March 5, 2025 CBJ Assembly Finance Committee Meeting - starts at the 59:47 timestamp

I call a special assembly committee of the whole to order, which is a joint meeting with the Eagle Crest Board for Wednesday, March 5th at 5:30 PM. Um, Miss Atkinson, would you lead us in the land acknowledgement, please? Thank you, Mr. Chair. We would like to acknowledge the city and borough of Juneau is on Tlingit land and wish to honor the indigenous people of this this land.

For more than 10,000 years, Alaska Native people have been and continue to be integral to the well-being of our community. We are grateful to be in this place, a part of this community, and to honor the culture, traditions, and resilience of the Tlingit people. Gunashish. Thank you, Miss Atkinson. Madam Clerk, would you call the roll, please?

Thank you, Mr. Chair.

Madam Mayor. Do you want to do a sound check while you're responding? Sure, I am present. Okay, and we can hear you. Thank you.

Mr. Steininger? Here. Ms. Hall?

Here. Mr. Kelly? Here. Ms. Wall? Present.

Miss Atkisson? Here. Miss Hughes-Scandies? Here. Mr. Bryson?

Present. And Deputy Mayor Smith? Here. Quorum of the assembly is present. And for the Eagle Crest Board, Chair Michael Satre?

I'm here. Kevin Crine. Here.

Norton Gregory.

I don't see— yeah, I was going to say I don't see him in our Zoom world. Uh, Madam Clerk, he did let me know that he was going to be absent tonight. Thank you, Madam Mayor. Brandon Cullum. Here.

Jonathan Nail. Here.

Hannah Shively. Present. TJ Thomas Mason. Here.

You may want to raise your volume a little bit if you can, Mr. Mason. All right, I'll try that. Thank you. The quorum of the Eagle Crest board is also present, Madam, uh, Mr. Deputy Mayor. Thank you, Madam Clerk.

Moving on to approval of the agenda, the one thing I would suggest is just adding very brief introductions before we get started. So seeing no objection to that, Mr. Satri, would you like to start off? Maybe just how long you've been on the, you know, Assembly, or you go across board, anything else. Keep it brief. Thank you.

Thank you, Mr. Chair. I appreciate the opportunity to be here this evening and chat with the Assembly. My name is Mike Satri. I am the current president of the Eagle Crest Board in the first year of my third term.

Thank you, Mr. Chair. Ella Atkinson, I've been on the assembly for a little over a year.

Thank you, Mr. Chair. Maureen Hall, assembly, and I've been here for just a few months now.

White Bryson, I'm in my seventh year on the assembly.

Brandon Kellum, I'm the newest member of the Eagle Crest board. I think I'm 6 months in now.

Hi, Christine Wall. I am on the assembly and I am in my 6th— 5th year, 5th year.

I'm Kevin Crine. I've been on the Eagle Crest board. This is the middle of my second term, so 4 years or so. Felicia Hughes-Gandis, Assembly, 7 years.

My name is Hannah Shively and this is my 3rd winter on the Eagle Crest Board. Paul Kelly, I've been on the Assembly a little over a year. Neil Steinger, I've been on the Assembly since October.

John Dale, Eagle Crest Board, this is my 7th year. Greg Smith, Deputy Mayor on the Assembly, uh, going into my 6th year. I've been the Eagle Crest liaison and I'm an Eagle Crest user. Then we can go to online.

Uh, TJ Mason, Eagle Crest board, um, for a year and a half now.

Beth Weldon, Assembly, for way too long now. Very good, thank you. So we see the agenda in front of us. It's a joint conversation. We have a couple of memos that we've all read.

My goal, or the hope tonight, is to— we see the information in the memo. Mr. Satrio also has a PowerPoint or a slideshow to show us, and then just a chance for us to have a discussion, ask questions. Obviously, financial questions ahead of the assembly, we don't need to solve them tonight. That will happen during the budget process, but it's just a chance for us as the assembly to speak with the UCRS Board, better understand their asks. But again, we'll be making decisions in the budget process that'll be starting up in April.

So Mr. Saetre, if you have any words and—. Yeah, thank you, Mr. Chair. Like I said before, really appreciate the opportunity for the Eagle Crest board to come here and chat with the assembly. It's always been a great productive conversation.

You know, when I presented to the assembly earlier this year, there were some specific asks that the assembly had to bring back to this board meeting, and hopefully we've satisfied some of them. You know, the real, you know, message to me was, you know, for many, many years, uh, the board under, you know, with different people on it, different management, we've always come to the assembly and said we have to pay our people more, we need more staff, and we have capital needs. And we know that moving to year-round summer operations, utilizing, you know, the city's investment in the gondola, is going to help us in the future be self-sufficient, but we still have challenges to address in our current, you know, operating environment and ultimately that transition to full year operations. So I, you know, want to talk about our, you know, the sideboards to the ask on pay and staffing and capital. And I think we can have that conversation about what your sideboards are there.

But it's hard to have that true, you know, chicken and egg conversation or push a piece of paper across and say, here's our number, no, here's our number. But we want to, you know, continue that conversation here tonight. So in your packet you had a memo, and I just, you know, want to reiterate, you know, some of the introduction there that there's no question that Eagle Crest is an incredibly important and cherished community asset. We have an incredible, incredible ski area for a small community like this. We have a very passionate user base.

Many of you are here tonight, former board members, former management. And, you know, we have a very dedicated crew of people operating the ski area here. And our general manager Craig is here tonight on the staff line up there. Aaron, with our snow sports director, is here as well. So it's an amazing asset, but we know that we have to do a lot of work to keep it going for the next 50 years.

So if we could bring up the slide deck, I'll walk through a few things. And I don't want this to be a death by PowerPoint session. I just wanted to put together a few slides to facilitate the conversation, but start off with a quick operational update. This has been a very, very tough, tough year. So we wanna just make sure that we're talking about what we're doing operationally, but then get into our, our personnel and, and capital needs.

So if you move to the next slide, and there's just a quick outline. And the next slide, before we get in, uh, to what, you know, what's going on up there on day-by-day basis, you know, there's a lot that goes on at the ski area, um, in addition to just, you know, having the lifts turn and people enjoying the snow. And That sort of effort goes year-round. When I chatted with the management team this weekend, just, they gave me a bunch of things that they were proud to have accomplished, and the list is actually far longer than that, but I wanted to slap a couple things up on the slide just so you had that in your information of all the things we've been working on. And yes, a lot of these things are things that have to get done.

That's our job, but it's never not busy up there. But as we start to look ahead towards summer operations, I mean, it is interesting that, you know, we were, you know, close to 5,000 visitors between Alaska Coach Tours and the Segway Tours. We don't have a headcount on the zip line because that's a percentage of revenue, but we had $50,000 revenue from, from the zip line. So we have significant amount of summer visitors there already, but we also were able to provide opportunities for Juneau kids. Running summer camps up there, I think 60 kids over 4 weeks.

So that's a program that we want to see continue.

We want to continue to expand, give Juneau kids something to do in the summer up at Eagle Crest. But a lot went on. So next slide. So in a season like this, we've had some great successes and we've had some great challenges. Let's talk about some of our successes first.

We had robust season pass sales coming into the year. And I'll talk later about how that's always a very lagging indicator. But that gives us the bulk of our revenue for this season and helps smooth out the fact that the weather has not been conducive. Now we will take a hit on that next year, no question. And we see that historically in our numbers.

We sold out our snow sports programming almost immediately when it opened up. I think people sit out there at 12:01 in the morning, Erin, and just like a lot of our summer camps and swimming opportunities and other city opportunities, we don't have enough for families to do. And folks are looking for that. And Eagle Crest is quite popular. If we had more positions within the Snow Sports School, we could provide more programming.

But there's great interest. We have that future user base coming up.

We actually have 39 days of snowmaking operations. We really wish we could have done more. And that's, you know, you'll see snowmaking is both on our successes and our challenges. But that snowmaking allowed us to have the winter, the skiing opportunities that we're still just eking out at the moment. Without that snowmaking, without the investments that the assembly has made in that over the years, we would not have had a season.

But we were able to get the— our Porcupine lift, our beginner lift, open on the budgeted opening day. Unfortunately, we weren't able to get the rest of the mountain open until late January, and we're just hanging on by a thread today. But, you know, we have been able to have winter product, and at times it's been quite good up there. But I'm also the person that will say I've never had a bad day skiing at Eagle Crest. Next slide.

All right, challenges, um, and this has been subject to much discussion, but we started out the year with mechanical issues on our Black Bear chair, and decision was made to defer fixing that into— until this, you know, this coming year. You know, Black Bear is an important piece of our operation, but losing that chair doesn't necessarily mean that we lose skiing opportunities. It's a chair that we've struggled to staff full-time in the past, but we had issues, made a decision to hold on to next year, and that is a priority for us, you know, going forward. We've also had an extremely low natural snowpack. I think we all see our yards are brown and green, and it's nice.

Looks like that pretty close to the base of Eagle Crest as well. So, you know, we've had to supplement with snowmaking. Like I said, it's a success, but also, you know, a bit of, bit of a failure, if you will. We wish we had the staff and resources to staff that even more. There was definitely cold snaps where we potentially could have made snow and we didn't.

We also, through the newer team and maybe not fully familiar with the operations, we're not as efficient as we could have been and ultimately ended up drawing water levels down low and having issues. So we do have some things to get better out there. There's no question. But that is, like I said, it's a success and a challenge. We've had mechanical issues with our snowcat fleet.

That's something we have to look at in our capital replacement going forward. But when we have low snow and maintenance issues with snow cats and lack of mechanics to work on them, it becomes really tough to safely operate the mountain. One of the things that we also dealt with this year is issues with our water treatment plant that provides fresh water supply at Eagle Crest. You know, we're not, of course, on the city water system. We had pump and intake issues, had to do a little workaround.

That's also the source for fire suppression in our facilities. So we've had to work with both, you know, DEC and fire marshal to make sure that we are doing the right things to get everything back in compliance. And we're now up and running now. But, you know, we're staffing a small little city up there when we're trying to be in full-time operation. So once again, it's not just turning the lifts and making it happen.

And then really, and this is a perennial issue. This isn't just a, uh, you know, FY25 issue, but we, we are short on people. We can't fill all of our positions. Our pay scale does not attract folks. We have limited workforce here in town.

And, you know, you get to the point where if one person's sick, you might lose the ability to operate, depending on if that person is in a critical, you know, safety, safety position. So that is, you know, staffing continues to be our greatest challenge we have to address. I just want to put a couple quick things in here just to show what's happened over time in terms of our revenues and expenses, just so you have that in your inbox. You'll see on these annual charts, you know, the big revenues that come in is our season pass sales. And you can see when we used to do it, you know, later on in the fall, and then we actually moved it to right at the beginning of the fiscal year to get that income in early.

When you look at FY19, FY20, you can see those lower initial season pass sales because things had been a little scratchier on snowpack the year before. And we'll expect a downturn in our initial sales next year, no question. You hope that you make it up with day ticket and multi-day passes with a good snowpack. But if you have a marginal snowpack, then you're going to take a hit across the board. So you can see where day ticket and selling french fries and materials out of the shop all make up the revenue that's, you know, uh, over towards the, you know, the ski season side of things.

Next slide. Oh, actually, back up one. Apologies. Um, you notice that FY 2025 goes to zero there, uh, in February. That's just because the revenues haven't been fully loaded into the city system from the point-of-sale system, um, at, uh, at EOCRES.

And that's something that Angie's working with us on to make that a little bit simpler and, and updated on a more regular basis. But next slide. So there's, um, just a look at non-personnel expenses. And the reason it says excluding period 1 annual expenses— there's a bunch of stuff that hits the books in the start of the fiscal year. And so just trying to take that out to show, you know, really where we're at, you know, what happens on, on consumables and materials, you know, over the course, over the course of a year.

But really, that's a lot more manageable and easier to project than sometimes personnel expenses, because personnel expenses are a big driver. So go to the next slide.

So you can tell we're a seasonal operation. You have your, you know, truly full-time folks that are on board at the beginning of the fiscal year. You bring people in in November and December. December and then do your best to manage their time as you go through the rest of the year. The FY25 being, you know, slightly higher is some of that's a function of the 6% increase in wages that the assembly was willing to fund last year.

But the trends in terms of how we're using those people are very, very similar. And once again, there's still some things in that February bin that haven't quite fully been loaded, but I, you know, expect that to look a lot like the trends for the other years, but also just a little bit lower as we start to lose our J-1 workers and as folks start to go out for the summer season. Keep going.

All right, this doesn't work as well in large format, but you do have it in, in your paper. But taking a look at the normal format that we see for, you know, our budget and the consolidated, you know, city financials There's FY23 and '24 actuals, our '25 budget. We've taken a quick stab at projecting, you know, lower revenues for the rest of FY25 to see where we're going to be, but also slightly lower costs either due to, you know, due to unfilled positions or things that we're not able to take on. And then just a quick look, and I want to be, be, you know, clear here, a quick look at the FY26 that doesn't necessarily include the next things we're going to talk about. But in last year's budget book, you know, you had that look to FY26 and that's that next to last column on the right.

So that's right from the budget book. But we, you know, just took, I took a quick stab at saying, okay, if we're in a low revenue situation because of poor snowpack this year, poor season pass sales, we don't make it up on day tickets. That you're going to see a significant hit from that revenue if we're not able to make that up later on in the season. So that's, I think we're all aware that that's what we're facing, but we can, we already knew we were going into negative fund balance, but that negative fund balance could be dragged even further if we aren't able to get people to buy our product. All right, next slide.

Staffing. So we've always said we don't have enough staff. For many, many years, the full-time equivalents in the budgets for ELCRES have hovered right between 30 and 33.9 and really haven't moved a whole lot off of that, at least when I've been here.

Been on the board, been very, very consistent.

It's— there are some positions that have been added over the years. You know, the Duncan Report brought out the fact that there's, you know, more full-time positions in some areas, but in the end, it's been pretty flat. The staff, the Eagle Crest staff has taken a look at what if we funded— not funded, but what if we filled positions or had positions at Eagle Crest to staff it in, you know, a much more industry standard manner. That if we were to get, in a perfect world, all the people that we think it would take to operate the area, what would that look like? And it's a bit of a big scary number.

It's up to 56 full-time equivalents. Now, the board hasn't had the chance to sit down with staff and really go through these numbers and say, you know, this is exactly what we want to do. But when you look at the big increases, you know, snow sports is one that sticks out. But if you can increase your snow sports personnel, you can generate more revenue for the area. And so we have to look really hard at, is that increase truly going to generate more revenue?

The other thing that you'll see there is a significant increase in in mountain ops, which also includes our maintenance crew.

Most private industries in Juneau have a very, very hard time finding maintenance personnel. The city has a hard time finding maintenance personnel. Eagle Crest, it's almost impossible because of our pay rate. But if we were able to attract people, we need many more of them. So that's what the first pass looks like.

