April 1, 2026 Assembly Finance Committee Meeting

Call the April 1st Assembly Finance Committee meeting to order. Miss Wendell, will you note the roll? Thank you, Chair Wall. We have all assembly members present in chambers other than Assembly Members Smith and Weldon, who are available on Zoom. Thank you.

That brings us to approval of minutes. You have the March 4th, 2026 AFC joint meeting with Eagle Crest minutes in your packet. Any changes to those? Seeing none, those are so moved. Brings us to agenda topics, export manufacturing exemptions.

Miss Flick. Yes, Miss Flick. Thank you, Chair Wall. On page 12 of your packet, you'll see a memo from our assessor. Um, this, uh, action is, uh, for your consideration and approval.

Um, every year those organizations that meet the export manufacturing exemption criteria submit an application to the assessor's office. They review them and bring to you those that meet the criteria set aside in code. These require assembly approval and approval at the AFC committee is appropriate. So if there's questions, I'm happy to take those, but there are 4 organizations listed on page 12. Their more detailed applications are on the pages following.

Questions from the committee. Mr. Brooks.

Thank you, Madam Chair. On the property tax exemptions for the companies, does it have— does the exemption get applied to only areas that they're conducting business on, or just any property asset held by the company. These exemptions are specifically related to actions taken for the acquisition of machinery and equipment and have a 5-year period in which they may get exemptions. And so those details are laid out at the top of page 13. And so the exemptions that are included here are only those that specifically meet the 5 years and the appropriate percentage of exemption given whichever year those pieces are in.

Other questions? Ms. Hall.

Thank you, Chair Worrell. So, in— is this something they can renew, like when the 5 years are up? Is it something that they can reapply for? The, um, thank you for the question, um, Ms. Hall. The exemption applies only, um, at the acquisition.

So once the 5 years, um, has passed, um, if they, if at any point if they acquire new machinery or equipment, they can include that in an application and, um, it would be aggregated amongst, you know, again, to the appropriate year and the percentage that Um, that qualify.

Other questions? Ms. Hughes-Scandies, you have a motion for us? Thank you, Madam Chair. I move that the applications listed on the table— in the table on page 12— be approved, and I ask for unanimous consent.

Any objections? Seeing none, that is so moved. That brings us to agenda topic number 3, Gondola Project Update. Um, Ms. Kester, are you starting us off, or—. Go ahead.

Yes, thank you, Chair Wall. Uh, I'm gonna kick things off while, uh, Mr. Craig Dahl comes up and pulls up his presentation. I see it's up there on the screen. Um, so I want to, uh, provide a little bit of context for the memo that is provided in your packet. At That time that we drafted the memo, we were anticipating to have a response from a letter that the Eagle Crest board drafted to Goldbelt after the last time we met.

If you recall, they drafted a letter requesting a few things from Goldbelt, requesting information on, you know, whether or not they would be willing to extend the RSA, whether or not they would be willing to participate in the gondola and/or operating Eagle Crest. While we have had a meeting, a productive meeting with Gold Belt Leadership, and, um, Board Chair Cullen was attending that meeting, as was Mayor Weldon and myself. Um, we really wanted to make, you know, make sure we had something in writing. They won't be able to have a response until after their board meeting this Friday, so we unfortunately don't have that information that I know will be critical in your decision-making. That being said, I think that it's it's, you know, reasonable to expect and certainly foreshadowed by Gold Belt that the economic viability of Eagle Crest for them is really tied to their West Douglas operation.

And so that's the spirit with which they would be approaching anything. I, I would request that as you look, as you listen to Mr. Dahl's slides and kind of think about the direction that you want to provide to us today, that you, um, you know, think about giving some direction to look into what paying off the RSA, paying off that loan and terminating that RSA would look like. I don't think that that needs to be a decision that's made today, but it will take time for you to work through, you know, those complicated questions of coming up with what amounts to $9 million after, you know, we subtract kind of what we have remaining for the project. So I'm just planting that seed in your head so that as you think about this and the direction that you're, that you may give to staff after the presentation, that you understand that, you know, giving us that, that type of direction isn't necessarily an end. It doesn't make a decision, but allows us to bring back more information at a later date.

And with that, I'd really like to thank Mr. Dahl, Craig Dahl, for the work that he has done. He was brought in to really try and take a deep dive into the gondola project, and that he has done. I also want to have a special thanks to Jim Calvin, who's on the Eagle Crest board and has really put in yeoman's work. You, you heard from him last time we met on this project and the business plan and knows a great deal about it. So we're very fortunate to have that expertise, and I'll hand it over to Mr. Craig Dahl.

Thank you, Manager Kester. Miss—. Mr. Dahl, if you can just pause, we got a question here. Miss Hughes-Scandies. Thank you, Madam Chair.

Thank you for that, Madam Manager. Knowing that obviously they— the board needs to meet on Gold Belt side, and we don't have anything in writing. Um, and I appreciate the knowledge that for them, the spirit of it is that it's tied to the success of the other development. Um, for those two things to be linked, I'm wondering if you could characterize a little bit more going into that board meeting. That sounds like there was at least an openness to that, or interest, or could you— I mean, I understand you want them to speak for themselves and speak for themselves in writing, but can you provide any additional characterization of the meeting?

Uh, thank you for that question. I, um, do think that there was an openness on the part of Goldbelt to consider, um, you know, a number of different scenarios. And, um, it was a very friendly and collaborative meeting. Thanks, Mr. Dahl. Go ahead.

Okay. Okay. Well, I'm Craig Dahl. I'm the special projects manager for the City and Borough of Juneau. I joined the city manager's office last June in working directly for the city manager, specifically on the gondola project.

Uh, it was no secret that the project was stalled. And my role primarily was to locate the roadblocks, see if we could come to resolution and move the project forward. Along with that was providing transparency to the assembly, including the business case for the project. With the authority of the City Manager's Office, I was able to engage the various departments impacting the project, the Eagle Crest board and management, and outside businesses to identify next steps to get the project back on track. The year-long delay in creating— created a serious timing problem in order to meet the project deadline spelled out in the revenue sharing agreement with Gobelt that required the, that required the CBJ to deliver a working gondola system by May of 2028.

And we were, uh, it would be in serious jeopardy if we didn't get several key things moving. First was the RFP on the lower road construction of the lower road, which was necessary to have in place by the end of 2025 so the construction could begin in early 2026. The second one, and even more important, was an RFP out for the selection of the CMGC which was the month— which was many months behind and was needed to establish the cost of construction. We were able to accomplish both. The road was done just when winter started, so that was good.

But the CMGC was selected late in January, which is still very, very late in the process and has led to the delayed estimates coming in and delayed timing on the project.

Um, to get the job done, we assembled, as some people are calling it, the gondola team, and it was comprised of all CBJ employees plus the inclusion of Jim Calvin, who's a member of the Eagle Crest board. We met weekly to coordinate and review the status of actions in process, provide direction when necessary to the design team, and review the financial projections for the gondola and the related impact on Eagle Crest. I was joined in that by Alex Pierce, the visitor industry director, Alan Stafford, CBJ project engineer, Carlton Shorey, CBJ engineer, Jim Calvin, Eagle Crest board member, Aaron Lupro, acting general manager for Eagle Crest, and Tracy Sunflower, Eagle Crest marketing and events manager. Along with that was a design team, and this design team has been in place since the beginning of the project, or in the primary of the design project. It was led by Sean Boyle of Northwind Architects, and along with, uh, 6 other subcontractors each with a specialty required for engineering and design of the project.

