelight.

I want to say permitting is just as important. Code compliance and doing our plan review process is part of what really helps. That's why that budget is there, and that's on Page 23, which there's not a lot of significant change on that. Um, the major cost drivers— I know the city manager had talked about repairable buildings, we are aware of that, but also we have apparatus too to respond to these incidents, and they're at their age too. So we're starting to see some outdated apparatus that are in need of, you know, funds for replacement repair so we can keep them on the road and keep them responding.

And the only other thing I would say with contracted services is the inspection, testing, and maintenance of the fire alarms and sprinkler suppression systems for the city buildings. We're going out to RFP for that in the future here, coming up right away actually. So you'll see that soon, but that's also under a contracted service that we're trying to perform and provide. So, and then she had talked about our overtime and reflecting actually how it looks so we can provide these services to the public. That's kind of the question.

Councilmember Barnwell wants to start. Yeah, I have a few questions. One, speaking of capital equipment on line 8103, you don't have anything beyond this year, but you mentioned that you have expectations of capital equipment. Am I reading the Wrong line for that, or? So capital equipment is included in the general fund budget if it is under $10,000.

Under $15,000? Under $20,000. Under $20,000. So you won't see any capital in the budget if it's over $20,000. And so as we talk on Thursday about our capital improvement plan, We have two projects under the fire department for FY '27 and '28, which are the fire hoses for Engine 2 and Engine 4, which need to be replaced.

And then, yeah, so the Engine 4 supply hose is in '28, and the Engine 2 is in '27. And then one of the, the bigger discussion about the different apparatus is something that will, I'll actually segue into after Kate and before Doug to talk a little bit about our motor pool plan over the next 2 years, which I'll rip the Band-Aid off and tell you right now, we don't have one yet because we're waiting for our contractors to get back with that updated. So we'll talk a little bit more about that. But for the apparatus—. Apparati?

Apparatuses— we're not putting that off. We're just waiting for more information to make sure we're making the right decisions. In moving forward. Okay, and then just follow up, um, just so I understand the progression of your, um, of the fire services, you have 8, uh, employees now. What was that trend prior to '24, or can you just kind of give us a how many people were working, say, in '20 or '21 or '22?

Do you know? What kind of—. I believe over the past few years, prior to starting— prior to my time as city manager, there was the addition of one firefighter, and now we have three firefighters. So I would say it probably went from 5 to 8 so that we have that on-staff emergency response 24/7. Okay.

And then all of that staff how many are EMT or EMT-2, or how are you moving in that direction? Because I vaguely remember that we were talking to you guys about the fact that you're kind of improving that aspect. We are actually, and I'm proud to say, one of our full-time firefighters on the entry level just received her AEMT, so we're very happy about that. Each person on the department is building their own way up in the EMS realm of things. Some of our core folks it's a side, you know, a volunteer side of things, like the building official, for example, is bettering himself with the EMS emergency side of things by building his career and career potential that way.

But yeah, for the most part, our core staff, those 3 firefighters that are 24/7, we only have one that is not an AEMT right now and is working towards that certification right now. I'll also add, just as a side note to that, through our union contract with Seward Public Employees Association, something that was created years ago was that employees can get a small pay raise for doing certain training across the board in their department on their own time, but that isn't necessarily 100% related to what their job duties are, but could be helpful in the community or in their job duties. And one of the ones that is on there for the entire city of Seward is becoming an EMT-1/2 or an advanced EMT if it's not within your job description. And that's something that we're kind of very supportive of to expand that EMS services to get new recruits for the SBAC organization if, if that's their goal, or just be on hand in the city of Seward to make sure that there's EMS and responses when necessary. And so I think the building official is a really good example of somebody who works for the fire department but also volunteers for SBAC and has worked his way through that to make a, um, like a great— yeah, a great volunteer in the community above and beyond his normal job duties.

So we're talking about Jeremy. I don't want to say names.

Last question, if I can remember it here.

Um, I have a question. I believe you.

Oh, can you remind me or tell us what your, uh, how many vehicles you have right now? What are— do you have a list or off the top of your head? Yeah, I, I have a top list of the age of 4 of our vehicles. Um, we have a few other additions that we just brought in, so I don't want to forget the John Foster, for example. So there's the side-by-side, the John Foster.

Um, we have Engine 1, which is one of our older pumper apparatus HESS, if you will. Truck 35 is our aerial apparatus that we have stationed across the bay right now. Unfortunately, not in close city limits. It would be nice to have that for our ISO rating. We have Engine 2— or sorry, Rescue 2 and Rescue 1, which are EMS and heavy equipment extrication-type response vehicles.

And then we have our 2 inside city limits pumper apparatus, which is Engine 2, and then Engine 4 has a bigger tank so it can go outside of city limits, but they're interchangeably both pumpers. So, and sorry, this is the last question, I promise. Uh, how are you guys coordinating between SFAC, Bear Creek, Low Point, particularly like for both employees and equipment or vehicles? So, um, we, as far as maintenance Is that the question? I don't know.

I mean, do you share, uh, when you're buying a new truck, is that confer— or did you confer with North Green? Like, our apparatus that we have just purchased and worked with, um, we maintain license, maintain the equipment on it, that kind of thing. We don't own an ambulance, so of course when we have a medical call, we rely on them to be trans— you know, assist them with transporting, or they'll— we'll do the transport. Um, but as far as like infrastructure, there just hasn't been— historically, within reason, there hasn't been the crossover there, um, just because we sort of separately respond to a call. We come in our vehicles, they come in theirs.

Um, other than the pump— the pump trucks would be—. Yeah, but they still come to our call. So it's like, even if we have a structure fire in town ASVAC's gonna respond, they come with us. So whether it's anything that way, even training, you know, we'll be at a shared training fire ground and if we're doing operations, they usually have an ambulance out there that can come up and work with us. So we jointly go together, I wouldn't say like the payment, I don't know if like if you're looking for financial—.

No, I'm just kind of coordination, like what level. Like, is the question you're asking When— if Bear Creek is gonna buy a new fire apparatus, do they call Kate and say, hey, is this a fire apparatus that you think would be useful? Yeah. Okay, now that is something that's quite collaborative, just because we talk about those things quite often. So if there's a piece of training equipment that's very expensive, like a mannequin or something like that, uh, we collaborate together, even with the hospital, to try to work out Um, not an overlap in a piece of equipment, if that makes sense.

So we share intermixed. If Bear Creek has something, uh, we have, for example, a fit tester, um, piece of equipment that's very expensive, has to be calibrated every year. We jointly split the cost for that calibration, but it just resides in city limits. We share it with Bear Creek. That helps.