It's set from staff. We're going to be working through the details of that at our board meeting tomorrow to finalize what that ask will be for people. But if there was a magic wand that could be waved and all those people came on board tomorrow, you're doubling your personnel costs. And then you have, then we have to make sure that we're maximizing revenue on top of that. So that's a big jump.

Next slide.

Oh yeah, Mayor Weldon.

Thank you, Mr. Chair. Um, thank you, Mr. Saytree. Um, you did say that if you have more snow sports instructors, you'd make more revenue. Do you have any idea approximately how much each instructor makes, or, or what's your, what's your revenue forecast for that additional personnel is?

You might not have it now, but it'd be interesting to see. I, I don't have that now. I know Erin's looking at me from the back of the room. I know she has an idea, but that's something that we'll discuss at the board meeting and get back to you on that, because that, that is the balance— is if you're bringing in new positions, how much revenue are they going to generate?

All right, so do we, oh, should we take questions as we? I'm happy to. Sure. Yep, Ms. Euskandiz. Thanks, Mr.

Chair. Just since we've stopped, I see the ski patrol is a very modest increase and I'm just curious, would adjusting, obviously not for like an executive or base ops, but if you increased your ski patrol snow, uh, snow sports, none of that would necessitate increased ski patrol. So thank you for the question. Through the chair, ski patrol is one of our highlights, our successes right now. We, you know, worked with the assembly a few years back to increase their pay rate first.

Um, we, you know, it is that, that department, it's, it— we still have couple empty slots, right? But we're, we're, we're, we're better staffed than any other department out there. So based on our mountain safety plan, that's where we, where we need to be.

Is it— and I'll look to Craig for a lifeline on that. Is that— that based on our mountain safety plan, we have the staffing we needed, we need? Yes, throughout the area. Yeah, patrol staff. Well, Very good.

Mr. Kelly. Thank you. I was just looking at the ski patrol numbers and I noticed it's a very modest increase in FTE, but the increase in the sum of total cost greatly increases that. Is that because you're trying to achieve closer to something of a better pay parity or what's the reasoning behind that? Increase there.

So through the chair, they— that this part does not include the pay increase. This is simply looking at hours worked. And, and so in, in the spreadsheet on this, and I, I slimmed it down for this conversation, in a, in a— the way that the full-time equivalents go up is there's a significant amount of hours on top of what we're currently working. And so that, that's going to drive that. Thank you.

All right, I want to make sure, you know, um, yeah, let's keep, let's keep moving forward because I want to make sure we, we can get discussion on that. So, so staffing levels is one piece, but pay increase is the other. So the most recent increase, and the assembly has been great, that just when the board has come to the budget conversations and said we need an increase in SAP pay, that's happened over the past few years. But even with those increases, we have not kept up with industry standard pay or inflation. We know that inflationary pressures are impacting every business and city government, local government, state government.

Positions out there. So we did get that raise, now 0.25, that's great, um, but the wage study, uh, that Hannah worked on, you know, a year ago shows that we're still significantly behind the industry norm, up to 40%. And when we try to attract people to work here, um, with industry experience, low wages and the lack of housing are the biggest, absolute biggest detriment to recruitment. So taking just a quick look at if we did a 15% increase to our existing positions, not the new positions, but that 33.99 full-time equivalents, we've got about a $290,000 increment that would be to, you know, into our personnel costs for next year. If we were to take a big swing at this you know, you're starting to push $800,000 in your personnel increment.

And once again, that is just for the existing budgeted positions. If you were, and if you really take a big swing at this whole thing, let's say we go 15% wage and we're gonna add all these new positions, you know, now you're starting to push $3 million in additional personnel costs. And so in that conversation, we have to balance is what's the right number? How do we attract people in those positions? And then how do we generate the revenue to justify what we're doing up there?

And this is, once again, this is all about winter operations and hasn't gone to that full, full boat summer operations that we've talked about in the past. But, you know, one of the questions that seems to get raised more and more is, you know, are we limiting our revenue opportunities by not having staff. So if we don't have the maintenance folks to maintain the equipment, and if we don't have enough operators, or if we lose ski patrollers, we're going to either not have available programming, or we're, you know, we're not, we're not going to have the available programming, and we aren't going to be able to attract more folks in. Yeah. Mr. Senninger.

Um, so when you're talking about a 15 or 40%— excuse me— uh, wage, wage increase, are you talking about that just across the board, or is it more targeted towards, you know, like maintenance staff that you spoke to being kind of way behind the curve? So thank you. Through the chair, uh, right now that's across the board and, and not, not looking at targeting maintenance positions. You— if we did a 15% increase on maintenance positions, we would still be way below the going rate, you know, in Juneau, let alone the rest of the state. Good.

Ms. Wall had a question. Thank you, Mr. Chair. I feel like I probably ask this question every time that these groups get together, but it becomes more and more relevant. We've had some conversation about, you know, if, when to get Eagle Crest employees on the same wage scale steps as CBJ.

I feel like the reason it hasn't happened for so many years is the dollar signs were just not feasible. As we get towards these numbers, are we in the ballpark of what it would be just to get Eagle Crest on the city, um, pay scale? Do you know that? So yeah, through the chair, thanks for the question. I, I don't know, but what I would recommend that the assembly do is look for whether it's allocating.

Few monies in the budget, or just directing, you know, the manager and staff to go work. But let's— if, if, if there is a want to go down that path, then City HR needs to come sit down with Eagle Crest staff and work out exactly what that looks like. Because I, you know, on, on the board, we have no idea what that looks like. Well, I'm sorry, Hannah probably knows what that looks like because that's her business, but, um, But we, we, we need to, to formalize the study and not just say we, we think we should do this. And then we have to look at what are those positive negatives, you know.

You know, there's always been a concern that you're going to lose that flexibility, you know, as a board to attract the right people in the ski industry and, and, and make sure that, that, you know, once again, ski area is not city public works. And so we'd have to, you know, fully vet that. But, but I, I think either money needs to be allocated or just direction to add this to the project list of go do the study and come back to us. Because we can't necessarily do that as a board. And then I'm sure Hannah has something to add.

Shiley. Thank you. And yes, so actually this was as part of the Duncan report. Duncan, Kirk Duncan, very kindly put together kind of an estimate of what he would have assumed, or would assume with his knowledge of the city and his knowledge of ski areas, um, very rough estimates of what it would take to get the Eagle Crest employees on kind of the city level. And if I'm recalling correctly, that end estimate was up into the $4.5 million.

So we're spitting distance. But as to Mike's point that is an estimate based on his best assumptions and I trust his judgment. But I can find that resource and send it to you as well if you like. Ms. Adkisson had a question. Thank you, Mr.

Chair. Just looking at the 15% and full staffing estimate there, I guess my question is, is that 15% just sort of so you can get like a, here's the lowest ballpark of what we, if we had all the staff we wanted in an increase? What that would cost, or do you think you could start filling positions at a 15% increase?

So through the chair, it will help us fill positions. We are still going to run into the issue of if you find the right person in the ski industry to come up here, where, where do you live? But it, but it is one piece. And if we— and, and the reality is if we get a 15% increase tomorrow, in all likelihood over the next few budget cycles we would still be coming in to continue to raise the floor of our wage scale.

And, you know, so we'll, we'll, we'll work— we'll have that, you know, into that budget request, but then we know you have to consider that increment with every other asset that's on the table in the city budget.

Mr. Bryson. Thank you, Mr. Deputy Mayor. Uh, Mr. Secretary's last comment, uh, kind of did it for me. Um, I think the question I'm going to try and ask the board is when are you going to have the discussion that you guys don't have a way out of this? At some point, these numbers are Well, it might even be today unattainable, knowing what other asks that we have for the city budget.

Like, we introduced ourselves, how many years we've been on this assembly. I can't think of a year that the Eagle Crest has not come with their hat in hand and said, we need a whole bunch of money from the city to do everything that we want. And I was actually the supporter of the gondola. I was the assembly member that brought that ordinance forward. And so I do support Eagle Crest, and I want Eagle Crest to be a year-round operation.

But the way that it's being run right now as a private sector business that's being run by a government entity is very clearly not working. If it was working, you guys would have made some of the corrections and I wouldn't be hearing the exact same message that I heard 6 years ago that we don't have enough money, we can't pay our people enough. We are not— The answer's not here. If it was, we do these very thorough hiring. I'm looking at the people that recognize from the Eagle Crest Board.

You guys know this stuff like the back of your hand, but we are only making— the situation is only getting worse, and the asks have continued to get bigger. And to go into get us to summer operations that money's not going to be there. I, I just can't fathom how we're going to be able to carve out every request that you, Chris, had.

When does the board start discussing what other options are? Because your option of coming to the city and saying, give us every nickel that we need, has failed. It failed last year, it's going to fail this year, and it's going to fail next year. So at some point, the board has to have a discussion. What do we do next?

What do we do different? What's the other path we go? Because coming to the city and saying give us more money, that's going to fix things, has not succeeded. So has the board had any level of discussion about what other opportunities may be out there? Because having the, the city coffer of CBJ bail out Eagle Crest, again, the answer will be probably not this year.

Sorry, Mr. Chair, hope that didn't derail us too much.

That's fine. I think we should all remember that Eagle Crest is the, I guess, activity that generates the most revenue compared to others, the pools, the ice rink. I'm not sure if they're asking for everything, but do you have anything you'd like to say to Mr. Bryson's question, Mr. I also—. Thank you, Mr.

Chair. And I also think Mr. Cullum's gonna— he had your hand up. Okay, but the, the short answer is no, we're not having that discussion. We're open to a discussion, um, but, but that has not been part of board work, committee work. There's been over the years a focus on, you know, making sure that we can get to year-round operations as the solution for a lot of the things that you talked about, and we're, and we're not there yet.

So we're, yes, we are here asking for more and that's been the history of Eagle Crest over time. And we're really, really, really wanting to get to that point where we don't have to with summer operations. But I'll defer to Mr. Kolar. Sure, Mr. Kolar, Mr. Kryne, or both. Yeah, I was just gonna say that, you know, we're still trying to understand what it takes as a board right now to operate efficiently at Eagle Crest.

Like what Mr. Saetre showed you here is kind of the ideal. You know, he explained earlier that this is the result— these numbers are the result of the, the team at Eagle Crest getting together and looking at other ski areas and seeing how they're staffed and, and then comparing that to how Eagle Crest is staffed. At the same time, I think the board understands that the assembly has been very generous and helped Eagle Crest procure the gondola, is helping us along that path. And I think if you believe the Duncan report, it's very clear that there is a path to success for Eagle Crest, right? So we have a gap that we need to bridge.

We're not perennially gonna be here hat in hand if we can meet those goals. But at the same time, we need to be able to get to the gondola a, in a healthy way. And so I think what we're, what we're trying to share here tonight is that there's, there's an ideal, and then, you know, we're going to discuss as a board what we can, what we think is feasible, what will get us to gondola operations with a healthy Eagle Crest and the sustainable staff. And this is my understanding, I'm not speaking for the whole board, But in— and that'll be represented in our budget request. So, you know, we're, we're not, um, I think by any means trying to position ourselves as, as forever dependent on the assembly.

But we are, uh, Eagle Crest is part of the city, and we are a recreational area that's owned by the city, and we need support from the city. And, uh, and I think unlike other recreational areas, we have a path to sustainability that reduces, if we can achieve those goals, the city's obligation to support us. So I think we'd be very proud of that, and we just need to bridge that gap. Mr. Grant, anything you'd like to add?

So, I mean, I think, too, I actually, I hear what you're saying, and, and Um, I think the board has realized for years that things couldn't continue as, as they were before, and, and that's what led to this decision to make a major purchase and a huge change in the way Eagle Crest operates by purchasing the gondola. But I think your, your question, what it really brings up or, or just makes very clear, is that we have to make sure that we're moving forward on that.

Project. I mean, every month the gondola sits in, you know, on the side of the highway, it's losing money, right? And the city's losing money, and Eagle Crest is losing money. Until it's actually operational, um, those— it's not going to generate revenue. And, and that's something that is, I think, unfortunately a little bit just out of the hands of the board and really of Eagle Crest staff.

I mean, that's something that maybe Assembly or the city can really help with is continuing to just ensure that that project gets prioritized and pushed forward because it has to move forward in order to solve the problem. But yeah, I think that we actually have recognized the problem for a long time and made a decision about— I mean, together with the Assembly, made a decision about a solution.

But at this point, the solutions, I think it's taken a bit longer than we all maybe hoped for. And yeah, that's, I think, I would say would be the first answer to your question or the best answer to your question. I know Ms. Scandies has a question. I would like to leave time. We have about 20 minutes left to go over the CIP, but Ms. Scandies, if you have a quick one.

Just to be reminded, the 6% that we did last year, how you targeted that, just in the frame of this.

I didn't catch the last half of that. The 6% last year, how was that implemented, targeted? Could you please remind me? So it was across the board. It was across the board.

Great, that's all I needed. Very good. Please go to that next slide, Mr. Satri. So I think we're just getting to the CIP slide now. Yeah, so next slide there.

So just pasted in the current CIP proposal totaling about $511,000.

The Black Bear fix is a big piece of that. We have to make some final decisions on the scope of that project here shortly. But I believe it also needs a new haul rope, and we were working on getting that ordered the other day, if I remember correctly, Craig.

So that's the 511 that's been identified. But the team has also gone through and just started looking at area by area at projects big and small that need to be addressed. Made a big master list, worked with TJ, our board member who lives in the project management world in terms of doing some prioritization and started to roughly put that out year by year. But in addition to that normal CIP load, you know, especially in these smaller projects, we're still looking at at least $1.5 million in CIP dollar or additional CIP dollars between now and FY30. And there's about 700,000 of them that are potentially could be done end of this fiscal year and into, you know, the rest of the FY26.

Now, a word of caution. This is a list of projects. The costs have not been fully estimated. Resources haven't been assigned. Schedules have not been put together.

This is the wish list of projects. And, you know, in my, private sector world, you start with that big wish list, you start assigning years to them, you do that prioritization, you look at the available capital, you knock off the ones that you can, but you still keep all the projects on the schedule so that when more capital monies or more resources are available, you can start hitting those. And you don't just forget 10 years down the road that, oh shoot, I should have done that project, right? So we're trying to start that master planning process, but, When we look at past years where there's been $250,000, $350,000 annual CIP, once again, that is not sufficient to meet the long-term needs of Eel Crest now that we're 50 years into operating. And once again, that was the whole point of moving to summer operations, generating revenue so that we could be self-sufficient on capital going forward because there will be some big ticket items coming down the road as well.