I've said in other meetings, especially at the Eagle Crest board meeting, I want to compliment Alan Stafford, CBJ project engineer. During this more than a year of gap, Alan kept the project going forward with design without any answers being given by the, by the Eagle Crest side. So one of the things was to step back in and provide a communication tool. For the engineering department, but Alan's done an amazing job.

So the remaining part of my comments tonight will all relate to tonight, the issue of funding. Um, and, um, state several times, we know the project's on a hard, hard pause and certainly higher than expected estimates for construction. Um, I think most everybody that's been involved in the project knows how long we've been at this. You can go back to probably before 2012, but certainly in 2012 there were discussions about a gondola, and it was certainly mentioned in the summer development plan that was, was done for Eagle Crest. And then the Eagle Crest board adopted in 2021, they adopted the gondola into their strategic goals.

So it was clearly identified as something important to the to Eagle Crest. In 2022, the general manager presented a very extensive report to the assembly and explained and showed the key that the gondola was keystone to the summer development plan and a pathway for making Eagle Crest self-sustaining or significantly reducing its reliance on CBJ funding. Included in that presentation was an independent report from the SEC— SC Group, which agreed that capitalizing on our unique market opportunity when the cruise industry was an amazing opportunity for Eagle Crest. Also, SCJ Alliance, who's another technical consultant on the gondola and is still involved, found that the project was feasible and felt that it could be constructed for approximately $7 million. But they did qualify their report that 7 of their 10 budget items were not validated and were only estimates.

The proposal also included review by JADC, many letters from various organizations in, in Juneau, And of course, they included a lot of the data from the McKinley Group that talked about the cruise industry and the independent travelers that serve as the market for this project. There were a lot of public meetings, 13 different public meetings, plus all of the Eagle Crest Planning Committee meetings were available to the public. And then in February of 2022, they had over 200 participants in a public webinar focused on the gondola and summer development.

At the same meeting, basically the assembly passed an ordinance which authorized $2 million towards the purchase of the gondola. And that led to most moving quickly forward and acquiring a used, used Pultsgondola from the ski resort in Austria. Along with that, they also recognized the need for additional funding. And at that point, there was discussions involved with Goldbelt, who was, who was interested in becoming an investor in the project. That led to the topic of the revenue sharing agreement, which we entered into in June of 2023.

And there were 2 primary components for that agreement. One was that the CBJ deliver an operating gondola system by May of 2028. Once the gondola was in operation, Goldbelt would be, would share in all ridership revenue. And there's a schedule of how much revenue they would share over time, and when their investment was paid off for their return on investment, which actually was $20 million, their revenue share would continue. There was no end date in that agreement, interestingly enough.

They would continue to share, share in the ridership revenue. But the big trigger was failure to meet the 2028 deadline, which would trigger the repayment of their investment. And I don't— I'm Assuming that nobody, when they discussed this agreement, anticipated that we wouldn't be successful in getting there.

So I'm going to jump ahead. This is where we are right now. We have expended $5.5 million just on the gondola, the parts, the shipping, and the gondola itself. So what started off— what started off as a $1.8 million project ended up being about $5.5 million. We've expended $438,000 in salaries and other related expenses, and we have $2.3 million out in engineering and design.

So $8.2 million to date. Yet to expense, which is of the concern to the Finance Committee, is the tariff that was implemented by Trump, 50% on steel, and we've found no way around that up to this point. So that if we bring the shipment to the US, we'll have 50% tariff on the $1.86 million plus a fuel surcharge now because of the war in Iran. So we don't know what that is. We're estimating somewhere between $16,000 and $20,000.

And then we have other costs that are going to be associated if we bring the shipment all the way to Juneau for staging, inventorying, and inspecting. And then we have another contingency, uh, probably would be directed toward any sales effort if we decide to go in a different direction. So right at the moment, we're estimating that total project cost is $9.4 million against the $12.7 million in the total funding that was made available. That leaves $3.2 million available to repay Gold Belt if that ends up being the decision.

I want to make the comment that we've all reacted to the very, very high bid that came in on the project of $27 million. That's not the only cost that would be involved in the project. And it's important to note that there's still work to be done to create a complete experience. There's mountaintop development for viewing platforms, restrooms, concessions, hardened trails. Midstation development for more trails, upgrades to Eagle Crest facilities and systems, expanded retail and gift shop, a more robust point-of-sale system, and then marketing and transportation.

And originally, the marketing and transportation was Goldbelt's responsibility under the revenue sharing agreement. Um, we're assuming for the moment that that won't take place. Um, all of this is necessary to create a memorable and enjoyable experience for people to visit Eagle Crest. So it can't be done halfway. It needs to be— it needs to be done right, and it's going to involve more expense.

We aren't working on that at this point.

So we had a joint meeting, as you're all well aware. We had a joint meeting between the Borough Assembly and the UOPAS Board after we received the estimate of $27 million. That resulted at least in an unofficial hard pause on the project, and direction was given to our group to stop all further actions that would incur further expense and instead start identifying ongoing and unavoidable costs. So, and also steps taken to meet with Goldbelt Inc. to determine their level of interest. The manager has explained we've already had that meeting and now we're waiting for some kind of formal response from, from Goldbelt.

It's difficult to pick the path without, without that response.

So let's talk about the repayment. Um, we had a very lengthy meeting with Cornerstone just to really talk about the timing of the construction. And again, we're in April already. Um, construction season started— you wouldn't believe it with snow— but started yesterday. And trying to mobilize and get anything done in 2026 is already problematic, which means we cannot get to the May 2028 deadline between the state— the stages of requirement for pouring concrete, raising towers, um, and commissioning the system.

So that triggers the repayment of the $10 million to Gold Belt. At this point, the $10 million, which is earning 7% interest compounded monthly, Results right now, if you did pay it off on May 1st, $12,045,000, and the monthly accrual is $70,000 a month and getting larger every month. So while we ponder that decision, the, the expense is going out the door. Um, the net amount, given the numbers we're looking at, is $8.7 million, um, is what we would have to come up with to repay Goldbelt.

I'll just keep going. Well, maybe it's a good time to—. Well, no, that was your only chance to ask questions.

Would people like to stop and ask questions or keep having Mr. Dahl keep rolling? I feel like it might answer some of my questions, so maybe you should, uh, keep moving. Yeah, let me see if I can get rid of all these people on the side of my screen. Well, that didn't help.

So these are the— we've already kind of identified this in that one, that one sheet, but these are the, these are the items that we see coming up. The $946,000 is avoidable if we do not ship the parts to the US, and that is certainly on the table. I'll talk about more about that in a bit. Completion and transportation have been going to, gone to La Carré refurbish. We still owe $173,000 on that project.

And then we have the unloading and staging here in Juneau if that's the case, and then we have storage and additional transportation for contingency if we take another, another course of action.

So let me talk about the gondola performance, and really in none of these meetings that we really talked about the possibilities and the potential for the project. And I think that's why— and I know I've been more than in one meeting commented this is a good project, and I'll show you what we've been looking at. Um, again, no secret that we're in a very unique market with the cruise industry, unique to just about any, any type of product like this. And we have the opportunity to market this product to more than 1.7 million ship visitors as well as up to 200,000 independent travelers. Every year.