Thank you. Yeah. Councilmember—. Thanks, Madam Mayor. Just a quick question on building inspection part, the salaries for that is split up between people, I'm assuming.

I don't think one building inspector makes $197,000. No, there is multiple positions in that department.

It includes the chief and the deputy chief's time as well. They're broken up into individual departments And I believe administration. And administration, yeah. I don't want to say— we've said Jerry Bing's name, he does not make that much.

But yeah. Other questions up here? Council Member Draper. And I think this is more of a general question. It just jumped out at me that the workers' comp policies for this department are much higher than the other ones, which you can imagine is true, but it made me I wonder about the level of detail that goes into making these benefit on our budget here.

I mean, they're specific to the individuals who are in it as far as their health insurance and their workers' comp. So we haven't, it's an interesting balance when you think about personnel, and it's something that James did a lot of work on our big behemoth of a personnel spreadsheet. And so, I would say, like, some employees are technically cheaper in the grand scheme of things if they're a single individual, no family. Administration is something that workers' comp is cheap. Yeah.

Because it's the lowest risk, right? I would disagree. Paper cut, right? No, and then for the higher risk positions you have, it's highest costs. Yeah, I just didn't realize that we were just like spreading it across and it's sort of an equal way.

It's just specific to the individuals. And then the same thing with health insurance, I imagine. Well, maybe not such, but there's some, some have families, some are single. Yeah, so with a fuller staff, with a full staff, we're able to calculate it down a bit more exact, saying, hey, these are, this is the makeup of the health insurance cost for each individual employee as it stands right now, but adding some variance in there, recognizing that things do change. So it's a little bit of, here's the information we have, a little bit of forecasting, and a little bit of fitting it for the individual departments.

Questions?

I have one. I'm looking at the SVAC page, and we've been Providing $20,000 every year to them as a— what do we call that? A shared expense? Is that stipend? It's a stipend.

So then down there, there is a volunteer fireman stipend for SVAC? They allocate it to them and they allocate it how they would like to. Okay, so that's just however they want. Yes, yep. I was just curious, 'cause— Other questions?

Okay, I'm not seeing now. Great, thank you, Kate. Thank you, great. Okay, before I invite Doug up, I did want to talk about the motor pool a little bit, recognizing I should have probably put it on one of those, but we have our two biggest motor pool people in the room tonight with Doug and Chief McCoy. And so the motor pool The Seward Vehicle Fund is an internal service fund that accumulates resources to replace city vehicles and heavy equipment such as fire trucks, graders, snow removal equipment, and fleet vehicles.

It also includes the big harbor equipment like the Syncrolift and the Travelift. City departments pay annual lease payments to the fund for the vehicles and equipment they use, which spreads the cost over useful lives, reducing the need to borrow and the impact of large purchases on annual operating budgets. And so if you look at page 57 and 58, one of the big standouts is that we are not budgeting any expenses in this department this year. And I swear this is not a cop-out, but you may remember that in August of 2026, you, um, council approved a fleet assessment and replacement plan with Mercury Associates. They were on site the first week of October and, um, and engaged with every department and saw every vehicle and is— are now looking at all the information that we sent them and coming up with a robust assessment and replacement plan.

So as we were looking at FY 27 and 28, I thought it would be disingenuous to propose something to you in this budget, recognizing that this large overhaul and assessment is on its way, also recognizing that a budget is a living document. So we anticipate coming back in the next few months, probably halfway through next year, with that assessment and some of the recommendations based off of that. And so we are not budgeting for any vehicles or equipment You will see that, um, in 2026 we did budget for and expended a few more than we usually would to catch up on some. So I'm also very comfortable in this decision as we look at the previous year. I do know that there's some vehicles, say, in fire or public works that are more pertinent than others in '27 and '28, but I think that we're in a good spot to be able to take a pause here, receive that assessment, and and come back to you with a more detailed analysis as we move forward with the motor pool fund.

Um, are there any questions or thoughts on that decision? Yeah, Councilmember, I, I just, just kind of refresh my memory. We had a big year in the last year, right? Yeah. Yes, we did.

And you told us that that would be kind of a one-off for a while. I believe so. Yeah, I think, you know, Hopefully the replacement plan doesn't come back with you need to replace every vehicle in 2028 or the world is over, which I do not believe it will be. But our goal is to have a more spread out and a more thoughtful approach rather than having one of these huge years in 2026 that says, hey, um, you need to buy 10 more police vehicles right now and a ladder truck and the Syncrolift. Did we buy the Syncro— we bought the Travelift last year, which was a huge expense.

And so that is always going to stand out a little bit higher, which goes into the harbor and their depreciation, but we'll talk about that when the harbor comes in.

Any thoughts, questions? It's— okay. Okay. Then I'm going to go back in time to the general fund to invite Doug up to talk about the public works and everything that they do, which is a lot. They have 1, 2, 3— they have 6 departments in the general fund starting on page 24 with streets and going through page 28.

Where do you want to start? What do you think? We can start if you want to go through the slide. We can go through that. Perfect.

Touch on the highlights.

Oh, I will start and say that one of the things that we talked about that is a very small and non-impactful change was on page 27, changing the name of the Community Center Department, which is the 3rd Avenue building that holds the Senior Center and the TYC and Boys and Girls Club currently to the Third Avenue Center, but Doug has done a lot of awesome research with the library on the actual origination of that building and from Werner, which is interesting. So just a little tidbit of all the fun things you learn as you're going through a budget process. Well, we were killing time just before the meeting. I kind of talked to some of them about it. Oh, you told them?

Okay. I mean, it's a pretty neat setup and it sure looked cool. School as a single. It almost had more windows across the bottom, you know, where the main floor is on 3rd Avenue, and just was more attractive at that single. And then, as I'm guessing, it was structure-wise when they built up another floor up above for the Senior Center that they probably had to shore that all up.

But it was quite interesting to see and to learn about Jack Werner and their contributions to the City of Seward. So that was pretty neat. Pretty neat on a different budget. So I guess that's one of our budgets is the Jack Warner, the Third Avenue Center. But it's, you know, it was built when they did that floor up above it, it was really done as a senior center/museum curator area.

So kind of neat history of what it was and And just the way the city grew into that sort of thing. So it's always been, once it went to that upper floor, there's always been a senior center there. The other floors have been used for some other things.

So Public Works in general, the expenditures, and you can see the different departments we have. Big thing is street department, streets with snow and ice. That's out of the general fund. We have the city shop that does the maintenance on vehicles and equipment. We do the City Hall, Community Center, and the Third Avenue Center are all separate smaller budgets for custodian and building, building maintenance in those three, and there's three budgets on that.