Uh, but this, this is, this is what we're looking at right now. Um, at least, you know, we got $500,000 in proposed CIP, and then we're identifying these other projects. And we'll have to do a little bit more work on, like I said, in terms of, you know, cost estimates, feasibility, resources. Uh, because reality is, at existing staffing levels, Eagle Crest is not going to complete a lot of these projects on their own, and we will have to use contractors if they're available and at a higher cost.

Very good. See the slides? Yep. Excellent. Thank you.

Um, we're at 6:15, but I did want to give Mr. Simmons or any members of the board a chance to say anything. Would prefer brief, just so we can continue asking questions, but Um, if anyone does want to make any additions. Mr. Simmons, uh, this is actually very recent and, um, it's come to light since Mike and I last talked, but the CIP has to be submitted at $350,000, so it's actually less than the $511,000. So there's $161,000 of that that is now off of CIP and moved into that master project list we have, just for A very recent update as of yesterday, I think. Thank you, Mr.

Chair. Yeah, I appreciate Mr. Bryson's comments. This is a private sector business, and thinking back on a good snow year, we celebrated breaking even. That was how we were successful. Like, wow, we broke even this year.

If you look at the costs of things over the years, I would say There's people who would give you better, but maybe 10 years ago you could have bought a brand new chairlift for half the price of now. The industry costs have ballooned. And throughout that time period, while we were celebrating breaking even on a good snow year, everything has gotten older. So I think to come to the assembly with these numbers and these requests without anything on the backside, that would not be, that'd be a non-starter. But I think the fact that we have the Duncan Report, and then I think it was last month or 2 months ago, we had another report where it showed showed there was some, a lot of validity to those numbers from the Duncan report.

So we're in a tough spot. Things have gotten older, but it's, there is a light at the end of the tunnel. And I think that's why we're just asking for support to keep things moving because while it's a private sector business, I really think this is a part of Juneau and we really need to keep it going. Thank you, Mr. Chair.

Thank you, Mr. Dale. And then, you know, not that we, force this upon you. I mean, I think there is an affordability component that you all are aware of as members of the board, and $70 tickets and $13 chicken tenders— I don't know if, you know, those could be higher, and they are where you do that, where other businesses and other ski resorts do it elsewhere. So I know that's a consideration. Other questions from the assembly?

Miss Hall. Thank you, Deputy Mayor. Um, I'm just wondering, Mike, if you could share a little bit about the J-1 visa folks, you know, additional cost incurred to bring them here, if there is, or how long they're allowed to stay. Um, you know, just a little more light on that. And perhaps, you know, if we paid staff more, would we be able to attract locals and, and not incur the extra cost associated with that program?

Through the chair, I, I don't have all those details. Um, you know, we do have to guarantee a certain amount of hours and pay for them. So if, if we weren't operating and they're here, you're still paying the bill, right? So, so you do have a, you know, a potential liability there. Um, perhaps we could bring Erin up.

She's been very familiar with our J-1 program. If you have any additional detail? Mr. Chair, could we bring Aaron up as part of staff?

I can see— Greg, can Greg answer that? That's okay with Aaron, yeah. In short, the J-1 program is a Band-Aid solution. They're really wonderful. There's not a lot of costs to the program, but there's a lot of work that goes into the program, so there's that kind of costs.

They're really wonderful to have, but they are here for here for a very limited time. They're only here for their semesters, so they are all leaving currently this next week. So to answer your question directly, they are a Band-Aid solution because our rates are not where they need to be to hire locally or to attract people to Juneau. So they're helping, but they're not the solution.

I had a question. Of the, you know, 34 budgeted positions, how many were unfilled this past year? I don't know the number, the exact number off the top of my head, but the short answer is a lot.

Yeah, too, too many.

More than 5, 10?

Oh yeah, more than 5, yeah, yeah. A dozen is safe to say? Yeah, Erin's saying more. Yeah, yeah, there's probably a dozen just in her departments. A lot.

Thank you. Mr. Saniger. So looking at the roughly 5,000 summer visitors that you highlighted from the coach tours and Segway tours, that sounds good but also is a bit of a rounding error compared to the 1.3, 1.6 million visitors we get in the summer. Do you feel like, you know, gondola aside, that Eagle Crest is doing all it can to maximize summer revenue currently? Or is there anything that could be done in advance of the gondola to, you know, continue to capitalize on summer visitors coming into Juneau that maybe effort hasn't been put into yet?

Um, Thanks. Through the chair, that's an interesting conversation, um, because, you know, we are trying to balance, you know, local existing uses with commercial uses. And I think having this, you know, small number to start gets folks accustomed to us being able to share that area. We know it's going to be a big jump when we are into full, full gunnel operations. Uh, you know, we, you know, we've got you know, the zipline partners up there that we get, we get revenue from.

So they're operating, you know, the facility. Of course, the Segway tour is, is on their own. The coach tours do take Eagle Crest staff time. And so then there's that question of, you know, and how much time is facilitating a, you know, summer excursion versus knocking off our, our project list, you know, for, for the next year? Because once again, we have limited staff to go after revenue.

They're even just expanding our summer camps and hiring those positions is tough. You know, if we even want to just want to simply expand opportunities for Juneau families. So it's a chicken and egg thing of do you have the staff to do it and are you maximizing your revenue? And that's something that we'll kind of see when we sit down with staff and team. We'll definitely look at that.

Miss Wall. Thank you, Mr. Smith. This is maybe a broader question than just on the presentation. Is this a good time to ask? Yeah.

Okay. Um, you know, I think the big question for the assembly as we think about, you know, the, the funding moving forward is how long. It's really helpful to have the finances of what it's going to take, but the other big question is how long until we get where we need to get. And in Mr. Duncan's report, you know, he provided a conservative and an aggressive kind of set of, um, predictions for the future. So I'm definitely curious what the board's impressions of those conservative to aggressive numbers were, how, you know, if you had to put yourself on one of those, you know, likely paths, where would it be?

Or, you know, do you need— you know, I think his point was we need more information before we know which of these paths we're on. But that's where I feel like I need more information. So I'm curious how you all are thinking about that. Through the chair, um, and I had pulled it up on my laptop here, you know, presented to you all the slide earlier in the year that showed our original estimates of people and revenues and expenses in relative, and then showing the change in fund balance over time. And when we thought our project schedule was going to be a lot quicker, you know, we were going to be cash flow positive by FY28 or 29.

Duncan's report shows us being, you know, basically in a free cash flow situation by FY30, FY31. And so it definitely gets back to, you know, what Mr. Kryne was saying is we've got to make this happen. Sooner rather than later. We've got to pull that cash flow curve, you know, into the near future instead of continuing to push it in, into the far future. And, you know, we're, we're, we're on the bus.

We are moving forward on, on gondola operations. And, you know, we have to do everything we can to, you know, meet these next couple construction seasons to get it there so that we can, you know, recognize those revenues. And, and there's Ultimately, for Eagle Crest to, you know, be financially viable, financially successful, we have to maximize the amount of summer visitation at the area. So you are pushing into that aggressive scenario.

Miss Yuskandis. Thanks, Mr. Chair. A follow-up on that sort of general idea that gives me a sense of obviously the board wants to make it sooner rather than later, but you've also been wrestling with, uh, in recent times realizing that this is not sustainable and trying to address what you need in the near term just to get there. I think someone said healthily, or get there to where you can make that switch to positive revenue.

What percentage would you— or maybe not percentage, but how would the board characterize like how much time you're spending right now on Gondola versus how much time— because you have to spend your time on all of it, and I know it's all related, but how much of your time right now has been spent on Gondola? So So through the chair, the reality is we aren't spending time on the gondola because we're waiting on the engineering process to get us to the point where we can go out for bid on this. And it, you know, and that's a conversation that, you know, we have to have with city manager in terms of, you know, how do we allocate, you know, resources both within their office and from our staff, because right now, I mean, things are stagnating and we have to get to the next step of getting the package out so that we can start moving forward on contractors and construction. But that's also not, I mean, the board needs to advocate for that to go faster, but we're also not the engineers that are putting that package together. Right?

So, you know, it— there's, there's work to be done. There's coordination needs to be done. We have to make it a priority as a board, as a staff, with the help of the assembly and the city staff.

Mr. Bryson, we have 3 minutes left. I just wanted to finish up because, uh, last time I spoke it sounded like I might be down on Eagle Crest.

More citizens have told me that Eagle Crest is why they live in Juneau than any other comment that— or reason why people say they live in Juneau. I very much believe in Eagle Crest because I know how many people Eagle Crest is special to, and I was aware that it has the highest cost recovery of any of the city operations that collects revenue. I don't want Eagle Crest to close. However, we saw another entity whose only solution was to come to us and say, "Just give us more money, everything's gonna be fine." And they got in more hot water, like super hot water, and it took them a little while to get out of it. I'm hearing the same thing.

Just give us plenty of money and everything will be okay. And I would urge this board to explore other options. What if there isn't any more money? Every single business on the planet is sitting waiting for a giant chunk of money to fall in their lap. It does not happen, and it's not going to happen here.

So what would be the other strategies to achieve the goals that you guys want? If you come back next year and your fiscal picture is even worse, it's going to be that much harder for us to get you guys to the end run. So you need to be thinking about Plan B.

If there was enough money, I think everybody would just give it to you. There's not. That's why we're having this discussion the way that we are. But I very, very much believe in how special Eagle Crest is to the community of Juneau. I want to make sure I said that out loud.

Thanks for the opportunity, Mr. Chairman. Yeah, thank you, Mr. Bryson. And as I said at the beginning, we'll be looking as an assembly during the budget process for what kind of funding support we provide to Eagle Crest. Um, we are at time. Uh, Mr. Saytri, members of the Eagle Crest board, thank you for your work.

Um, staff, thank you for yours. And community, thanks for your interest and engagement. Um, Miss Wall, what time would you like to start finance?

Very good. Thanks everyone, we're adjourned.

I call the March 5th, 2025 Assembly Finance Committee meeting to order. Um, Miss Swindle, will you note the roll? Thank you, Chair Wall. We have all assembly.

Members present in chambers with Mayor Weldon present virtually on Zoom.

All right, that brings us to approval of minutes. You have the February 5th Finance Committee meeting minutes in front of you. Any changes to those minutes? Seeing none, I'll consider those approved. This brings us to agenda topics.

We are going to start with an investment update. We have Mr. Whithone here who who we often see on screen and has tried to come visit us before and has chosen unlucky dates. So we're excited to have you and to hear what's going on outside of Juneau, where we know things are wild, and we would love to hear what you think that means for us. [FOREIGN LANGUAGE] Oh, and you will have to press the little button there, and when it's green, you can speak.

Ah, perfect, thank you. Well, it's nice to be here in 3D. So, um, uh, yes, uh, I mean, this has definitely been an interesting time for everyone. So, uh, let's go through a couple of slides, and I usually like to set, um, the context with, you know, the economic situation, what's been happening with our economy before we start talking about what's going on in the portfolio. I'm mindful I've got a limited amount of time, but just in case you aren't familiar with who I represent, Insight Investment, we're part of a bank in New York.

We're their investment advisory arm. Our particular division of Insight works strictly with public sector clients all across the country. So with that, let's go down, I think 2 slides. Oh, nope, let's go back one. Thank you.

Truly the envy of the world, where I— the, the good news that I'm bringing is that the US economy is doing well and has done well, uh, since the pandemic. You can see this is a GDP growth, and comparing the US to Japan, the euro area, France, Germany, and the United Kingdom. And by far our economy is the line on the top and outpacing all the other ones. Just to give you an idea, GDP, gross domestic product, is the broadest measure of economic activity. So that kind of measures how's the economy doing, you know, how is businesses across the economy doing.

And then 2023, we grew at 2.9%, and in 2024 we grew at 2.8%. Everyone kept thinking it was going to slow down, and it did slow down. Yes, kind of in a rounding error, it slowed down. So actually '23 and '24, we, we did very well. Just to put it in context, in the 10-year— the 10-year average for GDP growth before the pandemic is 1.9%.

So, you know, we kind of think in our mind, and it's like, you know, 2% is average growth rate. The, the Congressional Budget Office, when they're doing projections, they're projecting growth at 1.8%. So it's not out of that character. But in '23, we grew at 2.9%, and last year in '24, we grew at 2 8%. Now, we're expecting a slowdown, and our chief economist, I will tell you, he's expected the slowdown for the last couple years and it hasn't happened.

But we are expecting a slowdown this year, and given some of the recent changes that we're seeing with the tariffs and everything, it, it could be a more dramatic slowdown than even we were anticipating. We're, we're looking for about a 2. 4 To 2.5% growth this year. Again, above trend, above the long-term average, which is good, but it could be slower than that. And I will tell you that back in December, uh, the general estimate of a possibility of a recession was about 10%.

Pretty unlikely, right? 90% Chance we're not going to have a recession in 2025. That's recently risen to about 25%. So there could be an economic slowdown coming, particularly if you think about laying off a lot of workers, right? You know, federal workers and federal contractors.

And you starting to put some shackles on economic activity by putting some tariffs in. Now, some of that could be temporary. I mean, we saw tariffs go in one day and now today, now they're modifying, you know, so that could it be that these go in for a month or 2 months and then they get changed and they back off? We don't know. But right now, the economy is strong.

We came into this year strong and looking good. I'll go down. Let's go down one slide.

This is a slide talking about macro expectations. It's called the Surprise Index. We like to track it. And you can see last fall, back in September and October, we were getting some— that's that dark green line. We were getting above the zero line on the left-hand side.

That's zero surprises, basically. Think of it that way. We were getting really positive surprises back in September and October and November, but recently we're not getting surprises. And this ended at the beginning of February. So how is this going to look now if we go into March or April?

Because now we're starting to get some of these, uh, shocks coming in from the tariffs. So this situation could be volatile and could be changing. Let's go down to the next slide. Let's look at the labor market for a minute.

The labor market took a little dip last summer. You see that in that sort of July area and September area where it was slowing down. But recently in, in, uh, in November and December, it, it shot back up. And you can see that 6-month average, rolling average, which is the line, and you can see it starting to go up. Now, last month was a little soft.

January can be a little soft because you get in the post-holiday period. You know, people get hired for November and December and get kind of laid off in January, and there's some transition there. January was a little soft. We're going to get new numbers coming out to give us a peek on Friday of this week, uh, the non-farm payroll comes out. I, I think we could be seeing some signs of maybe getting some of that slowing down a little bit.

Now the long-term average is 178, or the 6-month average has been 178,000 new jobs, uh, per month, and that's pretty good, particularly after some of these these big numbers back in, in '21 and '22. Yes, it's slowed down, but it's still at a sustainable level. And I will tell you that the unemployment rate was up as high as 4.2% and has now actually dropped back down to 4%. Now, when I went to school many decades ago, I will say, we always said frictional unemployment, or, you know, the full employment is around— you're always going to get unemployment of about 4.5%. So that's what we call frictional unemployment, or unemployment from people changing jobs or moving around or changing positions or, you know, moving to different areas of the country or getting temporarily laid off, that sort of thing.