So even capturing a conservative number of visitors to ride the gondola creates a significant revenue stream that can in turn help Euclid Crest operations.

Even with the higher construction cost, while it's clearly outside the city and borough's capacity to do so, it still is a reasonable investment, which may sound ridiculous away if you think of $27 million, but that number is not that out of line other investments in ski areas and rate of return for an investor. So it's, it's worth pursuing that as another option.

What we did is we built a dynamic revenue model, and this is just showing you the top end of this. We— I have to give credit to Kirk Duncan, who did a lot of work on, on the Eagle Crest budget. He came in afterwards and looked at what had been proposed. We took his work and added all of these different parameters so that we can change capture rate, wholesale pricing to the product. We added independent sales, local use, days of operation, and this allows us to model what kind of revenue we believe we can generate off, off the gondola.

We also put a lot of work on operating expenses, and I have to give Jim Calvin complete credit for doing an amazing amount of work on this.

We were extremely concerned to make sure we were conservative. There was a lot of work done by previous general manager, a lot of work done by Kirk Duncan, and we basically validated and added to that as we went along. We used SEC Group— SE Group— to look specifically at the gondola, to look at gondola operating expenses that are reasonable and practical, ongoing maintenance expense. Replacement reserves and those kinds of things that would impact the gondola operation. We also talked to different gondola operators to ask their opinion on what were the things that they saw in their own operation that we should be concerned with.

In addition to that, we were careful on the personnel side to build in appropriate staffing, not just for operations, but for mountain safety. And that was one of the concerns raised early on in the project is that if we, if we start putting people on the mountain we need to make sure we have a way to get them off and a way to respond to that over time. So we've, we've built a fairly heavy number into that. So at the end of that, we determined that the expense that we've been using is $2.7— call it $2.8 million a year for non-personnel and personnel costs. We've also built in an inflation number, inflation rate, that we can, we can shock the model depending on what we view the increasing inflation rate would be.

So this is just a quick snapshot based upon the one model that I grabbed, but our total revenue projections for '29, '30, and '31, you can see, were $6.5 million jumping up to $8 million in year '31 because that's when we inflected a price increase. And you can see below the operating expenses of $2.7 million leaving a net of $3.7 up to $5 million just in these particular years, which is the beginning years of the project.

This is a better representation of what we've been looking at, and we can, we can move this, we can move the needle up and down consistently. The top line is the gross revenue between the gift shop concessions and the gondola operations. You can see we've, we've been in 3% inflation rate on expenses, and that leaves net revenue for Eagle Crest. And I've drawn a $6 million line there in the middle just to give you a benchmark of up and down. But there's no reason this project should not generate something below and above $6 million a year net revenue to the project.

That's a significant return on investment.

So Jim and the Eagle Crest Board have been working on their funding issue, and my focus was entirely on the gondola project. I've tried to stay out of Eagle Crest business, which has been impossible.

But at this point, the project is fully in the hands of Eagle Crest Board and the CBJ Assembly to determine the path forward. My role is pretty much winding down. Um, you can see the numbers. We can talk more about it at some point. But at this point, what we see is you have 3 options going forward.

You can enter into a new development and operating agreement with Goldbelt to complete the gondola and operate the ski area. If Goldbelt does not agree to pause or renegotiate the RSA, then terminating the agreement as soon as possible is probably necessary to stop the $70,000 a month interest expense. Keep the project intact but pause at the lowest possible cost. That means leave all the parts in Europe until Eagle Crest Board can develop a prospectus and other planning materials for outreach to third-party investors. And that doesn't mean that Goldbelt could not end up being the other investor even if we terminate the agreement.

That doesn't preclude them from from looking at this project. And the third option is stop the project entirely, sell the existing gondola system and all the parts in Europe. Um, uh, a refinement of that statement: the gondola that we own here in Juneau and the cars that go with it that are in Colorado is a complete system. We do not need the parts that are in Europe. If someone wants to build the Eagle Crest gondola the way we've designed it.

And by the way, the design is 100% done. It's a— it's already packaged. If someone wants to build it, it's ready to go. But it's engineered and designed to go into Eagle Crest. So if an investor wants to build Eagle Crest, then they're going to need to bring— we're going to need to bring the parts from Europe.

Otherwise, we can sell the cars and our system independently. There is a market for it. And we can also sell the parts in Europe, and there is a market for those there. The holding time for that could be 2 to 3 years, but it's not an inconsequential amount. We're working with our— one of our agents right now that sold us the equipment to see what that might bring us and what kind of time frame we could expect to hold.

So that's my report.

Madam Chair, Mr. Dahl, thank you so much for, for all your work and answering many questions that we would have loved to have had many years ago. Questions for Mr. Dahl? Um, Mr. Kelly, thank you. Before I ask any questions, I will just restate that both, just for the— in the interest of transparency, that both of my stepchildren are shareholders in Gold Belt, but I've had a conversation with the attorney and there is no conflict.

Questions?

Miss Yuskandis.

Uh, thanks, Madam Chair, and thank you, Mr. Dahl. Very helpful. I just want to make sure I think I'm understanding this correctly. The ongoing— I just want to make sure I understand the ongoing cost piece and how those relate to the cost of the project to date in relation to the hard pause. So our total truly out the door expenses on the project today are that $8.2 million number, correct?

So if we were to decide to scrap the project, these ongoing costs— you just mentioned the cars as one of the things that— and the parts that have a market. Are there any of these ongoing costs that you see as not get outable of, to use the technical term. It's a technical term. Yeah, I've used it many times. Um, so tonight we had to make a presentation.

There's several things still in motion, so it's kind of— it's not a straight answer. First of all, we would not— getting out of the project would imply nobody taking it over, and we would not bring the parts So we would avoid the $946,000 on that.

Part of that expense, if we do bring the parts to Juneau, is that— and part of it is the— and this gets into Eagle Crest board and the assembly, what you want to do next. There is a scenario by which you still believe there is a possibility of having the project done here. Now, what— I'm going to get sidetracked. I'm going to sidetrack myself on this one because at first we didn't think we could pause the shipment. We thought we were going to have to take delivery of the parts.

So we were going to have to— they're paid, they're already paid, by the way, to come all the way to Juneau. We were going to have to make sure that those got sorted, stacked, inventoried, and marked and inspected so they could be put away and waiting for a decision. We know we can pause the shipment now, so that's not really a problem. So I would say the $105,000 that we put in there was to do with inspection of the parts in Juneau, and we could avoid that if we don't ship the parts.

The other $100,000 we're going to probably spend some way. We have to explore different agency opportunities, and I don't want to get ahead of our— what we've— we've just received a proposal from our agent in Canada that helped us get the parts in the first place, and we have to look at what his expenses are, what kind of costs would go forward. It would be covered by that $100,000. Um, there is, uh, I just probably from, um, just realized there's probably another $7,000 that needs to be booked as an adjustment to the Lower Road that hasn't been processed through accounts payable yet or through contracts. Um, not a big amount of money in the grand scheme of things.