We also at Public Works have the water department and the wastewater sewer department. And those two are obviously very big and very important, that kind of never out in the limelight, but if— unless something goes wrong, and then it's— then it's a bad thing, you know, if we have broken lines or things here in town. So we really work on keeping those going. But those are the departments we have.

When we go through the budgets, the changes that you'll see is We did jump one position that's split between the street department. It'll be set up through the street department, but also to help with some building maintenance that we haven't been able to get done on some of these buildings, to do more of the major— get somebody that can actually do a little bit more of the plumbing end and electronic end, electric. It's just some of those things just take time, and when we're doing plumbing. We're typically pulling guys off the water or wastewater department to come and help do plumbing at City Hall, and they're not getting done what they were supposed to be doing in their other job. So working through that, we also have a new building that, you know, hopefully we can keep.

I know the borough does the major, you know, the roof and the boiler and all that. They're supposed to keep doing that stuff. But if there were things that, say, Parks and Right? They can change light bulbs, stuff, little stuff, but if there's something they need, we certainly are going to work on that too. So that would be that position, and it would be split between, say, City Hall budget for that building is the only one we have labor in as far as those three buildings.

We just condensed it all in City Hall. And then it would be split between that and streets. So, you know, I think our major drivers for public Works are going to be fuel, big thing. I mean, fuel, both heating in the building and the equipment. Depending on the year, I mean, our budget really can sway back and forth for the street department.

How much snow and bad weather do we get? You know, last year was super cold, but it wasn't— we definitely had to sand a lot more. You know, when it's a rainy one, when it's cold, we're really sanding. And going through the sand and salt out there. But otherwise, we have a big snow year, and it pretty much eats up the budget.

So we really have a lot to be— we want to be as proactive as we can, be ready for things. But we certainly are reactive to what happens here in the city. We also— it's not a department, but part of Public Works is responding to the flood hazards. Especially down at the falls, the landslide that we had a couple years ago. Those are big, big things that jump out, and we're the ones down there.

We kind of are responding to any of those emergencies as they come up and hopefully preventing what's going on with it. That can be a big cost in there for contract service, but normally on a, say, a landslide, it becomes a disaster type type thing and through FEMA or those. So we have to work those and make that work. But as far as, that's the biggest change we have is just going to be our, what's our fuel going to be? Is it going to stick where it's at, go up or down?

Makes a huge difference. And then, you know, adding that one position is always, you know, it's a big thing, but it certainly is going to help our service in both the buildings and on the streets to be able to get things taken care of. There's some ups and downs. As finance and city manager, we went through the budget, and there's definitely some places where they— you can see some cuts on things that drop down certain areas. Again, it's one of those budgets when you're reactive.

If we have a big snow year, we may be coming back to say, look, we've already used up the snow budget, or we're needing some more, and that would be something something that instead of budgeting for it in the budget and making the budget big and not using it, we're working to utilize what we have, and if we need something more, we'll come back. Yeah, to follow up on that, if you look, we have a 50% drop in our winter sand salt line item on page 24, and previously we've always budgeted for about $115,000 to $100,000, but looking back historically over the past We went back, I went back to 2022. We've never really broken that $50,000 mark. And so being a little bit more prudent of how we're budgeting to make sure that we're not always anticipating the absolute worst and instead budgeting with a little bit more of this is the average. If there is something that's major that's going on, we'd love to come back to you and to have that discussion rather than planning for that and saying that, It's going to snow, snow so much, which as a skier I would like, but I did tell Doug today I do want it to only snow past the airport and anything inside city limits, no snow.

Oh, I guess. Yeah. I'm good with that. Which he's good with. But you know, that means, I don't know if you can shut off the rain with it.

I know, great answer. We're not getting snow, we're generally getting rain and having the ice everywhere and having to deal with that. But again, I'd be glad to take any questions on any of the above. I mean, we've got both the water and sewer budgets are back in a little ways. Those are both enterprise funds.

They're not in the general fund. But those both cost-driven, we have— If we look at it, we have on the wastewater, as far as full-time equivalents, when you look at our budget, we have 9 for public works. But only general fund is only 4.5 positions there. You've got 4 employees and then a quarter for both myself and my admin. And then we also charge a quarter to water and a quarter to sewer and a quarter to the shop.

So ours are split 4 ways as far as those 2 salaries. But then both water and sewer, there's only 2 guys on each. You only have 2 guys 2 guys doing the whole water system, 2 guys doing the whole sewer. However, obviously they work together and do what they have to do. In general, we have 2 that are doing water stuff every day, another 2 that are doing wastewater stuff every day.

But when there's a project or any type of a dig or something they've got to do, they all get together and make it happen. So the water and sewer, I think you'll see in— right now we have a big rate study going for that. We're hoping to have it by the end of the year for water and sewer rates and how to get there and, and what that needs to be to happen. We haven't had a rate study since 1993. This came up, this came up 2020, 2021, maybe it's 2022.

We were right to council to pass the rate study, and this is the same one we're working on. It got— that was right when, uh, I believe Jeanette just started that month, wasn't comfortable with it, and it never came back. And then COVID hit and everything is just kind of fallen back. But we have done some cost of living type of raises in the rates, but not a rate study to show where we should be. I think the biggest change we'll see is, is on that, is working through the complicated rates that we have now for trying to determine how many units are in a building or where they're at.

It just gets very tough. We're looking at all those bigger buildings— businesses should be metered and working off a water meter. And how does that rate work? And getting that dialed in so it matches up with what most communities would be doing on it. So hopefully we can really simplify the rates and get that rate study done so we can bring those both back in there, both water and wastewater.

They kind of tread there. They both do pretty good, but even in our loans when we had to present the financials, our wastewater, they said you got to finish that rate study or we're not repaying all your grant that we gave you. So we are working to get that done. We can take those two projects when it's tied together and bring that back to you. And like I said, I'd love to have it by the end of the year, but we're kind of— there's some things that have really major data issues that we've needed to work through, and both finance and ourselves are working through that to get our consultant those— that information.

But with the loans associated with it, it is a good deadline. It's like Doug said it. It came up in 2021, '22, kind of fell to the wayside, and we're excited to re-up that and bring that forward with you. But we haven't planned for any of that in this budget. This is a very status quo budget and may address that in the future for both of these enterprise funds.