So the unemployment rate's still good. The market's coming back into balance. If we go down to the next slide, The labor market, the number of job openings versus the number of people looking for work is back in balance. And it wasn't there for a couple of years. There are a couple of years where it was completely out of balance during the 2021 and '22 period.

In that post, you know, in the pandemic period, you had a lot more job openings and then you had people looking for work. And now that's come back into balance. So that's also very good for the labor market. And it has cooled off somewhat. And this goes to the next slide on inflation.

We look at that and I know that's a complicated slide, but inflation was very high, primarily because some of that was wage inflation that we saw from all these the fact that we had a lot of job openings and not enough people to fill them in that post-pandemic period when a lot of people retired and left the job market, and you had a ton of openings and you didn't have people to fill those. But you can see inflation coming down. These are a number of different measures of inflation. The most important one is that green one, that light green one at the bottom, um, second to the bottom there. That is what we call core PCE, or personal consumption expenditures.

That's the measure that— the most important, because that's the measure the Federal Reserve looks at. That's their core measure. When we.

They take out food and energy because those are the two most volatile components. And it's running right now, well, at the last time when they measured this on February 8th, the January numbers were 2.79%. We have such recently last week got the numbers for January and it's dropped from 2.79 to 2.6. inflation. Keep in mind, the Fed's goal is to get inflation running at 2%. Why?

Because that matches that long-term economic GDP average, right? So you got inflation growing at the— about the same level as GDP. That's a— that's an economy that's in balance. That's why their target's 2%.

So are we there yet? No, not quite there. But you can see we're making progress. Now, late last fall, you see that kind of, that green line kind of levels off. It was dropping pretty steadily and then it kind of levels off for a couple months.

Late last year, we got some leveling off on that, but we did just get recent January numbers that are showing it's improving again. So it's continuing to drop. And we're hoping that's gonna drop again this year. In fact, if you take shelter Shelter is the big problem. Shelter is a sticky component.

It doesn't change fast, right? You know, the housing, housing prices, they may, they tend to go up. They tend not to go down unless we're in that big housing crisis. Like, you know, you saw housing prices drop in Florida, for instance, during the housing market. But they tend to be pretty sticky.

They tend to stay there. They don't go down easily. And if you take shelter out of that number, which is running at about 4%, 4.6%— if on the next slide— then the rest of that index is running at 1.9%, and that's right at the Fed's target. So if we can solve the shelter problem, that is going to get that right in line with where the Federal Reserve wants Now I put in a couple more slides into the presentation that I do want to talk about. This is about tariffs because this is a big wildcard.

So look, the economy's doing pretty well. GDP is running pretty well. Employment's good. It may be softening and maybe slowing down a little bit. And inflation is finally getting back into control.

Those are the components we want. Um, can I pause you for some questions? I saw—. Sure, absolutely. If that's an okay time.

Mr. Bryson. Thank you, Madam Chair. Um, I really liked your information about taking the shelter component out of that. Um, our community has an affordable housing, uh, fund, and we've prioritized, uh, helping, uh, the development sector get more housing going. How would something like that impact— I know that we're looking at the national economy, but what would we look for in Juneau's economy to see those same marks?

Well, housing's been a big problem. It's been a big problem since the, since the great financial crisis, right? Because that was caused by housing, overbuilding housing. What happened is a lot of those developers went out of business. Particularly the guys who were willing to take risks because they were— took the risk, they went out of business.

So the guys that were more conservative were less. We've underbuilt housing in, in the U.S. But I can't remember what the number is, but by millions of units, we're millions of units behind where we should be. And that's what's causing the housing crisis. So anything you can do to help incentivize people to get these housing units built is important.

We live up in the— we talk about the ski community. Well, I'm from Colorado. I'm in the Colorado office in the Western Division. And, you know, we've got a place up in the mountains. And finding housing in the mountain communities, they all are subsidizing housing.

Everyone up there. Every community has subsidized housing up there because you can't— otherwise the guys that are working at the resorts can't afford it, and where else are they going to go? Uh, so I don't know how to, how to help you with your, your local problem, but it's a huge problem nationally. And unless people— in order to keep people in your community, this is the, this is the question. It's like you said about the resort.

You know, people want to be at the resort and that helps keep it as a benefit to the community. But it's, it's pricey, right? I mean, and housing is the same way. You're going to have to figure out how to build units to keep families here. Otherwise they've got to move away.

And I've got 5 kids, so those kids got to, you know, it's hard for them to stay in Colorado because it's one of the highest housing markets in the country. Sorry. Oh, that was the exact information I was looking for. So thank you for that. And I also have 5 kids.

Oh, other questions? All right, keep rolling. All right. So look, the economy's good. Is that— is that great for the portfolio?

That's really good for the portfolio. We were now seeing what we call positive returns, real returns in the portfolio, which means the nominal rate that the portfolio is generating is more than the inflation. And we haven't seen that in a decade, really. I mean, you know, so that's really good for the portfolio. The portfolio— and Angie's there because Angie knows this— the portfolio is generating a lot of income, which is great.

It's great. And it's great for all of our public sector clients because all their portfolios are generating a lot of income. And that hasn't happened in a while. So that's good for all the people that we work with. Wildcards.

So all things good in the economy, all things good the last couple of years. Expectation is that it's going to be good again this year. But this is the wildcard, of course. I mean, you know, you see it on television because no one knows what this means. I know the lines where these cross on the zeros are hard to see.

Uh, the bottom, uh, the horizontal, uh, axis there is— that's the trade deficit. And the vertical axis— and you can see the zeros. I don't know if you can see them. My eyesight might not be that great, but yes, thank you. I appreciate you showing them the zeros.

That's the point where horizontal axis Trade deficit, vertical axis, the differential between what we charge these countries on tariffs for goods coming in here and what they charge us for goods going there. So zero is way down there at the bottom. That's neutral. That's we match them, they match us. That's the reciprocal tariffs that you're hearing people talk about.

That's the countries there in that cluster on the bottom. But look how many people are up top with a big differential, charging 10 times what we charge them for their goods. And look at the trade deficits. Of course, you've got China way out there on the end with the big trade deficit, but Mexico right in the middle there. And then you've got— I think this is what, uh, Vietnam.

It's kind of surprising, but we have a huge trade deficit with Vietnam. Then you've got the European sort of companies— countries here with Germany and Ireland and Italy, and Canada's right in there too, as is Japan. So those are all the trade deficits in terms of billions of dollars.

And, you know, everyone's— a lot of those countries are down on those lines, but the reciprocal tariffs are going to be the guys that are higher up on that vertical axis. So that makes a big difference. Um, everyone says tariffs are going to be inflationary, so we could be seeing a reversal of that trend in inflation. But the question is, how long? It's, it's inflationary over the long haul.

Is it inflationary if it only goes on for a couple of months? You know, you got reversals of the tariffs going on within a couple of days. You know, they get announced and then they're put on hold. And so we don't really know what that effect is going to be. Our, our thoughts are, as we're projecting, that the Federal Reserve is going to drop interest rates.

They dropped 100 basis points last year and a basis point is 1/100 of 1%. So they dropped interest rates 1% last year. We think this year they're probably going to do, uh, 2 moves, 2 25 basis point moves that'll drop interest rates another half a percent. So rates are probably going to go down. That's good for the economy, who are people who are borrowers.

That's not so good for the portfolio, but still, rates are still relatively high. And the portfolio's returns have been pretty darn good. So if they— if some of these higher rates start to moderate,.

Our idea is to move the portfolio a little bit longer, try and lock in rates as long as they're high as they are before, um, they start to go down. And it probably won't happen. The Federal Reserve probably won't lower interest rates unless we see something very surprising, possibly as a result of tariffs, um, until mid-year. So rates are going to be higher again this year, and the portfolio is going to be generating some more income. One more slide down, and then we're going to take a look at the portfolio.

And I've gone gone on too long, but we'll take a look at the summary. This I thought was very interesting. This is state by state who each state's top trading partners are. And I thought it was interesting, and maybe you know more about this than I do, but Alaska's top trading partner is South Korea. And I was surprised at that.

I don't know, unless, you know, I don't think it's you guys buying like Hyundais and Kias. I think it might be more you're selling oil to them. I mean, fish. Ah, fish.

Interesting. Okay, thank you. Because I'm like, I was looking at that, I was like, I don't know what that is. Fish. Interesting.

Interesting. Okay. So I thought that was some point that's interesting. Let me go along because I know it's a long night for you. One quick question before we move on to the portfolio, Mr. Kelly.

Oh yeah. Thank you. And this actually has to do with inflation. So with kind of the unpredictability that you're talking about in like how long the tariffs might happen, And how— yeah, basically the entire unpredictability with the tariffs. Is there any activity that you would recommend, like especially when we're thinking about housing?

Like, is there anything you— or if there's any construction projects that we have, like, are you suggesting— would you suggest that like now is probably a better time to start buying up that stuff before the prices inflate? Or do you have any other suggestions? Yeah, well, it's a complete unknown. I'm, I'm sorry, I can't help you with that. That's— this is the problem with the tariffs.

We haven't done tariffs in this country for almost 100 years. All right, so we used to fund the country with tariffs back in the 1800s, but, you know, as they got more into free trade, you know, before the First, Second World War, in that period, they started slowly getting rid of tariffs because we used to fund— that was when the income income tax came in, right? Remember when the income tax came in, in like, I don't know, the '20s or '30s or something, they slowly got rid of tariffs and they went more towards free trade and then they brought income tax in. So my point is that we don't really know what the effects of tariffs are going to be. Academics will tell you it's inflationary.

So if you're looking to buy things, you better think about maybe adjusting the cost up, particularly if they're, you know, gondola poles and they're made out of metal. Because that's one of the things that the president is trying to get more domestic industry built back in the country, and he wants to bring the steel industry back, which has essentially moved overseas. And so one of the things they're focusing on is metal items. And so his trade policy is really to help long-term domestic manufacturing. Now, we talked about GDP earlier.

We break GDP out into manufacturing. How much— think about this in your own mind— how much of GDP, of total economic activity in this country, do you think comes from manufacturing? 50%?

What's that? 10%. 10.3%. So when the president comes out and says, we don't, we don't make anything here anymore, and we found this out in the pandemic, we don't make a lot of pharmaceuticals here anymore either. And when you have to get them during the pandemic and the other guys don't want to sell them to you, it's a problem.

So his plan on an on tariffs is really trying to build domestic manufacturing back up so that key industries, steel being one of them, uh, pharmaceuticals being another one, are being brought back into onshoring into the country. And that's why he's trying to drive, like, the car manufacturers from don't build the plant in Mexico, build it in the, in the US. And that's what the tariffs are incenting in and about. Will it work? We haven't done it in 100 years, so we don't know.

And will it cause inflation? I think in the short term, yes. In the long term, kind of, I don't know. And that's what our chief economist says too. So he doesn't know either.

Thank you. Sure. All right. Let's talk about our, our portfolio. Your portfolio, page 13 on my book.

But let's go down to the It'll have a bar chart on it.

That's the one. Okay. So like 1-year performance has been very good. We're at 4.20 versus the benchmark, which is 4.95. The benchmark is the 1-5 gov credit.

And we project to always try and make— our goal is to make about 25 basis points or a quarter of a percent over top of that. Benchmark. So, um, have we done that? Our 3-year performance versus the benchmark was about 32 basis points over, so that's good. Now keep in mind, the 3-year and 5-year performance are low because we had almost zero rates during the pandemic, so we've been coming up since, um, the rates started up in '22.

But really got going in '23, and '23 and '24 have been pretty good. So we've been adding a lot more revenue to the portfolio, but 4.25%, that's pretty good. That's going to probably continue on about that level for 2025. So that's good. And the portfolio is making some cash.

We go down to the next page and look at the asset allocation. I'm going to hold you for a question on that last slide. Mr. Steininger.

I noticed this slide, it says it's gross of fees. Um, if we were to look at this net of fees, would our, you know, earnings above the benchmark be like— what would it look like? Your fee structure is somewhere around, I don't know, effectively 4 basis points. So it would drop from 25 to, on a net basis, 21. So take 4 basis points off that.

I know we're an institutional firm, so we— it's big dollars, low percentage fees. So that's the way it works.

Oh, let's go down that asset allocation page. Just, just a quick asset allocation. It really hasn't changed as much. There's a couple of things to highlight. Um, corporate bonds running at just 31% of the portfolio.

Um, you see government agencies at about 19%. We'd love that to be higher. Um, and 25% for Treasuries in that government bond section. The reason the agency one isn't higher is we're at the top of the interest rate cycle. So these agencies are pretty smart.

What they say to themselves is, we want to buy longer-term, non-callable, non-floating rate, non-adjustable bonds so that we lock those interest rates in at the top of the cycle, right? The agencies are pretty smart. So what are they issuing? That they're not issuing that type of bond. What they're issuing is adjustable rate bonds or callable bonds, or they're issuing short-term bonds that will turn over faster.

And when they turn over faster, they're gonna get lower rates. They're smart guys, so we have fewer agencies in the portfolio. The Treasury, the Treasury issues the same bond structure no matter what the interest rates are doing. So we have a lot more Treasuries in the portfolio. And yes, So that's kind of the story right now.

The Treasury doesn't change their auction calendar, and so we have more Treasuries in the portfolio than we have agencies. The agencies are pretty smart. We also have some mortgage-backed— these are government-backed mortgage-backed securities.

About— you see about 15% between the government-issued commercial mortgage-backed securities and the regular mortgage-backed securities. Combine those two together, um, and a small piece of, uh, municipal securities, but those are taxable municipal bonds as opposed to tax-exempt because you guys are tax-exempt yourself. So those are just another alternative that we have. They don't often— they don't always make sense, but sometimes they do. So we have a.

Small slice in the portfolio. We think of them much more like corporate bonds, um, although they're— they have a better backing and a better track record. Um, and that's it in the portfolio, uh, for the asset allocation. Turn over one more last slide for me. Again, I'll open it up for questions.

The maturity distribution— you see the maturity distribution is skewed a little bit to the right. A little bit to the longer side. That's to help us lock in more, uh, in the hot top of the interest rate cycle. We want to try and push the portfolio duration a little bit longer, um, to try and lock in these rates before they go down. Um, our anticipation— they've already gone down 100 basis points last year.

Our anticipations are going to go down another half a percent again this year. If we go into recession, it'll go down over a full percentage point. So our— right now, our feeling on a recession is probably about a 25% chance of a recession this year. That's up from 10%. Uh, kind of surprising to us, but, um, we weren't looking forward in December at all, and We're going to have to see what effect these tariffs have on the general market.