Sorry, say that again. $7,000 Will be due on the Lower Road contract. I heard $700,000. Oh no, no, disagree on what's a lot of money. I am done with 6-digit Okay, great.

Okay, so something like the inventorying, like the— so potentially if we were to park the things there and that kills the inventorying as well, then potentially that's $1 million of ongoing costs that would also be—. That's correct. Great, thank you.

Mr. Smith.

Thank you, Madam Chair. Mr. Dahl, thank you. I guess just to confirm, you know, in your projections on the slide with the table and then the graph, when you're saying net revenue to Eagle Crest, does that include the profit sharing arrangement with Goldbelt? No, this— no, I know your question. No, we have two different models going, and so just based on everything that's happened in the last few days, one of the models we worked with is not paying Goldbelt their revenue share.

So this is purely to whoever would run the gondola. I will tell you that it doesn't degrade the revenue that much because they're— off the top of my head, I'm going to say that their normal annual take is somewhere between high $400,000 and $550,000 a year. So it doesn't take a huge amount out of each each revenue stream. It takes them quite a few years to recover their investment the way the agreement was written. Um, and then I have another model where we can also— if we were going to borrow any money, um, independent source, um, to show the debt service on that.

So again, it depends on the question and which scenario you want to build, but we've, we've got the models built to do that. Thank you, Mr. Kelly. Thank you. Do we have any estimate on how much we could recover from selling the gondola?

No, that would be premature. We, we have seen some numbers, but we haven't had time to analyze them. We just got them yesterday.

Mayor Weldon, then Mr. Steininger.

Thank you, Mr. Dahl, and thank you to Jim Kelvin and the rest of the Eagle Crest board. Um, and I appreciate, uh, you going over the, um, projected revenues if this had ever gone through, because hopefully that will remind people why we jumped into this in the first place. But my question is, I'm pretty sure I heard it, that We— if somebody else buys the gondola, we could keep the parts over in Europe and not bring them over. Is that correct?

If someone buys the gondola to go someplace else, that's correct. Okay, thanks.

Mr. Smith.

Thank you, Madam Chair. Um, I guess I did have a question. Sorry, no, I, I'm, I'm gonna call on Mr. Steininger. I'm trying to keep track. Then we'll go to you, Mr. Smith.

Go ahead, Mr. Steininger. Thank you. Um, Mr. Dahl, you mentioned that in this modeling you'd ran a scenario where debt was issued to pay for the $27 million and then paid off over time. You know, is that something you can provide to us or just kind briefly say, you know, so how much revenue comes back to Eagle? So let me be completely transparent with that question.

We were using a completely different debt number on that, not $27 million. So, um, I'd be looking at— if I were looking at it now, it'd be $27 million being invested, um, by someone, and then them looking at the return on investment.

So, follow-up, um, could you model it to show if, you know, looking at this amount of revenue if we issued revenue bonds to pay for the $27 million to complete the project, Eagle Crest continued forward kind of with the existing plan, like, what does that actually look like from a cash flow perspective? We could model that. If Angie tells us the numbers, we will model that. Excellent.

I'm gonna get Mr. Brooks in here because we haven't heard from him yet, and then we'll go back down the line to everyone raising their hands. Go ahead, Mr. Brooks. Thank you, Madam Chair. If in the scenario where we decide to try and sell the equipment from its current location, what are— what would the storage costs in another country be associated with keeping it there? Um, that's one of the things we're looking at right now.

Now, at the moment, we have an indication that we have quite a bit of time without any additional storage fees. And that was one of the problems when we lost track of the— we knew where they were. It was just nobody was doing anything with them because we had a fairly extensive storage fee bill that we had to pay. Right at the moment, we have no charges being accrued for that.

Mr. Smith.

Thank you, Madam Chair. Mr. Dahl, you know, I'm not a contractor or anything. So this rough order of magnitude estimate of $27 million from the CMGC, can you explain more what that means? Like, if that— I mean, is that we need to raise that amount of money before we can move forward with the project due to charter? I mean, that's like if we build this that's the price tag we should expect to see, or could it be lower?

So let me, if I, if I may take just a couple minutes and explain the CMGC process, which I think we've discussed in the past. But rather than just having an RFP to find a general contractor to build the gondola, we needed a construction manager and general contractor who was supposed to be in place far enough back into the design process to participate in the design to find, no, don't do it this way, this is a more efficient way to do it. Because, you know, no offense to any consultants or engineers, sometimes they see it this way and then the actual builder comes along and says, I can do it a lot easier this way.

So there was no cost estimate except the very beginning. The very beginning back in 2022 was the only cost estimate that was ever done on the project.

It was in turn— it was intentional that they wanted— engineering wanted to go with the CMGC process because of needing sort of boots on the ground, factual, what's this really going to cost us to do. We waited too long to get the CMGC into place that we lost the opportunity for them to participate in the design process. So basically, when Cornerstone was retained, we were at already at the 95% mark. So the last time we gave them to look at the project, the more it could be just assumed that probably the higher the bid because of risk. So the rough order of magnitude was their best shot out of the gate of what they think it would cost.

Then we had— we gave them until April 1st today to give a GMP, which is a guaranteed maximum price, which would have been the price we would have worked with. We made a decision after meeting with Cornerstone Probably for 2 reasons. We could see this was not going in the right direction. Second of all, they said they don't have enough— they've not had enough time, nor has the project engineer for the city had time to work with Cornerstone to also explore different ways to cut costs. So we, we basically said till the end of, till the end of April to actually get a GMP, even though that guaranteed maximum price is not going to probably be used.

We expect that number to come down, but not by a magnitude where you're going to go, oh yeah, we came down from 27 to 17 million. But, but in answer, Mr. Smith, it was the rough order of magnitude was their best, you know, rough estimate. And then you take the next 30 days and try to refine the numbers and come up with a better one.

Thank you very much. A quick follow-up, and what is included in that price? Like, inter— that's just getting the gondola up, or what, you know, what, what's on top of the mountain, or nothing. That's, uh, as somebody coined the phrase, that's building the bus to the top. That's building the gondola project.

And early on, I don't know how far back, the original mountaintop, the mountain house that was being designed, which I believe came in at a price tag of over $4 million, was scrapped. And at that point, they shrunk the project back to strictly bottom, mid-station, and top. And that's why we still have to have other kinds of viewing platforms and amenities at the top to take care of our passengers.

Miss Hall, since she hasn't gotten in there, and then I'm going to go to Miss Hughes-Candice, and the mayor maybe had her hand up too. Go ahead, Miss Hall. Thank you, Chair Wall and Eagle Crest Board, as well as Craig, for your hard work on this. At what point in the project would we need the parts from Austria?

Had we been on track to start the project now, we would need towers We have— we have some towers now, so we could be setting tire towers early in '27.

There's other parts on board which are extra crossbars, and then we have stronger hangers for the cars to meet US standards.

But we could— we could do the— what would have been the 2026 construction season, we could have done without the additional parts. But we can't complete the project without the additional parts. Follow up. And could we ship them to Canada? Do we have— is the same tariff in effect between Canada and the US that is between—.

Or are we getting along with Canada now? Some of us are. And it's not April Fools, exactly. Okay, well, that's a, a unique question.

Eventually they have to get into the US, so we're going to get tariffed one way or the other.

But good question.