And so you'll see up on the slide, we have the Wastewater Fund, which the cute cartoon that I chose for that one was a little Lagoon Monster, but there are no actual lagoon monsters, so don't be afraid. And then the water revenue and expenses as well. So you'll see those up there, but definitely something to be in mind— keep, keep in mind is once again that depreciation for 27-28 does have us exceeding our revenue. So we have to be mindful of and plan for that as we look towards that rate study in the future. And that, I believe, is everything that Doug does as Public Works Director.

So yeah, questions? Does Doug get a prize for going last? Best for last. It always seems like when you come to the dais, you're always like, well, there's no expense to the city, we found a grant. So you should have some sort of incentives for your directors?

I will say we've done very well. We've worked in through those with those grants and trying to get there. They're actually loans with forgiveness, but the same, same applies like a grant. But the state revolving fund has been super to work with as far as the DEC state revolving fund with their funds they get from federal level, and then they're able to disburse. But I will say Receiving those is certainly just a real bonus that we get, but oh my gosh, the paperwork.

Yeah, it's not for money. It's to finish and keep that stuff going. And now with all the Buy America, Build America, the American iron and steel and all those things are good things, but it— boy, there's a lot. I mean, they don't just accept that you bought it at Bernard Builders and they say it's American, no, they want to see the manufacturer and they want the manufacturer to write that it went to the Seward water tank specifically and that it was American iron steel. There's really a lot to chase down on these things.

It's good. I mean, we really have got some great benefits and some really expensive projects that we're taking care of and we were able to get forgiveness on most of those loans to do do it, but we're trying to keep up with the paperwork. And thank God for Neneth keeping track of a lot of that too with finance and getting that done. It's really a lot. Yeah, I would add to that, back to the finance and public works conversation, there's this excitement and then an immediate, oh gosh, we have so much work that we're going to have to do every time we do receive one of these loans or these grants.

Because the grant requirements are a lot. And it's a heavy lift. I know Jason's been through a few of them where he's like, this $5,000 isn't even worth it at this point. But a big kudos to both the Public Works team and the finance team and Jason too for making sure that those always get done because at the end of the day, having grants and reimbursable loans is just such a good plus for our community.

It certainly helped to be able to keep the rates where we are right now, but as we're going through the rate study, I mean, these are all projects that would have had to come out of the rate pairs price, you know, when we do those rates. So it's been a good thing for the city. Is that around $5 million is what you have? I think we're up to almost $8 million. $8 Million.

On all the— that we've got. Yeah, with the new one. Yeah, yeah. So it's been a really good thing. A lot of work, good thing though.

So I'll think about the prize. I'll work on it, yeah. Other questions for Doug? The new—. Oh, who was it?

Oh, it was me. You go ahead, I'll ask. Okay. I'm just trying to understand the salaries or the personal expenses reside in 3 different places on yours and the water enterprise Enterprise Fund, the General Fund, and the Wastewater Enterprise Fund. Those were all where all the people are.

Because the salaries are— personnel costs are slated to go up 44% in '26 on the Water Enterprise Fund. Yes. And go up—. Where was that? Next one.

36% In the General Fund and 4% in the— Wastewater. And I know we have, that's all one new person? That can't all be just one person. No, so I think too, one of the things to notice is that, that it's probably a reallocation, James. So I'm gonna look at James and think back to his big spreadsheet.

So one of the things we're adjusting here is making sure that the right person is allocated, or the right position is allocated to the right department. So it hasn't always been the case. So when Doug says that— or James, do you want to speak to this real quick? I can step in really quick. Yeah, yeah, come up to the mic.

Yay! I don't need to talk. So in personnel and public works, it's really allocation of hours. So I looked at the history about what employees are working with— with what will function or in what enterprise fund. And so that gave their hours across the funds that normally work.

So there are some shop employees also work with streets, streets and shop. Those also sometimes work with the water and wastewater funds. So it's allocation of hours of other employees. That's why those differences are in there. They charge their hours depending on what the department are working for.

And so we budgeted for that. I would add, I would point out too though, if you look at this public works overall, the jump is only a, is $200,000, which is about not the entirety of that position, but a good portion of that is a new position. So it's a little bit hard to see across all the funds, but James did a great job of allocating to the fund that the work is actually being done, or to the department that the work is actually being done. Included in COLA increase of 3%, plus every employee gets at least one step up, which is another about 2.5% on top of that each year, plus a bonus at the end of the year. So that's also included with the budget as well.

Yeah, these are—. This is in the 40 and 30%— yeah, so this is big. I don't suppose there's any way to do consolidation of all of these. At least because some are enterprise and some are general? I can do something like that.

Everything under Doug? I can put something together, just Public Works including all enterprise funds. I don't want to put any of you to a ton of extra work. But those—. CMF has it all together.

Exactly, for funds. That has the whole Public Works area. I would say potentially just a— consolidation of all of the funds in the general fund and all the ones in the enterprise fund, because I wouldn't want to muddy those two. But we could— yeah, potentially. Yeah.

Well, the issue with that is that again, there's some overlap between general enterprise funds, other employees that work in both. Yeah. So that's where it gets complicated with public work. Yeah, I get it. Didn't understand it.

Thank you, James. Nope, that's it. Thanks, thanks, Jay. Thank you. Any other questions?

Yeah, let's do that.

Like, okay, I'm not seeing any.

Great, that's everything on my to-do list. That's it. That's it. Okay. Yeah, well, I did have one question I was going to ask while you were up here.

Um, is the new, um, water tank get up the canyon done?

No. I keep going up there and I keep seeing people. And yeah, so what's the deal on that? Well, they're getting the insulation on the outside of it right now. Oh, there was a few hiccups with the insulation.

We're working out some details with them. The tank itself is all structurally done and good. The insulation around the outside, they're up on the roof, I think, Tomorrow will be the last day on the insulation on the roof, and they'll be done. These guys, they're out of state and they're trying to get home for Halloween. That seemed kind of odd for trying to get a job done by Halloween, but I know they were up on top of that roof this morning and it was icy, and they said it was a little sketchy up there.

Yeah, I've seen— I've seen—. That stuff done. So they should be done with the roof. If not, all the way today, finish by tomorrow, and have that part of it all done. There's a few punch list things we'll have to come back for and get here in the next week or two.

But on Monday, we have our cathodic protection, which is corrosion control. They'll get that all installed. Those pieces and parts have now arrived, and so it looks like Monday, Tuesday, get that installed. And then we'll probably refill it. We have filled it up.

We've already tested it and and rechlorinated and done the whole thing. And now it's, it's emptied out so we can have the corrosion protection put in, get that all done. And that just— I mean, it's just a good thing happened all that. We don't want to run without having the parts and pieces. So the only thing we would have left is some insulation things on the outside.