That's where we have to look at. So we're going to have to see how that plays out. Um, if there is a recession or we— and things get weaker, um, the Federal Reserve could in fact cut rates sooner and more. That would be their reaction unless the tariffs cause inflation and we get into an environment where you're talking about you still have inflation and then the Federal Reserve is going to be caught between a rock and a hard place in that we have, you know, a recession and still have inflationary periods. And that could be tough.

And with that, I'll open it up to questions. Any questions from the assembly?

Yeah, that, that is called stagflation. If, for those of us who might remember it from years in the past, stagflation— slowing economy, still inflationary period— very hard for the Federal Reserve to to do anything about it because they can't cut interest rates because they have to keep interest rates high to keep inflation down. But that doesn't help, you know, stimulate the economy. And that could be a tough situation to be in. Not there yet, but I mean, everyone's keeping an eye on that because that is a possibility.

We just don't know what's going to happen. We just don't know what's going to happen with the terrorists. Ms. Flick.

Thank you, Chair Wohl. Thank you, David, for being here. We always love your presentation. I do want to let the body know that you are generally aware we've had some presentations and information from 3+1, They offer a cash mesh product that we use to help look at our banking, our investments, measure our liquidity, help us do cash forecasting. And we recently, I think right at the beginning of the calendar year, were able to restructure some of our rates with the custodial bank that holds our actual funding that Insight Invest And, um, through that restructuring, we were able to free up about $23 million that we, um, transferred over to Insight to have them include in our portfolio.

So, um, we have done an addition to this portfolio in the, in the recent past, and I just wanted to make you aware of that. Um, it is a net plus for the city in that we, um, no longer have money just sitting in an account that's not earning anything but is supposed to offset fees. So now we're paying fees, but able to allow those funds to grow. So it's a good situation, and David and his team help manage and invest that for us.

Thanks for that update. All right. Well, thank you so much for being here. It was really helpful. My pleasure to see everyone in person, and thanks for having me.

It's nice to see you. I'm going to let you go. Thank you. Because we have another kind of heavy topic coming up with the audit, I want to give folks a break and then we should be able to roll through the rest of the meeting. But let's take— that clock is very different than my clock.

We'll get back here at 7:30 on that clock. Call this meeting back to order. Um, this brings us to the FY24 CBJ/BRH/JSD audit. Do we have Miss Tarver? Joining us from Costa Rica, perhaps.

Hello, thank you. Sorry, it took me a minute there to get connected. You look tan. Yes, it's pretty warm down here.

Thank you for being here. We will just hand it over to you. I will— is it okay if we If we have questions along the way to interrupt you. Yes, it is. Okay, I'll try to pay attention to who's got their hand up.

Go ahead, Ms. Tarver. Okay, thank you. So, um, in the packet that you have for your meeting, you have 2 of the documents that we issue as a result of our audit. One is the letter to the assembly, and the second is a letter we call it our GAS letter. It's Government Auditing Standards letter.

But actually, where I'd like to direct you to, and I don't know if you're following along electronically or paper, is the PowerPoint which starts on page 102 of the, the online package, or it's Section D, Item 3.

And I can share that screen if that would be preferable. That would be great if you— it looks like you should have permission to share. And we also have it in front of us, so it'd be great to have it on the screen.

Okay, and I apologize, it's— I know it might be kind of small to look at. I'm working with dual, dual screens down here, and they're not my normal screen. So, so again, for those who don't know me, I'm Karen Tarver. I am the audit partner for the school district and city audits. And then one of my other partners, Adam Sykes, oversees Bartlett's audit.

And you only get to see me tonight, but takes a whole lot of us to do your audits. And so slide number 2 basically shows again the teams related to the 3 different audits we perform for you. And as you may know, in FY25, we will continue to be CBJ's auditors, But both Bartlett and school district audits will be performed by other audit firms next year.

So what do we audit?

For those who've been through audit presentation, some of these slides will be very familiar to you. But we do, for the city, we do what's called your ACFR, which is Annual Comprehensive Financial Report. That is your audited financial statement. And then we also have the compliance reports, which are your federal and state compliance schedules and schedules, and then also FAA passenger facility charge report. Tonight I'm only really talking about your ACFR and the financial statement audit, as the compliance audits haven't been issued yet.

For Bartlett, we do a financial statement audit. Again, Bartlett is a fund within youth. CBJ's the primary government, but they do have separately issued financial statements. And then Juneau School District, which is what is called a component unit, and it is presented separately from the city, although the numbers are brought in at a high level within the city financial statements. And again, that's a financial statement audit as well as federal and state compliance audits.

And there's also a State of Alaska Department of Education tuition report that we also audit. I mentioned ACFR. You'll hear me— I just wanted to make sure we covered that because you'll hear me use that term a lot. These are the different sections within your ACFR. And as we go through the audit report, this kind of picture is good to keep in mind because there are parts of this, specifically your government-wide financials, fund financials, and then your notes, and that's called your basic financials.

And that's really what we're.

Giving you an opinion on. The supplemental information, which is the governmental funds and proprietary funds information, are what's called supplemental information. We issue what's called an in relation to opinion. It means that we do procedures over those schedules and statements to ensure that they're in— they agree in all material respects to your basic financial statements, but we actually don't issue an opinion over them. You also have required supplemental information which again, we do some limited procedures over, but we don't issue an opinion over.

So I mentioned opinions. So we give you multiple opinions, and that's because you have what's called major and non-major funds. Any major fund is a fund that's significant enough, it typically is over 5% of your total funds. And so the general fund, general debt service, special, and certain special revenue funds, and your business type or enterprise funds are major. And then you also have internal service funds, which get allocated out in your government-wide financial statements to both the governmental activities and business type activities.

So our timing of the audit, again, this is a Generally, we do our work in May. We do some preliminary work in May for the city, and then October through December is our typical timeframe. The last couple years that's extended into February. And for the compliance audits, we actually have drafted those to CPJA Finance Office, and they have reviewed them, and we're in the process of getting ready to issue those. So those will be issued very soon.

Bartlett, we do our work in September and October. Typically we issue in October, November. They were issued in December this year. Our school district work is done typically in April with preliminary work in September for our final work, and then those were issued in November.

So again, um, it included some slides in here to give you a good Overview. If you need, you know, a refresher on kind of what audit is or how we audit, there's slides in here. I'm not going to go through all of those, but just kind of highlight some of them. Again, the audit process is we're looking at the internal controls related to making sure the information is correctly reported in your financial statements. And so we use both what's called basically analytical procedures and testing of those controls.

So that's a test of controls, and then we do substantive procedures, which involves using more other sources to substantiate the information reported in your financial statements.

So I'm not going to go through all of these. Again, this is a lot of information for you kind of you can go back and read as you want to, but again, it kind of goes through those processes again. It's so we do the planning and risk assessment, we're testing those significant internal controls. Again, the focus is, are the amounts, are the controls in place to make sure the amounts and disclosures in your financial statements are materially correct? The big things that had an impact on your risk assessment for FY24 is we continued to have implementation of both your lease and it's called your SPITA, which is subscription-based information technology agreements.

We also, for Bartlett, it was a Medicaid rebasing year. You continue to have COVID funding that's being expended. You continue to have turnover and staffing shortages at all 3 entities. And for school district, we continued to have an audit risk related to budgetary compliance.

As I mentioned, we also do what's called substantive procedures. Again, these are really looking at are the amounts correct and supported, not necessarily focused on controls, but more of the amounts and the disclosures. So this goes through— these slides, the green and black ones, are really the significant audit cycles for CBJ. And again, this is information that's provided for you to refer back to at a later date if you want to, related to the different cycles and our audit approach for them. Once we've completed all our procedures, again, we have to conclude.

We have to look at if there are corrected misstatements or uncorrected misstatements, and what is the impact overall on the financial statements as a result of those. So for the FY24 CPJ audit, we issued what's called an unmodified opinion, or opinions rather. That is what you want. You want an unmodified opinion. It basically means that the amounts reported in your financial statements and disclosure financial statements are materially correct.

We do have one material weakness, which I'll go through, um, relates to financial reporting, and one significant deficiency. And we have a couple what's called other internal control matters. These are not considered findings but are more opportunities for improvement. Improving controls. And I mentioned already the state and federal grants will be issued later this month.

So looking at the independent auditor's report, I've included a few paragraphs of the report here. And as you can see, the first paragraph, we have audited the financial statements and it goes through. And so it's basically letting you— defining for you again the the major funds, the business-type activities, governmental activities. And this is the paragraph that is the one that matters. In our opinion, the company financial statements present fairly in all material respects the respective financial position of, and then again it goes through our opinion units, in accordance with generally accepted accounting principles.

So we talked already on this. It's just another way to present it of what is considered the basic financial statements and what we're issuing our opinion over. We also have included, or included in our opinion letter, is the basis of our opinion. So we have to follow what's called generally accepted auditing standards as well as governmental auditing standards. So those are what we as your auditors have to follow to make sure that we're complying with our industry standards.

We have several safeguards in place, several reviews that our work goes through internally before we conclude and issue our opinion and make sure that we have the documentation necessarily to support our opinion. So the financial statements themselves, while we assisted, especially this year was a change where we assisted with putting the financial statements together, and that change makes, again, it's called a risk of self-review. So we had to make sure that we had safeguards in place. So we had people outside the audit team that worked on the financial statement preparation, and then we also have another partner not involved in CBJ audit review both our workpapers as well as the financial statement preparation to ensure that we have not crossed over into being not independent from you. But really, those financial statements are the responsibility of management, and they're also responsible for putting internal controls together to make sure that information in the financial statements is accurate and correct.

And so they have to also, as that final paragraph talks about, look at if there's a substantial doubt of the ability to continue as a going concern. So that's an accounting term. And, you know, for a city, it might not be considered high risk, but it is a required part of our reports to make sure to let you know that that is something that management has to do. So one of the other parts of your ACFR is called the MD&A, and there's also a trans— management discussion analysis is the MD&A, and there's also a transmittal letter. Again, those are communication from management to the readers of the financial statements, that being you as well as the general public that use your ACFR.

And again, I'd recommend reading those. A lot of the management discussion analysis does provide a nice overview of what happened during the year and some key statistical information. So again, lots of information in our audit report. It goes through all our responsibilities as your auditors. There's bullet points again of kind of some of the key issues that we have to comply with as you're doing our audits in accordance with generally accepted auditing standards.

I mentioned already we issue— don't issue an opinion over the required supplement information. So the green highlighting here is that wording related to that, but it does describe kind of the general information or the general procedures that we do over that information. And this is a list of that required supplemental information.

Have supplement information. So we do provide a limited or a, in relation to opinion. So again, the combining individual fund statements and schedules are fairly stated in all mature respects in relation to the basic financial statements. So that's again what's called the in relation to opinion. And then we have to let you know that there's other information included in your ACFR, this being the T letter and introductory statistical sections basically that we don't issue an opinion over as well.

So again, just another illustration of that same information. So I'm going to pause there. That's a, a quick overview of the audit report. Basically our audit report for all three entities, our industry standards dictate kind of what's included and actually the exact wording that has to be included in different situations. So for each entity, our audit report almost follows the exact same thing, because for all 3 entities we had what's called unmodified opinions over financial statements.

So I was going to talk about Bartlett and School District and then loop back to the City. So for Bartlett, for FY24, again, we had unmodified opinion over financial statements. We did have one significant deficiency. Again, a significant deficiency is a control weakness that could lead to, lead possibly to something being material. Mistated, and it related to the accounting for the government— governmental merger that was basically the bringing in of Wildflower Court into Bartlett's operations.

And there was, I think, due to turnover and staffing at Bartlett, there were— there were some parts of the accounting and reporting for that transaction that had not been done when we came in to do our audit and, and assist with financial statement preparation, and there weren't controls in place to make sure that that work had been done. And we did do a detailed presentation to the Bartlett Finance Committee.

There was a prior finding with Bartlett. One of the things we do is report back to you the status of any prior findings, and this one related to the implementation of a new standard that one was significantly resolved. We had another control matter this year, again related to leases. Basically, Bartlett's elected to not make certain adjustments during the year for their leases, and they're, and they're only making those adjustments at the end of the year as part of the financial statement process. They're not keeping those adjustments in their records.

I shared with Millwood Mayor Weldon, as I talked to her earlier today, kind of went into this in detail with her, but really it doesn't change the bottom line. There's a very insignificant amount. It's just how amounts get reported in the financial statements. And so Bartlett made the election, you know, not to, to account for those in their accounting system, but we do recommend that they review their policies and procedures and just make sure that the information is captured correctly, even if it's not in their accounting system, that at year-end that information can be compiled and provided to the auditors or the financial statement preparers.

And the other item related to— it's a very small thing— was the inventory count. We had some errors, human errors, related to inventory counting and testing selections. And so again, we're recommending that those controls be looked at. To ensure that the correct information is put into the inventory and valued correctly.

And our last item was carryover from prior years. Again, this somewhat stems from past activity, not so much maybe for FY24, that there used to be some significant delays between when Treasury would get certain information related to the cash accounts over to Bartlett. And so In the past, we had talked to Bartlett about really working with the city. Like, did it, did it make sense from a timing standpoint for Bartlett to take it over? We weren't really recommending one way or another.

We just wanted the Bartlett management and CBJ management to work together to determine what the best thing was going forward.

And one more, the self-pay collection process. Again, we noticed there were some lags in collection. And so basically want to make sure that the hospital's evaluating its self-pay practices and policies to make sure that collection, increasing collection at time of discharge.

And moving to the school district, school district again, Good thing it had an unmodified opinion on its financial statements as well as its federal and state programs. It did have 2 significant deficiencies, or sorry, it had 1 state finding and 1 financial statement finding. We did meet with management as well as did presentation to the school board. And so the finding related for '24 a little bit of a repeat of what we'd seen in '25, but actually a lot of improvement. So, you know, we didn't have— we didn't see the non-compliance with the CBJ spending authority that we had seen in the previous year.

But what we did see is with the turnover that had occurred at the school district, the controls weren't designed or implemented to ensure that all of the school board policies related to the budget were being followed, and that we saw that there were errors that had happened throughout the budgeting process. Again, we have to look at the whole fiscal year, so a lot of changes happened during the fiscal year as far as the people being involved with the budget. And so again, this is over the course of the year, um, you know, changes didn't always get documented in such a way that the approval was apparent. We noticed that there were discrepancies in the amounts reported to DEED from the approved budget. And again, a lot of this had to do with turnover and documentation wasn't available to see what had happened under previous personnel.

We also, in the Pupil Transportation Program, had one report that was not filed that was required to be filed. When, when school district contacted the state, the state was not aware that it hadn't been filed either. But again, our compliance requirement is to look at whether it had been filed or not, and it had not been filed. So that's what this finding related to.

And again, that one was related to turnover as well. Just, it kind of fell through the cracks when, when you had turnover happen at the school district level. This was the prior finding related to a new accounting standards. We feel like that deficiency had been resolved for FY24. We do recommend that additional policy and procedure documentation be developed.