All right, I've got a Missus Gandes, Mayor Weldon, Mr. Brooks, and Mr. Kelly. Thank you, Madam Chair. I'm going to switch it up a little bit. Looking right now at the slide, that's the gondola project projections. It sounded like you said, you, you know, you built on a lot of the work that had already been done and refined along the way.

I'm looking at the price per rider. I'm thinking all the way over to the right, which is fairly different than other ones I've seen along the way. Um, did you make major changes there, and what was the thinking if you did? You're looking at the $85, that's the wholesale price to be sold on board the cruise ship. And the $45, that's a, that's an estimate on the local, local price tag that has, and that can be determined.

We have the ability under the agreement, we're not locked in what we charge And or what Goldbelt would have charged to the cruise passenger is different than what we can charge to the independent traveler, which is also different than we can charge to a local user. And those are kind of the— those are some of the details on pricing that would have to be worked out. In the weeds. The biggest number is clearly the cruise ship passenger, and that $85 was actually approved by the Eagle Crest board, I believe, 2 years ago. Okay.

Goldbelt was very comfortable with that number in terms of marketing on board the cruise ships. And, um, and again, it's, it's subject to change, but it's not going to drop significantly. Okay. And so the flexibility has always existed to play with the numbers for the other two groups? Yes.

Okay, thanks.

Mayor Walden, did you have a question? No. Okay, Mr. Brooks and Mr. Kelly.

Thank you, Madam Chair. I, with the contractor Cornerstone coming in, was, you know, from the beginning known that that contractor was like a crucial part for making it move forward. And if it was known, why did so much design work happen? Without them prior to them coming on.

I'll let you phone a friend here. I'm not sure if that's a question that, you know, you're not really managing the project itself, so I don't know that you know that. You might, but ask it one more time and I'll make up an answer.

Just why, why was so much— why was the design brought to 95% before a contractor was on? Um, so I, I could probably go back and we could go through the entire project of why each step was delayed along the way. Um, and I will tell you that one of the biggest obstacles to this project was the flood. And so the amount of work that takes to bring a project to to formulate an RFP to get it out to the marketplace is— really requires some really dedicated time on the part of the engineering staff. And when I stepped into the project, I will tell you that everybody was concerned about the gondola project, but engineering resources were stretched thin, not just by the flood, but there were several other, other city and borough projects demanding attention, and there's only a limited number of design engineers.

So getting the RFP out on both the road and the CMGC were stalled I'm just going to say, as a matter of resources and time, uh, in the meantime, we— you're not going to stop all these consultants from, from doing their work to try to get forward. And they're a very dynamic group. I mean, they're very serious about the project. That's the best answer I can give you. Mr.

Kelly, thank you. This is something of a follow-up to Ms. Hall's question about the timing and, and the tariffs. It's My recollection, and I think the whole discussion of tariffs is perhaps a little bit complicated, but it's my recollection that at least some of the tariffs that were not struck down have time constraints attached to them unless extended by Congress. Do you know if the steel and aluminum tariffs are such tariffs that might expire before we need to have the materials shipped from Austria? I don't have an exact answer.

There was one discussion about the possibility that if we are delaying long enough that something might happen. Our particular tariff falls under what they call Section 232, and was it— it was exempt from being struck down by the Supreme Court, so we're still in there. Interestingly enough, there was already a 25% tariff in play when we shipped the first gondola, but it was classified as ski area parts and became— was not charged the 25% on any amount of steel. With the implementation of the 50% tariff, custom— U.S. Customs started a very rigid inspection process. So if I say it's filled with cotton balls, they're going to open the door and see that it's filled with steel.

And so that's a good question, the timing. And we kind of, again, we got diverted from trying to track down once the Supreme Court decision, we realized it wasn't going to impact our tariff.

I'm going to jump in with the question. I appreciate that folks are thinking about what comes next here, but, you know, I'm, I'm still a bit where Mr. Brooks is in terms of how did we get here, why this is brutal. Um, and I know I'm asking for your opinion here, and because there's lots of them out there of how we got here, some that I agree with and some that I don't. Um, but when you think about the cost estimate, you know, I, I looked back when this was originally pitched to the assembly to purchase. We were talking about $7 million to install what, a 4,000-square-foot building up there in a mountain coaster, and now we're at $37 million with, you know, not those things.

Do you have a perspective on why our cost estimates were so— I know things have increased in price, but not, not by that much elsewhere. No, it would be— no, it's outside my understanding of how they came up with the numbers in the first place.

And all you have to do is look at the projects that city is dealing with right now to see an exorbitant cost escalation all across the board in terms of construction materials. And that doesn't account for the huge gap, but it accounts for some of it. I think right now engineering is using a 7% inflationary number on every project they're working on on an annual basis. Manager Kester, do you have anything to say in that response to that question from your perspective? Again, recognizing I'm asking for some opinions, but I feel like we have to ask these questions given how— what a terrible spot we find ourselves in.

Thank you, Chair. Well, I certainly have an opinion and have spent a lot of time reflecting on that. I have talked to some people about how this might be a perfect case study for how not to do a public-private partnership. Um, so I think there are a lot of things at play, um, and want to acknowledge that I don't know exactly how many, but there are only a couple of members sitting here today that were part of that original decision, whether you're talking about the administration, uh, the Assembly, or the Eagle Crest board. Um, so I think that all of that turnover has resulted a little bit in, like, no one person being responsible.

So, um, you could certainly say, well, it's the Eagle Crest board who advocated for the project, who's invested in the project and wanted to see the project happen. And so, you know, they're responsible for being the entity that, you know, manages that and makes sure it happens. You could also say that it's the city manager because the city manager hires the project engineer, and the city— it's the city manager's job to make sure that the, you know, project stays on time and the project is successful. And I think both of those things are true, and the project suffered from, again, turnover with the general manager, turnover with— I did the math, uh, the RSA was signed to, let's say, June, August 2 months before I was hired as, uh, as city manager, turnover in the manager's office. Um, and again, with the manager's office being able to say, well, this is an Eagle Crest project, and Eagle Crest being able to say, well, this is an engineering project because we're not managing that, it allowed for a lot of, um, not finger-pointing, because I think it has been a collaborative project, but again, You need one person, one person who's probably being paid to be responsible.

You know, I am paid by the city to be responsible for lots of things. So I think that, that, that tension between this, like, co-management of tourism projects, which we've seen raise itself in Docks and Harbors issues too, and not, not lately, but we remember a time when we really struggled a lot with that co-management. Um, and I think that We, uh, we have seen that in this project too. Now, that's my opinion about, like, from a very high perspective of where things went wrong. I also think that there are many, many different decision points where either the Eagle Crest board, the project manager, the general manager, myself made decisions, the assembly made decisions based on available information and made the best decision that we could at that time.

An example that I'm enumerating on a lot is to build the road. So we bifurcated the project into the civil engineering and the, uh, the actual installation of the gondola. And the reason we did that, um, because you know the rule, you can't do a project unless you have all the funding for the project appropriated. But the reason that we did that was that there was no way we were going to meet this timeline unless we started on construction, and there was tremendous pressure to get started on construction. And so I definitely gave the direction that was like, we can't wait until we have this GCCM on board.