The fence, they're really having trouble getting a contractor down here. They've got one right over here doing the electric, but they're promised out wherever they're at. So there may be a temporary fencing go around, you know, like the panels that they have to bolt together, put around on the spots that were open. But those are the small things, just, you know, a few things to get done, but it won't, won't affect it. We should be able to have it filled up here in the next week or two at the latest and start using it.

Good, thank you. People have been asking me what's going on, and I go up there and look and Yeah. It's not done. Well, it's— I mean, there's just even one thing like the— on the sides, you see all the metal brackets. They were supposed to be the same color as the rest of the tank.

We live with it. I really want to bring them back in the spring and have them take it all off. But, it was a part of the bid. You know, so we're working through those issues. They're just things that— always something that you trying to get through, but all in all, we're working with T. Bailey.

They've been pretty darn good to work with. They do a lot of the things for us too. Thank you, Doug. Okay, anything else? We can end this one.

Oh, we do have one. Yeah, I'm sorry, Council Member Warner. Thank you, Madam Mayor and the clerk. This conversation might have fit better in yesterday's work session, but I thought I maybe might bring it up for discussion with the dais. Um, there was a House bill that passed at the state legislation, uh, last legislation session, House Bill 13, that allows municipalities to have a little bit more control around the way that they, um, do property exemption.

Um, and now that there has been the conversation around the proposed 1 mil rate reduction in this the city's budget cycle. I'm wondering if there's a different way to maybe look at that where we could potentially keep that 1 mil rate, um, inside city limits, but allow for some property exemptions around primary residences and those that are currently operating as short-term rentals, um, but are willing to make the move into a long-term housing and allow them a little bit of that property tax relief. Something that has been sitting on my desk for a little while, and I've just kind of been wondering about the best way that it could support our community. And with the conversation from yesterday with the 1 mil rate reduction, I just wanted to bring it up to everybody's attention that that is an opportunity. Thanks.

Council Member Kolk. Yeah, another note here. For the 1 mil rate, is that something that we've sort of decided on as the benefit to the tax increase? Or sorry, the adjustment in how we collect tax, rather. So the proposal that we've brought forth has the adjustment for the seasonal tax rate to a 6%.

There was— we didn't want to then make all of our expenses meet that limit. It was about $500-ish thousand that we saw in there that we thought, oh, we can utilize this, and it equated to about $1 mil. So yes is the answer to that. It was kind of a, oh, you'll pay— you'll potentially see a higher increase in the summer months, but we'll counteract that with 0% in the winter and a lower property tax. But I do think if, um, exemption, there is some of the opportunities for that as well, if that existed and was the will of the Council.

Yeah, I suppose just my initial thought is, you know, from at least my perspective, we want to make Winter more accessible and more affordable.

And tax reduction rate, Property would really only affect people that own property, not year-round renters, not people on lower income, potentially. So something a little bit more universal that would affect more taxpayers, potentially people that do sales tax, might be up my alley. But I also do know that the lever that you're talking about could be used in correlation with it. To some degree. I don't know.

I don't want to scuttle anything. I honestly think like for me, seasonal sales tax, if I'm going to put on the other hat of owning two businesses, to me makes a lot of sense for being year-round. In one sense, harvesting the summer so that we can afford the winter. I know that it comes with some controversy, but here we are.

You had something, Councilmember? Yeah, um, can you just kind of refresh how this is going to work, uh, like us, um, in terms of we have to reach a consensus before we present, right? Oh yeah. Oh, you mean, um, yeah, legislatively. Yeah, yeah.

So that's a great thing to refresh. So the city administration, finance, me, the whole team has presented to you a budget. This is the administration's proposal for the FY 27-28 budget. So what we'll be doing over the next few days, what we started last night, is discussing what that budget looks like. At the November, uh, 14th, the first meeting in the month of November, we will have on that a finalized proposal with the ordinance.

So over the course of the next few days, there's probably a small few things that will adjust and bring forward. And then that ordinance will be in front of you for public hearing in both of the meetings in December—. Or November. And then the meeting in December on the 14th will be the final vote to approve that. It's November 9th.

Okay, so November 9th and 23rd will be the two public hearings. Um, usually we include a third public hearing, just there's no reason not to allow offer multiple opportunities. In conjunction with that, we'll also have any ordinances that impact the tax revenue or the tax collection. So as we move forward, we'll bring an ordinance that changes to a seasonal sales tax that you'll also have to vote on and pass and drops the mill rate, which you'll also have to vote on and pass. So there's kind of three levers that are being pulled.

And they don't— they all have to happen to meet this proposal. That being said, a good example of changes in that is 2 years ago when we presented the budget, there was a proposed bed tax increase. We made amendments to the budget, did not pass the bed tax, and that still moved on forward. So we could— you could do— all 3 of those levers have to pull for this budget to pass. That wasn't as clear as I would have liked it to be.

It to be. But there will be 2 ordinances and a budget, or 3 ordinances: the budget, the sales tax, and the property tax. So I think what, I think what you're saying is if, for instance, we come down to the final and let's say we decide on, uh, we, we have some sort of compromise situation you, meaning the admin, has to figure out how to balance budget. Yes, correct. Well, we, we need to have the time for it before the end of the year, right?

Now is the time. Yeah, so it would be a good conversation to have as we move forward if this is something to discuss. We would, we would appreciate that. Time meaning tonight or in the next 3 days, 2 days? Well, you— so here's the ultimate thing is that you can't as a body vote and direct.

Yeah, so, um, I think it's a good time to have the discussions. It's a good time to hear the input. It's a good time to talk through what we have in front of us, and we can make adjustments based off of that to present at the November 9th meeting. Go ahead. Okay, well then I'll just say this.

I had a good conversation with the with a business person today, and they were not happy about the 3%— or sorry, the 6% winter rate—. Summer rate. Summer, sorry. Zero in the winter.

And I think their argument was, and it does make some sense, that when we budget, we're almost always, or if not always over budget. Last year we were over budget by $12,000, so that is not the case. Previously it was the case, but if you remember, in FY 20—. In this—. In '24, when we approved the '25-'26 budget, we took out all of that because it was a direction from council at that time to say we don't want to increase the bed tax, we want to accurately forecast.

And so last last year, we came down to the—. We—. I was very proud of how close it was. It was $12,000. So that's not true.

It can't— with the current revenue projections that we have, we budget to as close to what we expect to receive. There's always variability in there. So here's another question. Sorry. Another argument that I've heard in the community is we have $60 million plus $50 million in assets or in capital right now, of which I think $11 million is dedicated to Providence to pay off that note.