And this was the prior finding, as I mentioned, related to compliance with the overall spending authority for CBJ as well as some of the board policies again related to the budget. So it was partially resolved for '24. And then in the prior year, we also had a finding related to the Medicaid billing. This really wasn't an issue in '24 as the school district was spending time implementing a new system and getting third-party biller up to speed. And so there really was not activity related to this in FY '24.

This is really small print, and I apologize for that. You can go back and read it in detail later if you want to. These were just a bullet point list with the turnover at school district. We felt like it was important to capture these issues for the school board so that as they filled the Director of Admin Services position split into a CFO and COO position. And so as that CFO position is filled and is now filled, I'm happy to report as you probably know, then these were some issues that the school district— we had talked to the school district management about working on.

And these are two of them as well. These are considered other internal control matters. So Raleigh has quite a few old outstanding AR amounts that needed to— need to be followed up on. We also had E-Rate report. This becomes a— it's a revenue recognition.

It's the timing of when you can recognize revenue. When we got the books for audit, basically the amount that was reported was over what it should be, and so we had an adjustment related to that. We just recommend that the filing be monitored and the timing of when the reports are filed impacts when you get to report the revenue.

Venue. So one of the documents you have in your packet tonight is the letter to the board. My very colorful slide here shows the different parts to this. I'm just going to highlight a few things for you. Again, the letter to the board, or assembly rather, is required communication we auditors have to make to you.

And so we have to let you know if there's been significant accounting policy change. And this year there was a new accounting standard. It was number 100, GASB GASB Statement Number 100. It's called Accounting Changes and Error Corrections. And as a result of this, I have listed below here some things that had to be reported under GASB 100.

These would have been reported under the old standard as well, but again, these were reported under GASB Number 100. I went through these, I've gone through these with management as well as Mayor Weldon. Because of the large dollar amounts, I'm going to touch on 2 of them quickly. The first one, the $1.8 million, which is the school district— this isn't a change to school district amounts, it is a change in how it's reported. The school district amounts are reported in the city's ACFR.

So unfortunately, we haven't identified $1.8 million for the school district. It is just a change in how the numbers are reported in the city's ACFR. And what You will see going forward as a result of this correction is that the school district numbers will now agree when you look at the audited separate audited financial statements to what's in the Act for, um, they will be in agreement now. And that was just a change. We have to call it an error correction, but it was a change in understanding of how to implement the allocation of your internal service funds.

The other large amount is the $1.2 million, which was related to moving a fund. So it's called a change in accounting entity. There was a fund, it was the library endowment fund is what it's called. It was previously accounted for as a fiduciary fund and is through management looking at it this year, or CBJ Finance looking at this year, they determined it would be more accurately reported as a special revenue fund. So we're basically moving it from one fund type to another.

Sorry, getting my— I have a 3-hour time difference down here, so I apologize. I'm probably a little bit tired. So, okay, why is this not Well, I also have some internet issues sometimes, so I apologize that I'm having a little bit of— we are hearing you all right. You can hear me okay though? Yes.

Okay, I'm just having like delays on be— Miss, trying to change the slide. So, um, and go ahead, if you wanted, we could have, um, Miss Windle share her screen if you think that would be better for you.

It might be because— oh, there we go. Well, yeah, it does look like it's stopping, uh, or not responding, so I'm going to stop sharing And if we wanted to go ahead and pull up the screen, and I know you guys have a long agenda, so I will work on going through the rest of it pretty fast. Just getting to the good stuff. So we're— Yeah. So if we could go back a slide just to make sure I know where we're at.

I think we're— Okay, perfect. So then that next slide. Is, so again, these are significant estimates. These are the same ones that you've had in the past as well. Our responsibility is to make sure that management is— we look at how management's developing these estimates.

So, as you can see, these are the different ones included, and we'll go to the next slide.

So we also have to include in our letter the corrected and uncorrected misstatements. So I mentioned, and we will talk about a little bit more, we have a material misstatement related to financial reporting, but it's really related to specific accounts. And so these material adjustments that we proposed and corrected that are bullet pointed here are essentially directly related to that significant deficiency. So one of the questions that came up kind of in, in working with management and sharing, you know, our conclusions was, you know, the question came up, how is this different from last year's finding? So last year's finding was very broad in its nature, and it related to kind of the overall preparedness, lack of preparedness for the audit, that the delays, the reconciliations weren't done, where this, this one's very focused on these specific corrections that were proposed as a result of the audit.

And This year, I think, you know, I, I want to make sure no one likes findings. I know that, but there was vast improvement in understanding from last year. This year, your staff have another year of experience under their belts. You know, you had all brand new staff come into your finance department, and I want to make sure to have a shout out for Angie and Joey and Sally, as well as people over in Treasury, you know, Ruth, Ruth and, and her team because they all pulled together and they really took on both finance and treasury activities this last year and did a lot of internal training. They made a lot of changes.

And so I feel like FY24 really was a year of transition where everyone had to kind of go back, figure out how things had been done, pick it up again, look at it and go, well, how should we be doing it? And then develop new possibly work papers or ways of documenting kind of what the balances were. And so some of these adjustments that we had here are really a kind of a result of timing in some aspects in that as they were working through areas, we were also trying to audit some of the areas. And so You know, maybe at some point, uh, something had been right, but then someone else changed something else and it didn't get corrected. So again, I don't feel like these are going to continue into FY25.

Working with both Treasury and Finance for everything where we had a proposed adjustment, there was already action being taken to make sure that corrective action was in place and documentation was being pulled together for next year for FY25. So we did have, um, what we call a past adjustment. That's that bottom one, the items detected not corrected. This relates to one of our compliance findings, which, um, is still in draft form since we haven't actually issued that report yet. But what it relates to is the fact that, um, when you had costs related to certain projects, airport projects, there's allocation of the cost between the, the FAA funding and your match, and more the allocation got set up incorrectly.

And so what happened is about $300,000 didn't get charged to the grant funding, the FAA funding that could have been or should have been. And so as a result of that, There could have been an adjustment at FY, for FY24, but working with management, they elected to not make it because those corrections can be made in FY25. Those grants are all still going. And with CIP projects specifically, a lot of times costs are kind of moved around as funding sources change. So while, while we did identify that that correction was there, we didn't feel like materially it misstated your financial statements by electing management's election to move it to the next year or correct it in the next year.

And we can go to the next slide.

So I've touched on this already. This is this year's finding. If you go to the— and we don't need to actually go to there, but if you want to look at, at your leisure, the, I called the government auditing standards letter. It goes through this in detail, this finding in detail. And as I mentioned, this is basically related to timely and accurate reconciliation of specific accounts.

So much more narrow in scope. A lot of this, the reason it rose to a material weakness rather than a significant deficiency is because we have to evaluate if we had not done our audit procedures, would these have been detected or would, would your ACFR have had these misstatements? And so we had, we concluded that without our involvement and our recommended changes, these specific accounts would have been misstated.

We can go to the next slide.

And this second finding here relates to the presentation of lease and SPIDAs. We hear about those a lot. A couple years ago we talked about the implementation of them. What happened this year is just the presentation, the, the controls over the presentation weren't designed and implemented ensure— so during the year, these payments are just posted into the function as they're budgeted, but for financial reporting, they are both the principal and interest portion of these lease and SBITA payments are supposed to be shown as debt in the debt service function. So it really is a reporting change that needed to happen.

And again, with all the turnover, as I mentioned, this is just one of the things that, that didn't get addressed yet, but we know that for FY25 it will be. And So again, our recommendation is just policy and procedures be developed and ensuring that, you know, the presentation at year-end is adjusted to be in accordance with generally accepted accounting standards.

We'll go to the next one.

So these are the last years. So as we mentioned, last year was kind of a broader finding for the finding number 1, we felt that was partially resolved. We just repeated it with basically the specific accounts. The second one related to the implementation of the new standard, that was the SPITA standard, that's considered resolved, as is number 3, which was, um, Bartlett had, um, some, uh, finding related to compliance. And then same thing with, um, finding number 4, which we had a non-major program where we found that a report had been incorrectly filed, and so we didn't have an instance of that in this year.

So that is resolved. And the next slide.

And this is again another internal control matter. So what this means is that it's just a, like, a suggestion recommendation for operational improvement and related This is specifically that there's a late lease database that is maintained by the city, and we noticed that at, at year end there was some additional cleanup that could have been done of it. And then again, the raw data was provided to us and we had to spend quite a bit of time kind of compiling the information needed for financial statements and disclosures. We just recommend that that compilation of data be done by CBJ staff so that they can ensure that they have done the necessary reconciliations and all the updates have occurred within the database. And we can go to the next slide.

Um, this is again another internal control matter, um, and this is a, a repeat of next year— or last year, rather, sorry— that we just continue to recommend, um, additional training, development of accounting policies and procedures.

There is a new accounting standard, and that is a lot of why this is in here, called Statement Number 101, Compensated Absences. And this will require some dedicated time and resources to make sure that it's ready to be implemented for year-end reporting. And so wanted to make sure we highlighted that and let you know that that is coming. But again, I, I do want to make sure you understand how much work the finance department and Treasury put in this last year. And while you did have the findings we reported, we saw remarkable improvements in the documentation and understanding as far as putting your ACFR together and doing your year-end close.

Next slide.

So that concludes the PowerPoints. As I mentioned, the actual reports are in your packet. The ACFFR, which is your whole audited financial statement, is provided along with our opinion letter. I believe you've already received a copy of that from Finance. So again, I want to make sure to thank both Finance, and Treasury of CBJ, as well as Bartlett School District.

Um, everyone we work with is always very professional and, um, really honestly take their jobs very seriously. And we did have delays in this year's audit, but, um, everyone was working hard to make sure that the information was as accurate as possible. We appreciate that. And also, we're happy to meet with members of the assembly and discuss if there are question— further questions with our audit. Um, but I'm happy to take any questions now as well.

Thank you, Miss Tarver. Um, any questions for Miss Tarver or staff?

Or Miss Hughes-Candies? Thanks, Madam Chair. Thanks, Miss Tarver. This is great. I mean, it's not great, but I appreciate the work.

Um, I, I just wanted to clarify because with fiscal years and, and make sure I'm tracking correctly, the Juneau School District, the budgetary compliance there you referenced, and I should jump back to this slide, but I guess you talked about turnover and I'm trying to make sure that I have this placed correctly in my mind. This was seeing, uh, some issues with compliance to school board policies related to the budget. That is post the Lisa— whoever the finance director was leaving. That's a question for you, uh, Miss Fleck. Do you have her name?

Lisa Pierce. Lisa Pierce is the consultant that came in after Cassie Olin, um, left, and I believe that happened in the middle of FY24. Of FY24. And that was the period that you were auditing, correct? That is correct.

Okay, thanks.

Okay, uh, Miss Flick, if there aren't other questions, I— if I may say a few words. First, I'd like to introduce our controller. This is Joey DeLuca. We were fortunate enough to hire him in Treasury as our revenue officer.

It didn't take a lot of convincing for him to move from Florida to Juneau, but we're happy that he is making Juneau his home. And last summer, we were excited to promote him to the controller position. He's a fantastic accountant, has a lot of experience. In the private sector. And so this has been a fantastic learning year for him, understanding how government is just wildly different than the private sector.

But to address a couple of things that Ms. Tarver said, we are fully staffed finally in the accounting group, which is amazing. If we can make it till, I think, July 14th, we will have been fully staffed for a year. Staff has been, I think in general morale has been a lot better. Brand new staff, 100% yes. And so in the, over the past few months we have been educating.

I'm so proud of the team for just jumping in and figuring it out. We had a lot of backlog that we needed to work through in closing out FY24. That's part of the reason why things were delayed. When you're doing something for the first time, it's always going to take a little bit longer. I am really happy to report that, I guess, on the bad side, the last 2 years we've issued our financial statements on March 31st.

This year we were able to issue them on February 14th. That's 45 days cut from our 100— 180-day lapse. I've challenged the team. I would love to have a Christmas present of audited financial statements published for December 2025, and I think they can do it. They have really embraced what's going on.

I think documentation has improved. We already have on the books starting in April to have weekly training sessions on various topics that will include people in the accounting team, but also in Treasury and accounts payable and purchasing as the topics allow. So I think, um, it, it was a very, um, interesting year closing out FY24. Um, one of the major changes when we had such, um, high turnover, we contracted with LG Rayfield, as Ms. Tarver said, um, different folks than do our audit, but to help us prepare our financial statements. We just didn't have the resources or the experience to do that.

Through that process of providing them raw data out of our financial system, we found a lot of things that we needed to correct that had been done in spreadsheets before but never made it into the system. And so a lot of work was done to bring the system up to date, to make it current. And I think those actions, along with training, and as staff is embracing their roles, it really.

I'm kind of excited about the next audit. I know I shouldn't be excited about an audit, but I think it's going to be fantastic. We've got a great group of people and looking forward to see another leap in improvement.

Thank you, Ms. Flick. I appreciate that, and I appreciate, um, uh, you for putting in the work to get us to this place. And Mr. Tarver, thank you for all of your work and for being here tonight. With that, we will keep rolling on this agenda.

There's more.

That brings us to— we have a riveting agenda tonight. This brings us to Export Manufacturing Exemptions. Ms. Flick. Thank you, Ms. Wohl. Sorry, it is riveting this evening.

So this starts on page 161 in your packet. Annually, as a body, you're asked to approve the export manufacturing exemptions. The assessor provides this documentation for you, and it is, it is a process that comes before you. We need to make sure that you're okay with these exemptions. I, looking at the packet from this year to last year, I don't see anything significant changing between the two years.

So we would be looking for action for you to approve, um, these exemptions.

Any questions?

Miss Hall? Yes, I'm just, uh, being brand new to this. Who is eligible for this? And, you know, should there be a whole lot more people on this list? If, you know, like how widely uptake or— yeah.

Ms. Hall, that's a fantastic question. The code is cited in here and I would have to pull up and read the code, all of the details. Um, I believe that, uh, the businesses that are eligible for this take advantage of it. Um, I think they're in the know if they're eligible for it.

Miss Hughes-Candies. Oh, if I could just add one thing, because I, I had same question the first time I saw this, and I would say that Mr. Larson at, uh, Alaska Brewing, as just a Citizen does a really nice job of letting other businesses know if they're eligible to when they come up. So I think this is probably everyone.

Um, what's someone— Mr. Smith, the motion? Yeah, of course, Madam Chair. Um, I move that the assembly— well, the Finance Committee move to the full assembly for approval, or just approve Do we just approve them? I believe that the Finance Committee just approves them. Okay, great.