We have contractors who know how to build a road. We've designed the road that we can take this part of the project and complete this part of the project so that we can maintain on schedule. You know, we're also not really used to as a public entity and working under these tight timelines that have real financial complications. We have real timelines, we have real deadlines all the time, but you know, we are not a private entity, and in a sense, we are trying to operate in this very private business sphere, which is like making money off of, uh, you know, our visitors. Um, and I just don't think, in my— this is very much my opinion, um, that that is like what government is designed to do.

We have too much process, we have too much procurement, we have too many layers of complication that have, have really slowed this project down. And so when I look, I can, I can, you know, spend quite a bit of time and probably should spend the time detailing all the moments where, you know, we can learn from because we need to learn from this. But at a high level, I think that not having like one person or entity's head that's on the the table, on the chopping block if this fails, um, has, has really— it has suffered from that lack of accountability.

Thank you for that, Manager Kester.

Mr. Brooks.

Thank you, Madam Chair. This, uh, would be a question for the manager, just based off of a comment that Mr. Dahl had said it. Do we have a standard practice where, uh, we're charging ourselves a 7% inflationary rate for engineering?

And what Mr. Dahl referred to is when we do cost estimates, we will take into account when we present those cost estimates that 7% annual inflation for total project cost. So it's not a charge. It's like if, if, if you say, Katie, I want you to put a new roof on a school and we do a cost estimate that says that's a $5 million project, but we know we're not going to— it's going to take a year to design and a year to construct, then we're going to have 2 years of inflation built into that cost estimate.

Right, I'm going to move us towards, um. Some of the discussion we have to have here tonight, unfortunately. Um, so we have 2 memos. Um, we'll, we'll talk about— we'll definitely focus on the gondola first before we talk about Eagle's Crest budget and that issue. Um, Ms. Hughes, we have some recommended action at the bottom of the memo.

And in our packet, I guess. Missy Skinnies, do you feel prepared to give us, um, a motion to start this discussion?

Thanks, Madam Chair. Yes, I'm gonna— I think, you know, the— in the supplemental materials, we have 3 NEAT motions that start to get into a little bit of specifics and detail. And then, of course, at the end of the, um, memo for Mr. Dahl, it's spoken about a bit more generally. So I think I'll try to offer a pretty general motion just to get us going, and then we can refine from there if needed. So it would be my motion that we provide direction to Eagle Crest Board and the city manager to stop the project in a manner that would retain as much value in the assets that we do own and avoid as many costs as can be avoided.

Um, I'll just maybe first ask staff if— is that the level of direction you're— would that give— if we were to pass this motion, were that— would that give you the level of, um, input direction that you're hoping for this evening?

I, I— yes, thank you. I, I, um, I I'm just trying to restate that so that I can truly understand the direction that you're giving, and I think the direction is a hard pause and try to incur no new costs. The— what the direction is not at this moment is, you know, try to sell the parts, etc. So just want to clarify that distinction. Yeah, thank you for that, uh, restating it.

No, I think, uh, a hard end to the project. I didn't get into the specifics of selling that because I thought this might be a better place to start the conversation than getting into that. If it is more useful to— I guess, Madam Chair, let me ask you, ultimately we want to end with something that's useful to staff. Can we take a brief at ease for you to discuss with the manager to make sure you guys come up with something useful as a starting place? That'd be great.

Order here.

Miss Hughes-Scandies, do you have a revised motion for us? Thank you, Madam Chair. I think I do. So my motion would be to direct staff to end the project and draft an ordinance repaying Gold Belt and getting out of the RSA.

Um, do we have objections to that motion? Mr. Brooks. Thank you, Madam Chair. I'd object for the purpose of an amendment. Uh, I would like to amend that we direct staff to investigate any and all avenues for getting out of the RSA without having to repay the $10 million.

Well, maybe I'll ask— that brings up questions for me. Maybe I'll see if they just— Manager Kessler, whether you understand what that would mean if we were to pass that.

So the RSA is pretty clear. Either party— or we can terminate the RSA, but when we do, we owe principal and interest. So I mean, I think we have assets and maybe assets that Gold Belt wants. In the end, those assets have cash value. So I think direction to kind of be creative with those coming up with those assets would be very useful to me.

Just want to acknowledge that there's like no— I don't believe there's a scenario where Gold Belt would be like, just kidding, you guys keep that $10 million. Mr. Brooks, maybe restating that, given that information. Thank you, Madam Chair, and thank you, Manager Kester. I can definitely make it a little more rigid. I would amend that we try to get out of the RSA while exercising all options of compensation aside from just strictly funds.

Any objections to that direction? Mayor Weldon.

Thank you, Madam Chair. Um, I'll be honest, I don't see that amendment any different than, uh, Miss Huskany's, uh, motion, unless I'm missing something, because I think she said all options. So I think that covers what Mr. Brooks is trying to do. I think he's just trying to provide maybe more specific direction that not just cash will be explored as an option.

Is that— that is, I'm getting a shaking head, which is definitely included in Ms. Hughes-Gandy's, but would clarify for everyone that that is an option.

Miss Atkinson.

Thank you, Madam Chair. I'm in a similar boat as the mayor, and, uh, I think if staff tells me this won't affect timeline, I'm just fine. But I want to remind everyone we're compounding interest monthly, so I don't want, in an effort to try to pay less, us to drag the process out longer.

I'll ask a question then. Um, Manager Kuster, do you think that, um, if we were to pass this amendment, would that change, um, with our timeline?

Um, no, I think that in the end it's a negotiation. And so without having that conversation with Goldbelt, it's difficult to say, you know, what they might— what their reaction might be. But at least I have the information from which to have the conversation. And of course, I'll have the, the written response as well, which will inform next steps. I think this, uh, direction just gives me more, uh, me and the Eagle Crest board, because this is something that we're working on together, more, um, uh, direction of the art of the possible.

Do we still have objections? Maintain. Miss Hughes-Gandese. Thanks, Madam Chair. I just wanted to clarify that the— it was Mr. Brooks' intention to— that your amendment, you're not trying to amend the ending of the projects, just the flexibility.

Okay, no, I remove my objection.

Miss Hall, can we have the original motion restated, please? Sure. Uh, it would be to direct staff to end the project and draft an ordinance repaying Gold Belt and getting out of the RSA.

So I think the amendment is just on the repaying Gold Belt part.

Do we have any objections to that amendment?

Seeing none, that amendment is so moved, which brings us back to the original motion as amended. Mr. Kelly. Thank you. Just objecting for the purposes of a question.

One thing that was just brought up, I think, is important, is timeline, especially since we are paying by the month, or accruing, I guess, obligations by the month.

It's clear to me that we would need an ordinance in order to dispense with money, but would there be a quicker process to end the agreement so that way we could stop accruing the interest?

You would need to appropriate funds to terminate the agreement, and that would require 2 meetings. You certainly could expedite that with special meetings.

Follow-up. Would it be possible to Actually, never mind. I think that answers my question enough.

Mr. Smith.

Thank you, Madam Chair. Um, I'll object to the motion. Uh, I certainly understand the desire to, to, to stop. To me, there's still there's still information out there. We don't have a refined price from the construction manager general contractor.

We don't know what Gold Belt is going to say, and, you know, if they're open to evaluating anything with the RSA.