So how can you— how do you— how does the admin respond to the fact that we made $50 million sitting in assets that could help pay for some of these increase in costs coming forward? The large assets that we have are all allocated to the different funds and things that we run as a city. So like you said, we have $10 million in the enterprise fund for the hospital that's to be used to pay off the bond. We can't use that money in itself for anything else. So that's 11 out of 60.

So that's 11 out of 60. You'll also see, here, I'll go to this slide. We only have the funds that we can use used without any— with reckless abandon to fund our general government is our general fund balance. This is our unassigned reserves. Everything else that we have in our asset list is assigned.

So the $10 million is assigned to Providence. There's, I think— here, let me see this. Sully pulled out the book. So we have a variety of things that are assigned to the different places. So right now we have a high asset, a high capital in the harbor fund because the bond payment came in through, and then we're going to pay that out.

But we can't use that to fund city services. So there's only about— there's $12.9 million at the end of the year in our unassigned reserves, and then we're budgeting for there to be $11.5 million. That puts us right in the policy band because we need to have the reserves per code of 3 to 6 months. I'm sorry, my head's foggy. I don't understand.

We have $50 million. Why? It's all assigned. We only have—. Give me an example of the size.

$10 Million to the hospital fund, $5 million to the hospital reserve, um, money for the, um, electric utility, which is not currently, but we've had that higher in the past. CPV funds are in that balance. We can't use some for general fund services. We also have harbor and SMIC and wastewater funds. Those can't go in, but they have reserves built up so that if anything did happen, they could replace it.

The motor pool itself, parking and campground enterprise, those are funds that we're finding ways to utilize, but we can't put those into the general fund balance. So when you collect money in for individual funds, funds, they have to be utilized for those funds. Or if we bring in money from the— that's supposed to go to the— so the biggest thing that we do have too— I'm sorry, my brain just jumped— the biggest chunk of our money is that Providence money. And the way that it's making money for the general fund is through our investments. And so you'll see that we've also budgeted for just about $700,000 in investment returns, which is a pretty broad—.

It—. We've increased that revenue, um, prediction as well to be allocated more specifically. But we could have done it more, but we also anticipate utilizing an internal fund to pay for the electric utility because the council decided to not go for a bond and wants to do an internal fund. So all that money that's not assigned is working in different ways to run the city. It's not It's not a pile of money to utilize.

Yeah, that's a great clarification. And then, so what happens if, if we were to say— because I agree with Matt that the mill rate benefits larger businesses, and really what we're trying to get at is affordability for the people in Winter— so why decrease the mill Mill rate, why not keep the mill rate the same and instead of go 6, go 5 or 5.5? I guess each percent is about $1 million. $1.8 Million. Each percent.

Each percent in the summer is $1.8 million. Sorry, one more time. Each percent is $1.8 million. So if you look here, let's go to— where am I?

What do I want to look at? So 10.9 is the production in 10— divided by 6. Yeah, $1.8 million. So every percentage point that we bring in with a seasonal sales tax in the summer is $1.8 million. So to drop that down a half percentage point is $900,000.

And the mill rate is $500,000. The mill rate change is $500,000. You also have to remember too 1 percentage point covers the drop that we would receive seasonally in the winter. So we don't— we're not going to receive any tax revenue in Q1 and Q4. So that first percentage point covers that, that shift.

The second percentage point helps bridge the gap in revenue.

But just, just— we're just having a discussion. Instead of 6, what if we went 5 and then in the winter went 1? That wouldn't be enough to cover. And the winter would have to be 4% still because we collect $1.8 million. So in the winter months, we bring in, currently we bring in 19, 1, 2, 3, 1, 2, 3.

So in the winter, for each percentage point that we bring in, it's 200— it's just under $200,000 of revenue. So 1% would bring in $200,000 plus the $500,000 that we didn't drop. So that's $700,000. So that's a half a percentage point. That's $200,000 shy of a half of a percentage point in the summer.

So I will say we have thought through a lot of these different scenarios, and tomorrow I can bring in a breakdown of that, but there's— this is the way that it works the most to do that zero and to make it more affordable in the winter. A lot of the previous proposals that we've seen and some of the things that I looked back in history don't change the winter rate at all, and they just increase in the summer. And I think that would be disingenuous to our community to not recognize that, hey, we want to make it more affordable here in the winter months, not necessarily just increase the revenue in the summer months. And so as you drop in the winter, we need to use that 1% to bring from 4 to 5 to cover the lost revenue in the winter. That additional percentage point is the one that is utilized to bridge the revenue gap for the things that we've signed up for as a city to operate and fund in the next few years.

The pool, the community center, those are the big ones. Your slide on 15 helps it too, your risk falls to 0. Oh yeah, yeah, so it's only 20% is collected in the—. Um, if I may, um, Seward's kind of in a unique situation on the Kenai. As far as the impact of the summer season, as far as sales tax data across the Kenai Peninsula, we experience a bump that is, I believe, 3 times greater than Soldotna, double that of Homer, as far as percentage increase.

So our winter rates is— I mean, summer is about 8x higher than winter. So the impact on city services and things like that is unique to us on the Kenai.

I think it's an interesting concept to be able to pull the lever of how we collect taxes and when we collect taxes as far as who do we want to pay for the services that impact us the most. I think it's going to be an interesting conversation, but I think if we look at other communities that have tried to pass certain measures and where it's failed, I think their situation has been less as far as where we stand. I don't know the statistics. Yeah. Can you explain what you just said there?

Yeah. So being on the Kenai Peninsula, since we collect taxes across the whole Kenai, we're able to measure the impact impact of Q1 versus Q2 versus Q3 versus Q4. And Seward experiences a jump that is roughly 8 times higher than anywhere else on the Kenai Peninsula by a magnitude of— I think our jump is around 8 to 10 times, whereas Soldotna and Homer is roughly like 4 or 2. Whereas Seldovia has a very similar seasonal jump, and therefore they have a seasonal sales tax. Right.

So, but you're saying that you said that some of them failed or— where would you fail on that? Even if you didn't have the 8x, say you had 4x. I would say that the sentiment of— I think what I mean by that is other places have tried to pass a seasonal sales tax. Oh, I got you. Some have.

Some haven't. And I think that if you look at where it hasn't been able to pass, mass or hasn't been widely accepted is that that jump is less as far as the impact that those communities see from the seasonal travelers.

Okay.