I move that the Assembly Finance Committee approve these manufacturing property exemption requests as presented and ask for unanimous consent. Any objections? Seeing none, that is so moved. We will move on to topics and priorities for AFC discussion. Um, this memo came up as a result of Ms. Flick and I's conversation about, um, our finance meeting calendar and our budget calendar, just recognizing that we had a lot of good discussion at the retreat about some priorities.

For the assembly when it came to finance. And it seemed, at least to my eyes as I was putting together a calendar, unlikely that we would be able to kind of tackle all of these before, before we approve a budget. Some of these don't need to be before budget, but I didn't feel comfortable kind of deciding what to fill our meetings with without getting a chance to hear from you all about what were priorities. Um, and just recognizing we have kind of reorganized our budget calendar last year to get some Wednesdays off, and I definitely didn't want to fill those back up unless you all really felt strongly that we needed to tackle all of these. So I think I'll see if Ms. Flick has anything to add, but otherwise, definitely we can ask some questions about what's there, and then maybe we can do a little round robin about how which things feel urgent to folks, given that we've got a budget to pass and deadlines to put things on ballots.

Ms. Flick, anything I missed? No, I think you did a great, great job, Chair Wall. We tried to, um, In working through this memo, I'll give you the big bullet point names so we could— you could ask questions, you could talk about them. Also included in your packet for tonight on the last page is the budget discussion calendar, so you can see the Wednesday nights that are— we're calling skip. We're not—.

Because we're putting in a full day Saturday, gives us a couple Wednesdays in the calendar we can skip. You'll also notice For instance, on April 16th, we have a discussion about Assembly grants and community requests, but then we've got reserved for additional discussion. So we know that there are budget topics that are gonna require additional discussion, but in what we're aware of, we think that you also have some space to tackle some of the things that you find out as goals.

So I'll start with questions. Um, any questions from assembly members about this memo or about any of these, the status of any of these topics right now?

Mr. Smith. Madam Chair, um, on the assembly goal regarding exemptions, I see and completely makes sense with to me about, you know, property tax exemptions, you know, don't go into effect until, or, you know, wouldn't be impactful until January 1st of next year and then not affecting the budget until FY27. What about sales tax exemptions and possible changes to them? Like, when, when makes sense if we were to make changes to sales tax exemptions? Would January 1st be the right time for those changes to go into effect?

Through the chair, Mr. Smith, as I understand sales tax exemptions, those are part of your code, so they would follow a normal ordinance process. And questions you would need to consider is how much public participation do you want in any of those, those decisions. And then depending on what the, the change that you're considering is What's the impact to perhaps the merchants that are involved, and does there need to be a lead time for them to adapt to a change that might be coming through? Thank you.

Other questions?

Mr. Smith. Thank you, Madam Chair. On the sales tax piece, I guess I have also heard of just certain practices that it might not be an exemption, but for instance, vessels that collect sales tax and then may or may not leave the borough when we only collect a prorated amount, or actually maybe we just round it to 50% or something. Would we, if we decided to look at sales tax exemption, Could we— would you be able to inform us of, of those type of, I guess, foregone revenue type of items?

Through the chair, um, Mr. Smith, we would be able to, uh, certainly work with staff to understand what our code, um, actually prescribes as far as things like vessels leaving the borough and how we're seeing that, or how we understand merchants are putting that into action. So those are absolutely conversations that we could include at any time when you're ready. I'll ask a question. We talked some at the retreat about seasonal sales tax, which I think is, you know, part of this visitor activity revenue conversation, which, you know, You know, could be broad.

I was on the assembly when we talked about this. It was, we were talking about exempting food from sales tax. It kind of dovetailed with the seasonal sales tax conversation. I remember it being a good amount of work for staff to kind of, assembly had questions, staff went back and calculated some things to us, brought back information.

Maybe for that particular conversation around seasonal sales tax, what kind of staff time and work would you expect that topic to take?

That's a great question, Chair Wool. It depends on what you're asking for. So there's certainly some research and some calculations were done, I think, back in 2021, 2022-ish. We could certainly revisit those and apply current data to those. It really— it's hard to answer.

I guess we would need to know what the body wants to consider so that we could do the kind of research and put together packages and presentation in the ways that you would want to think about it. So it's It's not zero, but we know that if we— if there's a decision to want to change the sales tax in that way, it requires voter approval. And so we really would have to tackle that kind of in the same frame as we've talked about with bonds. And so, like, through the budget cycle would be an important time to have that. You wouldn't see the impact of any of those changes, though, until after a voter, if it passed voter approval, and then whatever implementation timeframe you may want to put on those changes.

So timely for the budget, it would take some work. We've got staff that can help pull together data for that.

Mayor Weldon.

Mayor Weldon, I realized Mr. Bryson had his hand before you. I'll ask him. Okay, go ahead, Mr. Bryson. Sorry, I forgot you.

Thank you, Madam Chair. Um, I was going to ask the very question, uh, wouldn't seasonal sales tax have to go in front of the voters? Um, we've talked about almost every one of these topics We've talked about trying to remove sales tax from food. We've tried to talk about sales tax in terms of the definition of SNAP. We have absolutely looked at sales tax before, and it was proven to be so complicated that we didn't continue looking at sales tax because, I mean, these same questions came in front of this dais, and they were so complex that there weren't clear answers in front of it.

Are we really asking to go and repeat that same activity or that, that we did? It was just a few years ago when we looked at seeing if we could remove sales tax from food. I mean, every single one of the things that you guys have said was said at that time, or all those questions, the same thing. This is just a repeat of it. Um, is that really what we're going to look, trying to figure out how to exempt Sales tax from food.

I mean, that was the most logical, easiest lift, and it ended up being really complex and complicated. That's why we didn't do it.

I don't know that any new information has come along that would make those changes or that discussion easier or provide an outcome that's different than what stopped us in our tracks before. I'll stop there. Thank you, Madam Chair.

Mayor Weldon. Thank you, Madam Chair. Um, what I would be concerned about with the seasonal sales tax at this time— I think, um, one of our temporary sales tax is coming up either this election or next, and we certainly don't want, um, that to be voted in and then one of our temporary sales tax not be voted in. So I'd have to ask staff when the next sales tax is on the ballot.

Through the chair, um, I think I left myself hints in the memo. Give me just a second here. And on June 30th, 2027, The 3% temporary sales tax expires, and the 1% that typically goes to capital projects would expire on September 30th, 2028.

So the— it would— the 3% would be on the 2026 ballot? That is correct.

That's the latest it could be on there. Yes.

Um, other questions? Mr. Smith. Thank you, Madam Chair. Regarding that, I, I guess we could phrase a ballot question where People are— if they're voting on a seasonal sales tax, they could vote to— I mean, it could be like if they vote for this seasonal sales tax structure or something that we no longer have a temporary 3% sales tax. Or I mean, is there a way to— a way to do those together so it's less complicated.

We're not trying to structure something out that we'll never be able to catch a tail on. Um, through the chair and to Mr. Smith's question, um, yes, one thing, um, for the body to consider if you're going to look at sales tax in general: do you want to continue to have a temporary tax, a 3% temporary tax that we use operationally, going back to the voters every 5 years, you could structure a ballot initiative that— just kind of going off the cuff here, so excuse me—. And law would have to weigh in. Let me just say that very loud and clear. But you could structure a ballot question that says, you know, hey, we're— what we would like to do is instead of doing this 1% permanent, 3% temporary, 1% temporary, we want to do an X percent permanent that goes from April 1st to September 30th and a different percent from October 1st.

So you have a kind of a winter and a summer. It falls with the quarterly reporting. And if approved, it would take effect in this kind of a timing. So whether you end the temporary sales tax early because you want to implement the other model sooner or whether you want to extend as part of that initiative, extend the temporary 3% through to the end of September so a new structure would start in October. I'm certain that we could come up with something that wouldn't be totally hard to explain but could care for combining, you know, a seasonal sales tax with maybe a more permanent type revenue source, if I understood your question correctly.

Thank you. Mr. Kelly. Thank you. Just to follow up on that. So would it be, I think most ballot questions you structure it as a yes or no.

So if we did something like that, would it be like you have this option, this option, or no option? Okay. I can follow up offline. About—. I don't need to get in the weeds.

Definitely would want to get law involved, but I think we would have to end up with a, here's the structure, vote yes or no.

All right, are we ready to move into comments? I'll just, I think, take volunteers to whoever is feeling passionately about their priorities. Before we approve a budget, kind of let's say the next 4, 4 months. I saw Mr. Bryson's hand first, I believe.

Chair, could you repeat what your expectation of our comments would be? Yes, I'm hoping we can— folks can express of some of these big meaty finance issues, which are their priorities in the short term. Um, we— all of these are on our goal list for the year. I think it's possible we can touch all of them in some way or another, but having a sense of what needs to happen before budget and then election is helpful. And if you are not ready to go first, that's okay.

Okay, go ahead, Mr. Bryson. There is not even close to enough money for all of the demands and needs and the asks that we have had. This is the largest disparity I've seen ever. I don't feel like I've walked into a finance budget season with a significant ask and a project like a Hesco barrier. Like, we've got so many anomalies right now.

This, I feel, is going to be one of our toughest budget sessions that we go through, I would not pick this budget session to try and reinvent things. This would be the one that I would try to get us through this year because it's going to be.

Tough. We have methodically and very responsibly stepped down the mill rate 4 years in a row, nice small incremental steps.

I would like for us to take the same approach to this year's budget and instead of making— because it's just got more demands and more asks, and if we take it try to take it like bite-sized chunks and not get scared at the giant ass and think of— I wish I could give you more specifics, Madam Chair, but I'm looking at like what the expectations of the city is going to be versus what our expectations of how we're going to look at the mill rate. That I see is going to be our biggest challenge of this budget cycle, so that's where I'd like to focus my energy on. Mr. President, that's really helpful. I have Ms. Yuskandis and then Ms. Atkinson. Thanks, Madam Chair, and thank you for bringing this question to us.

This is good, thoughtful questions, and I appreciate you looking for guidance on the scheduling and thinking about the scheduling so diligently. I think for myself, when I look at this list, obviously we prioritized all of these and we always have too many things and not enough time. The two that are standouts for me are the visitor activity revenue and the exemptions, credits, and other foregone revenue. And I think that, you know, Mr. Bryson's comments, you know, actually feather in nicely with why those are priorities for me. I think we have increasing asks, and so we need to be looking at other revenue sources.

Um, if I had to pick a priority out of those two, it would probably be the visitor activity revenue, but I think they're both important. I'll keep it to just two even though there's three. Miss Atkinson. Thank you, Madam Chair. I'm in a very similar place as Miss Huskandies.

I hear what Mr. Bryson is saying, particularly about something like a seasonal sales tax, which is a very— will be a huge lift and will require a long public outreach process that I just don't see us having in this budget cycle. But I do think that based on what we've heard from the community, not only do we have revenue issues, but making tourism in particular work for our community has been a priority of Juneau for a while, and it's really become clear in this last year. So I think we have sort of a community responsiveness need to take a closer look at that.

Mr. Kelly. Thank you. And I think I feel in a similar position to Ms. Atkinson and Ms. Hughes-Scandies.

I actually— one of the benefits of attending Southeast Conference this last couple weeks ago was I heard an assembly member from Sitka actually speak about the seasonal sales tax they have there, and I kind of took some of the concerns that were raised during our retreat, especially, you know, with it being around the construction season, and they actually have a construction exception. I think might be helpful to model ours around. So I was hoping that we'd have a little bit of a chance to, uh, to possibly dig into, uh, the seasonal sales tax. I also had an idea following Mr. Duncan's presentation about kind of looking forward with Eagle Crest and how we might be able to tie that into some of our other priorities. So I would like to maybe spend a little bit of time on that if possible.

I recognize that we might not have enough time to really get into the seasonal sales tax too heavily, but I think we should at least start the conversation.

Mr. Smith. Thank you, Madam Chair. I guess for me, um, I see possibly, you know, sales tax exemptions being something that we look at, you know, just realizing that all of these things will have long tails to, you know, do. And if it requires a vote and then when it implements due to, you know, being reasonable about getting businesses or whoever is paying the tax to set up their systems. So to me, that's one I'm interested in.

Does it have to be during the budget season? Maybe that one can wait, I guess. But for me, I guess a seasonal sales tax is something I'd like to look at in time for this year's budget, or excuse me, in time for this year's ballot. Echo Ms. Adkisson's statements about how can we help How can we make tourism work for our community a bit better? We get more revenue from sales tax, we can, you know, that can help us lower the property, that can help us lower the mill rate.

I mean, it, to me, that seems like something we can do to really benefit our community. I just don't want to keep waiting on it. I think it will, as I mentioned, either treat— I also think people feel like, you know, tourism is benefiting them more directly, maybe that lowers a little bit of the tension in the, in the, you know, in the conflict on our— in the community. So I would like to work on that one, you know, does that be during the budget cycle? I can look to guidance for that from, from staff, but definitely before, you know, the ballot.

Miss Hall. Yeah, like, um, my fellow assembly members, um, agreeing that we probably need to focus on revenue as a priority. So the visitor activity revenue, and then I agree the sales tax discussion might be better had when it's naturally going to come up with the expirations. And then a second priority would be the looking at Goal 3E, the exemption credits and foregone revenue, and And then, you know, the bond initiatives, and, uh, but also being mindful of trying to keep that utility rate hike, uh, you know, do everything we can to take care of our utilities but without too big of a blow to our already burdened citizens. So back to the, the foregone revenue, you know, are we in the exemptions, you know, looking at folks that can't afford to pay that maybe are being exempt for, you know, certain things.

We might want to take a look at that. So that's my two cents worth. Uh, Mr. Steininger and then Mayor Weldon. Um, I guess the drawback of going second to last is I'm not adding a whole lot from what others have already said. Um, But I do want to add in that I am interested in talking about Gold Street, the visitor activity revenue.

Um, you know, just to second what Miss Atkinson said, I've heard a lot from the community of, you know, what are we getting from tourism and what are we getting from tourism activity. And I think that it's kind of incumbent on us as a body to explore how we best capitalize on that resource because otherwise we'll kind of see continued, you know, animosity amongst the public towards, you know, what is the shining star of Juneau's economy right now. And I think having that conversation about, about visitor activity revenue, making sure we're doing it in a way that doesn't hurt that industry but helps our community. And I think there's a lot that we can do within that. But, you know, to the concerns of Mr. Bryson, you know, I'm new, I haven't gone through those lumps, so maybe I am blindly charging into, you know, difficult conversations that's been had multiple times over and over again.

But I think we do have a lot of people on this body now that weren't there for the last time, and maybe new perspectives and new kind of ideas of how to approach it might be here, and we might have a new willingness to have that conversation in a different way. Hopefully it's not just rehashing what was discussed 4 years ago.

Mayor Weldon.