And again, to me, I— and as we see in another memo, like, anyway, I— this project It has potential. It can work. I understand the reluctance and, you know, it has been painfully dragged along and the price tags, it's just like ballooning. But I'm still there more so with the— we don't know what Goldbelt has said about, you know, renegotiating or doing the RSA and we don't have a refined price from the construction manager, general contractor, I'm, I'm not ready to make this move at this time. Thank you.

Sadkinson, then Mr. Steininger. Thank you, Madam Chair. I just want to speak in support of this motion. Uh, I think I'm in a different position than Mr. Smith is on the overall project, my views on it, but at the same time, this motion to me does not read as a thing that is irreversible. We are working to draw up an ordinance to potentially end the RSA.

There is still time, as Mr. Kester mentioned, in between us voting on that, that ordinance to negotiate with Goldbelt. If there is a viable avenue, I think we have time to do that, but this still preserves our ability to move quickly and get out of the RSA if necessary. And we're not currently moving to sell any of the assets. All we're doing is ensuring we don't accrue extra costs. Costs on a project that we are not certain we want to go forward with.

Um, I think that we probably should have made a motion like this a lot sooner, so I am definitely in support of the motion.

Mr. Steininger.

Um, I guess I'll share Deputy Mayor Smith's objection and kind of speak to that concern. I, I feel like there's more information about this project that we need. What we do have, what we've been presented today, is a project that is profitable, that, that pencils out. I mean, the chart that we were shown by Mr. Dahl shows net revenue to Eagle Crest, you know, getting that $6 million a year, and that's after operating expenses. Granted, there were some factors in there in his modeling that, that aren't there, you know, like part of that, the RSA payments to Gold Belt, you know, a couple other factors.

But still, it is a project that's profitable. And yes, it is expensive to get there, but even with that expense, it still pencils out as a project. And I think we need to do a little bit more due diligence about before we say we're going to completely stop this project. I think we need a better idea of what those avenues and options we have for Eagle Crest generally are, because if we stop this project and then we start doing the due diligence after stopping the project, we may get to a point where we say, well, Magandawa actually was probably the best option, the best bang for the buck to make sure Eagle Crest is viable long term. I don't know that that is the case.

I don't feel like I have enough information today to know that. I think we're making the decision to halt the project too soon in this process. We need to think about what we're going to do with Siegelcrest before we make the decision to stop. I think the hard pause that we're on now that's already been issued where we are trying not to incur any additional expenses, that's a good position to be in. $70,000 A month in interest on a loan.

Yes, that does sound like a lot, but we are talking about a, you know, $37, $40 million project and a, you know, budget item that costs us, what, $3-ish million a year in general fund. You know, $70,000 a month on an issue that big is— may sound like a lot of money, but it's not as much if we're going to start closing options for getting rid of that $3 million subsidy. Stay in the long run. So I, I have hesitancy to kill the project here tonight. That, that's, I guess, what I'm getting at.

Mayor Weldon.

Uh, thank you, Madam Chair. Um, I'm going to object for purposes of an amendment that might help me get there, and maybe a couple other people. And my amendment would be an 'and' at the end of that sentence. To ask, because we can't, um, direct EEOCrest board to see if they could find another investor, which could include Gold Wealth. We haven't heard from them, um, or to find someone to sell the gondola.

And, um, just briefly speaking to it, I'm kind of in the same boat as the Deputy Mayor Mr. Steininger, I wish we'd heard from Goldbelt before we made this decision. I thought we were going to hear from them tonight.

Objections to that amendment?

Mr. Brooks.

Thank you, Madam Chair. Uh, the only objection I'd have would be amending the selling of the equipment. I think that's the type of decision that we need to wait for more of the information on, but some of these things are a little more broad that can be applied now. I'll object for a question on this. We— I believe we did provide Eagle Crest board direction to do this.

And I don't know if this motion— I don't see a reason that they couldn't keep doing that even if we pass this tonight. But maybe, maybe my question just is, is that, is that correct that we did provide that, or would you interpret this tonight as not doing that? Uh, Carol, I believe at the joint meeting on March 4th, the direction was to have the city manager and the Eagle Crest board first meet and speak with Gold Belt to see if that was a viable option, and if not, then to look at other investment investors or investment opportunities.

I'll pause and save my questions for after. Great. Um, I'm looking for objections to the motion. I saw the mayor and then Miss Hughes-Andes. Thank you, Madam Chair.

I'm just objecting to ask the maker of the amendment to please restate the amendment.

Ah, thank you. And Um, the reason I was doing this is because this has kind of been a change of our direction, so I didn't want the Eagle Crest board to not continue their search for an investor. And I understand, uh, um, where Mr. Brooks is coming from, so my motion will be slightly changed. It will be to ask the Eagle Crest board to continue looking for— searching for other investors.

Any objections to that motion? I'll object for a question to the manager. Um, I don't see this as compli— you know, my guess is we have to, in any situations that people are mentioning in their mind, we would have to terminate the agreement. So, um, I don't see this motion changing how you would approach— how you would approach stopping and figuring out how much to get out of this agreement, how much, you know, how to make that as little as possible. But you tell me whether this would change that direction in any substantial way.

Thank you, Chair Wall. I don't think it would, because the idea of an investor does require terminating that, that RSA. It requires a clean slate, right? And of course, we still don't know what Gold Belt is going to say. And I do think that, you know, doing that legwork leaves that door open.

I just want to emphasize that, um, I think there will be another decision point that— there could be another decision point on the aggressiveness with which Eagle Crest pursues a second investor because, um, you know, it's a— I have no idea who those investors are. Eagle Crest board members have a better idea, but in reality, it probably requires a professional effort with a professional, you know, marketing portfolio, of which Mr. Dahl has certainly done a lot of the groundwork for, but So I think that this direction is really important to foreshadow the Assembly's intent and let them continue doing that work. But, um, that real commitment to, uh, to the project in that manner is much bigger than a few conversations.

Thanks, that's helpful. I'm going to maintain my objection then, just because although I am happy if people are trying to find an investor for this project, I do not want to be in a situation where that is holding up our timeline at all, because that's going to take a long time, and I don't think we should be basing any decisions in the short term that we need to make based on some possible idea. I also know we're waiting to hear from Gold Belt, but this direction tonight will allow that because we're got to start with an ordinance before we actually terminate. So I'll object to the amendment even though, you know, I understand where it's coming from.

Miss Hughes-Candice, then Mr. Kelly.

Uh, thanks, Madam Chair. I guess I'm going to restate what I heard you say to see, you know, sometimes we all are thinking about something from a different angle, or I hear it with different ears maybe than another member. So when I made my original motion, my assumption was that the Eagle Crest board is going to continue to do that anyway, because I was slightly wrong on what direction we'd given them at the joint meeting.

The work that staff would be doing to get out of the RSA, to end the agreement, to end the project— none of that would be affected by what they were doing. Correct. You are correct. Okay, thank you.

Mr. Kelly.

Thank you. Um, I guess this might be— I'm just objecting for the purposes of a question, and this would be for whether or not the, the mayor's amendment passes.

Assuming that it passes or not, when would an ordinance be introduced?

Um, because the direction in the amendment— the direction that is being given is to introduce an ordinance. Uh, I think that, uh, I would work with the city attorney to introduce an ordinance and then refer it to committee with a title that's broad enough to give you a lot of options, because I appreciate that a lot of the conversation still needs to happen, a, with what Gold Belt A, may or may not be willing to do, and B, with how we would come up with the funds to terminate that RSA. So in order to maintain that, that speed, we would introduce an ordinance on April 15th and then refer it to committee. Are you maintaining your objection?