Councilmember Warner. Thank you. I think to just kind of piggyback a little bit off of what Councilmember Cope said was that there was a tourism industry working group that was put together by the Kenai Peninsula Borough maybe 2 years ago, where they looked at different types of revenue for the borough. And out of that report, they looked at bed tax, they looked at a seasonal sales tax. And one of the top recommendations out of that report was a seasonal sales tax.

Even though their structure was a little bit different because it's the borough versus, versus the city of Seward, there is some really interesting data points in there, as well as industry support for something of this nature. So in my mind, I think it makes sense for the seasonal sales tax. I think kind of where I'm getting hung up is with that 1 mil rate reduction, and I personally myself would like to see us keep the 1 mil rate and then look at how House Bill 13 could help support our year-round residents through that reduction if it's a primary home and/or supporting owners of short-term rentals that may want to become long-term rental units. What that looks like, I'm not 100% sure at this point in time, but I do think it's a pathway that I would like to, to look at. Um, and then another thing that I want to point out too is in the slide deck presented to us by administration and the survey, the community budget survey, it does state that overall about 84% of the respondents were in support of city service increase or maintaining what the city currently offers.

So I don't know, I just kind of want to bring that piece up again as well because it does seem to be supported by the broader community. Increasing city services or maintaining.

Sorry, I just want to respond. No offense to the survey, but I find that this— it's a great survey, but I think in using that data for that particular argument is that you can have 50 people say, hey, I want more city services services, but the— there would be one business owner that takes the heat on that. So it doesn't—. The—. It doesn't really reflect the— um, does that make sense?

Yeah, so yeah, I hear what you're saying.

Does that make sense to you? I— if you— if you queried 100 people and 98 of them said, yeah, just give me more services, but they're— they don't have to pay out that on that. I would say that one or two businesses that said, oh no, we don't, because that's going to cost us, kill our business. I would argue that a seasonal sales tax is paid by the visitors, not the businesses, and that all of the community members have an equal voice in this community. This is my pushback to that, especially the ones that replied to my survey, which is great.

Lori Draper. So I wanted to revisit the taxes that Casey was talking about with the Homer reductions that I think we did— it does deserve some looking at because if I'm not mistaken, what it also allowed us to do is to allow these tax reductions without having to go to a vote of the people because it used to be that the state only allowed you to do $75,000 homeowner exemption. That's what the borough has and Seward has none. And I thought, wow, what, you know, that would be the way to reward people who live here year-round is use a bigger, a bigger one of those. Well, it sounds like that's possible now instead of a 1% reduction across the board, or $1 mil reduction across the board, to look at maybe targeting a first-time homeowner or a primary resident.

Basically incentive programs. Yeah, rewarding what we want to see more of, or what, you know, we want to improve affordability. Is there a way we can spend the same amount of dollars in a different way with this new— these new opportunities? So I think it deserves looking at. And I think that's a great point, but one thing I want to just restate something you said as making it in exchange of the 1 mil drop, because our— the remainder of the property tax revenue that we bring in is directly tied to our debt service.

So to drop that any lower than what we have is not allowed. So it would have to be in exchange for that. So our current property tax at this proposed rate in 2028 is just directly to the debt service that we have as a community, which is on page 70 and 71. Page 70 and 71 of your packet as well. So I have to think about it.

There is a public, yes, I was going to get to that, but yeah, would you like to say something? Come on up so we can hear you. Yeah, I would love to talk personally. Speaking of Millwright.

Hi, I'm Katie, if you don't know me, kwon waw. From the Seward Prevention Coalition. Um, I wanted to speak at this moment. I'm not sure how this process works. We're learning.

Um, a little bit of backstory. A couple months ago, our community brought some people together to convene to talk about some long-term local funding opportunities on how we'd want to look at that to support child care and some other infrastructure pieces around primary prevention and just basically supporting children and young families in our community. And we came up with this great plan that we were going to come to the city and ask for a 1% seasonal sales tax increase, take it to the voters. We had a 12-month plan, and then the next month we found out that you guys were revamping the taxes, which is great. And I think this is a really awesome opportunity, but it kind of made us have to go, oh, we can't do this on top of what is being done currently by the city to restructure.

And so in having to kind of switch gears, my ask that I came for tonight is about that $1 mil. It seems not necessary to take a step on that right now in this budget decision for the 2027, because it's not going to go into effect until 2028 anyway. So if we could table the $1 mil so that we could have a collective community conversation about could we use this funding rather than getting rid of it, because once we get rid of it, it's really hard to bring back to support something else, to support infrastructure. We have the Coast Guard coming. We're gonna need to bolster some of our resources in our community to support families for that population.

And so could we then have the opportunity to have a whole community conversation around how we spend that money instead of just eliminating it? We can always come back to the conversation of eliminating it in 2028 if that's how the community decides that they want to go. But it doesn't— it's not a necessary part of balancing the budget to eliminate the 1 mil, right? It's just trying to create an actual balance, but it's an excess. It's not necessary in like ensuring that you reach your absolute goal of spending.

I understand that in the budget item it's going to look like an excess of $500,000, and I'm not saying that that should be—. So by the governmental accounting standards, we can't present a budget that doesn't equal zero at the end. So there would have to be a— just to clarify. Yeah. So could we do something like what has been done with Providence, where you do kind of like an allocated children's fund, um, which is what our proposal was going to be, um, to, to allocate some funding to a children's fund, but then SPC, who has done a really comprehensive 10-year strategic plan in collaboration with organizations across the community to target these top priority areas in our community for children and families and use that funding to support that.

It's really hard to do that in this process because we have to bring a resolution to you guys, we have to go on our— we have to open it up for public comment with all those levers that you're pulling. It just feels like if we eliminate that that $1 mil right now in this conversation to balance that budget, that then it's just no longer an opportunity for us moving forward, because it's really, really hard to bring that stuff back. And I sent you guys, although you probably didn't get it in time and read it, but I did send together a proposal. We have a couple other suggested options for funding something like that out of the current budget that would balance a little bit, whether it's just becoming a line item option, um, or, um, looking at Providence funds, the funding that we give to Providence. There's— there was— I might be wrong, I've been taking in so much information on your guys's budget, um, but it sounded like there was going to be an increase to Providence, um, from what it currently is.

Um, and so is that something that we could talk about as a community of like What about primary prevention? The coalition is very excited. We just got back our most current youth data. We've been collecting youth data every other year for the past 3 years in our community. And I can't speak to it because we haven't released it, but one data point that I can speak to has been our success in lowering underage drinking.

In 2019, our youth drinking rate was 33%. State average was 22%. The state average right now is 20%. In 2024, our youth drinking rate dropped to 13%, and in our most current data, that's down to 7%. And that has been a huge goal for us in implementation of the Icelandic Prevention Model, and to see that level of success is incredibly exciting.