Thank you, Madam Chair. Just a couple thoughts. We're already dealing with Eagle Crest, whether we want to or not, so I don't think that's a big deal. And then the biennial budget, I think, like Mr. Bryson said, I don't think we need to start anything new there, so just keep that. I'd be interested in looking at the Sales tax exemptions.

I can hear the audience about the visitor activity revenue, but I'll save all my arguments against the C tax for another day.

Okay.

I have not. Do you mind if I go first? Thank you.

Um, I am feeling— I mean, what I did not hear is discussion of bonds. I would say, well, except for Miss Hall. Um, my opinion is that— or utilities, I My opinion would be that we cannot tackle seasonal sales tax, two bond initiatives, and a conversation about Eagle Crest and utilities before we have to put some things on a ballot. Um, and so, you know, I definitely am in agreement with you, or many of you, that looking at visitor activity revenue is a priority, but I think if we're going to go down that road, I would hope that we would drop some of these other things that we're thinking about for a ballot initiative. I will also think that I know you— I think the utility conversation is going to be intense also.

I think we do need to do something this year. What exactly that is, we all might have different ideas, but I would hope that we wouldn't just punt that conversation down the road because that will just make it more and more expensive. So I'll stop there and then it would be great to hear some more reflections now that we've heard from everyone. I saw Mr. Kelly and I saw Ms. Hughes-Scandies. Uh, thank you.

I, um, actually, you sparked an additional comment because I, I was— when I was speaking of the seasonal sales tax, I was actually also thinking that, as you know, there, there were some discussion or some sort of comments I think we got from the public that, um, you know, possibly a seasonal sales tax could help with utility rates. And so that's a part of my thinking into— to coin Miss Atkinson's phrase, you know, how we can make tourism work for us. I did have another thought also around possibly saving some time since there does seem to be a lot of interest in discussing revisiting the sales tax, and, and it is conversation— I guess they are conversations we've had before. So I'm wondering if maybe to save time if we could get an idea maybe what meetings those were discussed before, so that way maybe the assembly members like myself who weren't present for those discussions might be able to review that and we don't have to really start at square one. Thank you, Mr. Kelly.

Ms. Yaskendis, then Ms. Atkinson, then Mr. Smith. Thanks, Madam Chair. Thank you for your comments. Yeah, I think, you know, for me, I flagged what was a priority, but what was not said. I absolutely like the fact that we're having this conversation.

There is not time enough to do everything. And so, for instance, that was a deliberate decision on my part to leave bonds off. And, um, I agree, I would not want to try to do two things on one ballot, and I would be more interested in looking at tax on a ballot initiative than I would on a bond proposal.

I think the other thing that I will say is that for utilities The utility rate and its path in its interaction with the assembly and its many committees has been pretty well laid out for us starting with the get-go, starting in Public Works. I believe we've seen it here, maybe we saw it in a CAO, but I feel like staff has done a good job of keeping us abreast of this is where it's at and, um, So in terms of do something, that's a little unclear to me. Obviously, any one of us might have thoughts about what we need to do, but I will say that while these rates are eye-popping for sure, the most expensive thing to do would be to adjust those rates. That's— I shouldn't comment on the issue when we're not looking at it directly, but as we are now with the rates just going into effect. If we don't do something else, I'd be open if someone says, here's a different funding source I think we could do to soften things, but I'm not sure exactly how that fits in.

But I see Madam Manager has her hand raised, so maybe she will tell me. I just want to clarify that if the assembly does not adopt a rate increase, there will be no rate increase. There's no default rate increase. That the last default increase was this year. Okay, right, thank you.

But if we don't take other affirmative action, so, so I, I, that does reflect me dropping other things because the longer I'm here, the less I realize we can do. Thank you, Miss Hughes-Caniz. Miss Atkinson. Thank you, Madam Chair. Um, I think I need to also clarify, I, we are conflating visitor activity revenue solely with the seasonal sales tax, and I think that is the only thing we have so far brought up, but it does not have to be the only thing under that umbrella.

And In fact, I do— I mean, it wasn't clear enough in my first comments. I do not think we have the capacity to look at seasonal sales tax for this ballot. That doesn't seem feasible to me, and I think, especially considering the kind of public outreach we need and the deadline we're looking at for putting that on the ballot, that just seems unreasonable to me. If I had to pick something on the ballot, I do think that we've talked about wastewater bonds to help with those utility hikes, and I do think if I had to pick one thing to put on this ballot, that's absolutely what I would pick. So I want to get in and say that for you.

Mr. Smith. Thank you, Madam Chair. I definitely appreciate this conversation. I know it is kind of tricky to tease out like clear direction when there's so many things in front of us. So I am empathetic to everyone for that.

I guess for me, I mean, I'm like, and if you need me to start making motions, I can give it a shot.

Personally, I guess I didn't necessarily bring up the utility rates and I could have probably gone down the list, but those are actually bonds in my perspective. I think you've heard me rail on this already. Like the utility rates are of concern to me. And I've talked about, you know, advocating for a bond that as a way kind of to patchwork us through till the seasonal or the temporary 1% sales tax, which again, there might be a way to allow for some utility rate increases, but not to the full 10% a year type things that we have are kind of proposed now. So, and then I also had my sense was that we had directed staff previously to go out, look at bond, you know, bond numbers for a 20— I believe a $20 million— $10 or $20 million utility bond, and 3 different numbers for school district bonds.

So I was just kind of taking that that was in progress, um, but if we need more clarity on that, well, I would advocate that we keep looking at that, um.

And I think we can do a seasonal sales tax on this ballot. It's complicated. It's, I mean, it is to get it to kind of like set it up right. But at the end of the day, it's kind of probably going to be a question of, do you support, you know, this percent for these months and this percent for these months? And I don't know, I think it's, I don't think it's such a crazy idea that people couldn't wrap their mind around it.

I mean, I think we, The details are complicated, but I think what we could present to the public would actually be digestible and then they could say what they're gonna say. So yeah, I realize this is a tricky conversation to kind of tease out, but those are a piece. And if we need time to focus, in my opinion, on those bond or those ballot questions, and need to pause on and let staff do some background work on the exemptions until we're ready to say yay or nay for ballot, I can stage that out that way. But anyway, I don't know if that helped, but it did help. And I also— it is tricky, and I didn't mean to seem cranky.

It's not easy just to pick our priorities. I think really what I want to do here is all of us voice where we're at so that I can feel a little bit more confident in kind of choosing the path. And maybe it's bringing in one of you to our, you know, Finance Committee planning meetings, um, to help kind of make some of those decisions, because it is a lot. And I don't want to add— you know, we all want to heavily consider these topics, and I, and I don't want to add more meetings to your, your schedule. So it we're not going to get an answer tonight, and we're not going to agree on some things, but we're at least knowing where each other at.

Mr. Bryson. Thank you, Madam Chair. I wanted to be a little bit more deliberate since my first statement was like way high. Um, uh, I'm okay with the bond for utility. It's not my favorite.

I think we need to preserve our bond capability or our bond.

Available, a room left on our city credit card, because we could have to come up with a match for the North Douglas Crossing. Could be significant. So I'd want, I, I'd want to protect that ability if we had to do a bond like that. Or maybe another important thing, um, I'll say right now, I don't foresee, given— I don't foresee supporting, uh, Eagle Crest for some of the big asks that they've had any more than we've normally. So I probably wouldn't put that as a high priority for me.

Um, and then visitor, uh, seasonal revenue doesn't necessarily have to be tied to a tax. If we had more seasonal activities paying the same rate of tax, if we have more activities funneling into summer tax, because if we do a summer seasonal tax, we just raise the food bill for every family in Juneau.

So I'm okay exploring other ways to increase summer revenue, or to— for the city to capitalize on that. But, you know, that's a great example how the one— the rule of unforeseen consequences— it would raise the food bill for every family in Juneau. And so that's a detail we'd have to consider. I hope that helps finalize. There are some things that I'm like not opposed to everything.

I just know that it's going to be a tricky budget season. Thank you for the time.

Any other comments?

Oh, Mr. Kelly. Thank you. I guess I, I just wanted to add that I think why I would probably want to pursue, uh, seasonal revenue as a higher priority than bonds, um, is that like we, we do keep coming back to people and, and saying, um, can we take out this bond? And people realize that this is adding to, adding to the cost of— we're getting something out of it, but it's also adding to the cost of living. And so if we can explore ways to actually bring in some, some revenue from, from the outside, I think that might help us gain some credibility when we are coming to them and, and asking them for another bond.

So that's why I would prioritize seasonal revenue from seasonal tourists, um, ahead. All right, I think I'm gonna leave this here without A lot of direction yet, but better understanding of where people are at, and we'll try to craft the next conversation to get more towards some decisions on some of these places where we maybe don't, don't agree. Okay.

That brings us to information only. Um, Miss Flick or Miss Wendell, are there things here that you want to call particular attention to for the body? Yes, thank you, Chair Wohl. Um, on number 6, your information only item, there's a couple things I want to call your attention to. One we've already been talking about, which is your budget calendar.

It is the last page in the packet, and, um, Of importance is our next Assembly Finance Committee meeting, which is a Saturday. And I'd like— one of the things I'd like to do is confirm if people are all going to be physically present or if we will have people on Zoom.

Mr. Bryson, still in meeting, I'll shout it out, my question. Um, what was the location again? The, the The location of the Saturday meeting? Yes. Depends on if we have people on Zoom or if we are all going to be physically present.

Um, one question on that. Can— in the past, even if we've all been here, maybe we had boards and commissions that were on Zoom and needed to present. Is that still a challenge that, or maybe that could be accommodated for in the airport? So, um, great question. The airport Alaska room is where we did the, uh, winter retreat, is the other location that we would consider.

It is set up for Zoom, although we wouldn't be using microphones, so it would be a soundbar, so it won't be as good a quality. So if one of the— some of the members is going to be on Zoom, I don't think that's probably the best choice. If we had a presenter who was on Zoom, that probably wouldn't be terrible. I think the voice quality would carry for any residents who wanted to watch. But I think that if we were going to have one of the 9 of you out and participating by Zoom, that we would be better served likely being here.

Than at the airport. And we don't even know if the airport's available. Yeah, I just needed to find out if that's even a possibility. Okay, thank you. Is anyone planning on not being in Juneau on April 5th?

No? Excellent. We can explore some opportunities, um, and we'll let you know where that's going to be. It is an all-day thing. Thank you for those of you who answer some of the most important questions about those days.

We will try to accommodate most all of the requests.

Mr. Bryson. Thank you, Madam Chair. We've had Bullwinkles pizza as a lunch or a dinner option, so could we do something other than Bullwinkles would be my only request.

Mr. Bryson, we are not planning on having pizza that day.

We are not planning on having pizza for lunch that day.

Um, the other thing that I wanted to call your attention to, um, is just something that we need to tackle before we get together on April 5th. Um, as you're aware, the assembly grant process requires community, um, groups and/or people who want to request money of the assembly to get a sponsor from one of you to sponsor their requests. And once you agree to sponsor their request, you can reach out to myself or Ms. Wendell, or if you still have a copy of the community request form, we need to have that filled out and we would like to get that back by March 15th. And that date feels early, it's 2 weeks away. But we did have a lot of back and forth trying to get those complete in the past.

And our intention on April 16th, when we get together for that Assembly Finance Committee, is for you to have the most complete data available to you so we can figure out what additional questions you might need to have answered before you can make a decision. So if you are sponsoring a community organization, March 15th is when we would like to have those forms back. Again, Miss Wendell or myself can help facilitate getting that form to you. It is not on the web page. We want people to have secured a sponsor before we hand out those forms.

Miss Hall. Thank you, Madam Chair. Miss Flick, for, um, well, maybe Neil knows already, but I— and this is brand new to me, and no one's really walked us through what that looks like. And, you know, so maybe we can meet at some point to do that. You know, do— is it a group reaches out to us to ask them to sponsor?

So we don't really do anything unless someone reaches out to us, or do we need to go find people?

I will answer the process part of that question, as I think you've gotten feedback from your peers. Organizations should approach you to sponsor a request for funds. And if they don't know who to contact, our recommendation is to contact the borough assembly. And then if it's something that strikes a passion in your heart that you want to take on as something to sponsor, you can reach out to that organization. But essentially, if an organization has a request, They find a sponsor.

If you sponsor them, you provide them with a community request form, which basically says, who are you? What are you asking for? How much do you need? What are you doing with it? Why is it important to the community?

How does it fit with the assembly goals? And then on April 16th, in your packet for that night, you will have all of the requests. And the expectation is that you will have reviewed the request and come up with questions that you would need to have answered in order for you to make a decision on whether you would fund that request or not. So we'll gather questions on April 16th, and then on April 30th when we come back together, there will be answers to those questions. Last year on April 30th at that meeting, members from those organizations were present in case there was an additional question they could just get answered right then.

And then big picture of the budget,.

And we haven't really talked about this, Ms. Wall, so I'm going to go out on a limb here. We keep a pending list, which is as we're getting information from the manager's presentations, from the empowered board presentations, from assembly, from community groups that are asking for your funding support, they go on a list after dialogue has happened. And you'll see, I think, starting on May 7th, the last item for May 7th is pending list for action. And that's when we start going through the pending list. And as a body, you say, yes, we're going to fund this, no, we're not, here's the level, is it operating, is it one-time, and work through all of those requests, whether they're internal to the city and borough of Juneau or whether they're organizational requests from outside.

And just for a little bit more context, Um, you know, this process really came about because we found that, you know, we have grant programs already for organizations to apply to. We have Social Services Fund, whatever. Um, we have, you know, the Jack has an Arts Fund, but we'd always find that there are things kind of outside, and we didn't want groups, um, spending a bunch of time on requests that were unrealistic that we were going to fund. We didn't want them to put big proposals together. And so the idea of a sponsor is if you feel passionately about something that you feel like is worthy of our time because you think it's got a good shot, then it's worth you working and sponsoring with this group.

You can reach out to groups, you know, but we, you know, have— we We as the Assembly usually know our financial picture and we can kind of talk to the groups about how realistic their ask is. So don't feel like you need to sponsor someone, but it's certainly a right you have as an Assembly member. And we're just, we're learning each year how to do this better. And so if you have questions, these guys can help you and we can keep shifting things as we go.

Anything else?

I believe that concludes all of our business today, and I know it was long. Thank you. All right, that brings us to next meeting date, which is Saturday. Oh, Mr. Kelly, thank you. I just had, uh, one question on the calendar.

So, um, I think the, the mayor was talking about using one of our free dates Um, for the, our co-meeting with the Airport Board, uh, was that April 9th? It's currently down here, skip, but that's going to be with the Airport Board. Yes, and I do have confirmation that the Airport Board has a quorum for that, so if you're comfortable solidifying that, we, uh, we can. All right, thank you. Any issues with April 9th?

Okay, next meeting date of the Finance Committee is Saturday, April 5th. And with that, we are adjourned.