Um, and that just shows, you know, what does drinking alcohol have to do with, uh, child healthcare or any of our other infrastructure, but it's the environment that we're creating around our children as a community that's creating those positive changes in their risk behavior. And so instead they're turning to positive, um, alternate, um, protective factors in their lives, and that's us as a community creating that for them and creating a culture that is safe around them. And so being able to continue that work and having local funding help support the work that we are doing and not being dependent on federal funds or state funds that have been just taken away sometimes overnight from us, um, helps protect the work that we're actually doing in the community, um, for longevity. So that's my ask, is to consider that mill rate. And it sounds like you guys are already thinking about that, um, in a different way, but just to be able to have that conversation in this budget cycle would be nice.

And so, good. Thank you.

Bob, I love your question. I'm asking—. I'm like that, I can ask Kat a question. Oh, yeah. The Providence, speaking of Providence, when are we going to have that discussion?

That's on Thursday. Okay. Under capital infrastructure and hospitals. Just to put it out there that I would love to see not only Providence but the clinic and Seward Prevention Coalition and say, see you in a broad discussion, and I don't think we're going to have time on Thursday, but I just, I'm worried about making a decision about Providence Providence and where we're going with Providence without understanding the bigger picture of healthcare in the state. So I would counter that by saying that Providence and the funds under which we have— are allocating resources are city-owned assets and funds that we are responsible for.

And so in the broader discussion of healthcare in the community, that's more of a policy-driven thing. These are funds that we need to to take care of that are owned and— owned by the city. And so, as you look out to other organizations and want to have those conversations, that's a great thing to have as you craft policies down the line. But as we look at our budget and what we're doing for these funds, that's following through with the responsibilities and the obligations that we have as the owner of that. Funds.

Yeah, and so as we look at the— as we look at the Providence and Mountain Haven, the expenditures that we are including in that is directly correlated to the conversations that we've had and had as a work session previously on just capital within that organization. And it's not necessarily anything broad, broad shifts. It's just, I think, a few of them of maintaining the assets that we own and increasing some of the resources resources that they have so that they can expand and take advantage of the grants that they've already received. And so I think if you look at the— look at—. Okay, so just in moving numbers around on a budget to discuss the mill rate or Providence or whatever, so like say for 2027, if you wanted to table the mill rate to balance the budget, you could withdraw some of that funding from the parks and CAMP that you're feeding into the general fund to balance?

The 2028 would be the year that we would have to do that, not in '27. We're not recommending, so, uh, but it could, it could. So yeah, but so could you make the— could you approve the 2027 budget without the mill rate decrease? The 2027 budget does not include the mill rate decrease. It's only included in the 2028 budget.

But yes, you could do that. But in approving this cycle, right? You're approving 2 years of budget. Yes. Right.

So you would have— like, could you undo that decision then in 2028 if you get there and decide to—. Yeah, we do a mid-cycle budget adjustment and could do that. Yeah. Okay. I see.

I just didn't want to be like nailed down and it had already been decided before and not be able to hear This is very complicated. I do not envy anyone. No, it's not complicated.

I mean, I like the—. You guys' input because that's what we do here, no? We are producing— putting producing public funds to the service of the community, no? So yeah, no. Please note that.

But to echo some of the conversation that Sully said before, having these conversations now is much more beneficial so that we don't have to adjust and come up with very complex amendments that move funds around. So we appreciate the input. Can I ask one question before we wrap up? Is there any deliverables from our conversations tonight that you would like us to bring tomorrow as we look at some of the conversations specifically, I think, with Public Works too.

I would say that a list of our funds and where they're allocated to. We've got $60 million. Yeah, the central—. Is that probably—. Is it in our staff?

Yes, so that's on page 61. Sorry, I forgot that was in there. Oh, okay. Oh yeah, yeah, we have Oh, there we go. So if you look at page 61, you'll see all of the operating funds that we currently have and the specific things that they are allocated towards.

And so—. Okay, so there you go, Bob, it's $12 million is what we're looking at. Yeah, so there's— yeah.

Those are funds restricted. So anything below general fund is a restricted fund and has to be utilized for that specific use. We can do internal loans between those funds, which we have done in the past, but then you have to pay that back. So it's not, it's not money that can be moved around. Does that answer your question?

Oh yeah, it's okay. Great, it's all right. I love that. I know, I'm so proud of the entire finance team. And me.

We can't even punch holes in anything. It's so fun. It's pretty good. Okay, anything else before we—. Just one thing, just on the mill rate and where we're at, I think some great ideas on how to do it back and forth, but just kind of a simple thing that helps the year-round folks is just match the borough's example.

Exemptions. We don't— Seward doesn't do that, the $75,000 or whatever that is. We, we don't. We keep that. Is that a way to—.

Does that one still require a vote? I don't think so. I'll have to look into it. But it, you know, it, it then it just falls right in line with the same thing that Burroughs is already doing. I mean, these are all good things too.

We might not want to match it because there's $300,000 for seniors. So whatever, whatever they are, I'm just saying, where does that come in with the 100 rate, does it? The assessed value, I know, the same, but it certainly then does do something, whether it's the seniors that have that. There's a lot that do need that, you know, that may be there. So I'm just saying it makes a simple one because it's— you're just matching what they do basically, or following those guidelines.

But it certainly helps year-round folks to do it that way too. But yeah, there's lots of—. Yeah, and I'll have to do some more research on that because As Councilmember Draper said previously, before Councilmember Warner shared the recent House bill, it was required of a vote. So that might be capable via ordinance now. So I'll look into that and get back and talk to the attorney.

So I'll bring that. Also, sorry. One of the staff that is actually the chamber brought up around the mo— or property tax inside the remotes is that 9— uh, sorry, 26% of our, um, inside city residents is either second home or Airbnb or like short-term rental. So 26% of what we collect is from local year-rounds. Okay, if that's a number anybody cares about.

Anything else? Okay, we're ready. Oh, well, I asked.

Go ahead. Gosh. No, I just, I think being— am I the only business owner on the board? Council? No.

Are you only what? The only business owner on council? No. Casey No, you don't own them. No, but maybe.

But I mean, I'm adjacent. Yeah, business adjacent, previous business owners. Yeah, no, I've just heard some arguments for and against, and I just don't know if I did a good job of representing all those points of view tonight. I'm sure I'll bring back some things tomorrow to kind of help the conversation a little bit from those points of view.

Anything else? Okay, I'm going to adjourn this work session. Great. We'll see you tomorrow.