I'll withdraw my objection. I'm sorry, I have my multiple meeting dates confused. April 6th is the assembly meeting.

You can't do it by April 6th. April 15th is a listening session. Um, so from a scheduling perspective— from a scheduling perspective, we could introduce it at a special meeting. Sorry.

And we would have to work with the attorney to see if it's appropriate, but there is a special meeting scheduled for Wednesday, April 29th, as a budget hearing. And I don't— we would have to work with the clerk and the attorney to see if it's appropriate to introduce an ordinance at that time or not, but it is already on the schedule as a special assembly meeting that night.

All right, we have a motion and we have an amendment, and we have an objection to that amendment. Miss Wendell, will you call roll?

Thank you, Chair Wall. I will repeat the original motion as amended, and then state the current amendment. The original motion as amended is to direct staff to end the project and draft an ordinance repaying Gold Belt and ending the RSA agreement, amended to also include direction to staff to investigate ending the RSA agreement while exercising all options of compensation besides strictly cash.

Mayor Walden's amendment is to add at the end of that motion and ask Eagle Crest Board to continue searching for other project investors. Mayor Walden.

Yes.

Assemblymember Smith. Yes. Assemblymember Steininger. Yes. Assemblymember Hall.

Yes. Assemblymember Atkisson. Yes. Assemblymember Hughes-Candies. Yes.

Assemblymember Brooks. Yes. Assemblymember Kelly. Yes. Chair Wall.

No. Motion passes, 8 ayes, 1 nay. That brings us back to the motion as amended. Do we have objections? Mr. Smith.

Thanks, Madam Chair. Um, still objection, but, um, I guess I have objection for purpose of a question. I wanted to understand what, what staff would do with if this motion were to pass, how that would affect things. Like, would they tell the construction manager, general contractor to like just totally stop, like don't work on project refinement? Anyway, I just want to hear what, what staff, including Mr. Dahl, how they would interpret this, what this motion would do to anything they have ongoing.

Thank you for that question. Um, so it would include terminate, uh, terminating, um, any continuing work on the project, including cost estimating, design work, um, and those things that were itemized in Mr. Dahl's presentation. What it would not do is sell the cars, uh, the gondola cars or the gondola parts. Um, so it, it really doesn't do much different than what we're doing now. I guess is, is it's a pause and a stop feel very similar.

Um, I think the most important part of this amendment is the direction to terminate the RSA. Is that helpful?

It is. I guess for me, the construction manager— maybe it's not for anyone else— the construction manager general contractor work that's ongoing that they, you know, needed more time to refine is important. And that's why I think, you know, if I could— that's why I'll continue to oppose the motion, because I actually, you know, I don't see that it's allowing for some of that, you know, critical work to continue, like that— the refined, um, the refined estimate there. Um, so, uh, I, I— so that's where I'm like, that's where I see the project. That's why I think I appreciated the, this, the proposed motion in the end of the packet, and I'll continue to oppose this one.

Thanks.

Okay, okay, got it. Mr. Brooks. Thank you, Madam Chair. Um, and this is just an objection for a question, but then I'll remove the objection. Um, you know, we're when we talk about stopping the project, you know, that's CBJ stopping their involvement, and that is just a placeholder for, is this something that should be put on the shoulders of the taxpayer?

Should it be the taxpayer's responsibility to try and make this project work, or do we let someone else come in and try and make it work? So just because we as the CBJ might not want to be involved anymore, I don't think that that buries the project completely for anyone else who might want to come in and get involved later on. So I just wanted to clarify that, and I'll remove my objection.

Thank you, Mr. Brooks. Um, Mayor Weldon.

I was going to object for purposes of a question also. Um, not that I'm expecting this, but if Gold Belt would come with a a great idea or a change in the RSA. This is a question for, um, Madam Manager. How would that affect what we're doing now?

Thank you for that question. I think that this amendment— or I'm sorry, this direction— should really be thought of as getting the ball rolling on getting out of the RSA, but still leaving you room to have that conversation in committee after it's introduced, and of course, have the public testimony. It, it really is just doing the legwork to head in that direction. It's, you know how legislation works, right? You have to introduce it, you're going to talk about it, you're going to take public testimony, and it's an iterative process.

So I, um, I don't— it certainly accelerates that timeline because we would be introduced something as soon as possible. But it doesn't preclude a different direction, um, from happening in between, you know, introduction and final passage. Does that help?

Yes, thanks. Ms. Hall? Yeah, and I'm, I'm going to object to the motion. I feel that this is premature because we don't have all the information yet, and for that reason I'm going to object. Thank you, Miss Atkinson.

Thank you, Madam Chair. I, I do agree with previous speakers that this would be premature if we were voting to end the RSA today. What we are voting on right now is whether to have staff do the legwork to draw up the ordinance, and we can vote against the ordinance if we want to. We can delay the ordinance if we want to. We do not have to stick to a rigid timeline, nor do we have to stick with this course of action.

But if we don't have staff draft up, we cannot end the RSA, and I would like the ability to end the RSA because it is costing the city a lot of money with currently at the moment, not a ton of benefit. I don't see this as a final decision at all. I feel like we're thinking of it as a very, oh, this is the end, and it really isn't. It's just leaving our options open and in terms of ending the RSA. So reminder that we can vote it down or table it or all those things.

We've done it many times before. For.

I'm gonna use my opportunity to speak now in support of this motion. Um, I mean, for so many reasons. If, if we could end it today, I would. Um, I— Mr. Steininger did a good job talking about kind of why he wants to believe that we could get somewhere differently than where we are today. And I will tell you, as someone who's been involved in this for 5 years, I've been hearing, you know, people hoping for something different for Eagle Crest this whole time.

And I didn't have a lot of trust to begin with, given where we started this project. I have a lot less trust now. And I think the public feels similarly. They're not going to give us another opportunity to figure out how this project works. You know, if there are investors out there that want to make this work for them and keep Eagle Crest in our community, I'm open to that.

But we will— we have to stop this current situation we're in of losing money for a project that will not pencil out in its current form. Thank you, Mr. Kelly. Thank you. I think I haven't been involved nearly as long as the chair. I think I feel much along the same lines as Miss Atkinson.

I would be certainly interested in hearing if there is a proposal that would be— that would blow me away from Gold Belt, that, that could change my mind, but I feel like we took a gamble a few years ago. I think that we should stop, stop putting money into the slot machine.

Um, that's kind of where I feel at this moment. But if there's some way that we can guarantee that there's going to be no further cost explosions on this and guarantee that this is going to benefit the community, benefit Eagle Crest, then I could, I could change my mind and vote against the final ordinance. But I think at this moment, I, I don't think we have very much in the way of funds to spare. I think that this motion, as it's been amended, keeps our options open, as Miss Atkinson said. And so I am, I am interested.

I will speak in support of this motion. Thank you.

Miss Hughes-Gandy. Thank you, Madam Chair. Others have spoken to aspects of why I made this motion, so I'll keep it relatively brief. Um, I think we are at a place— maybe one thing I haven't heard is just when we're looking at these costs is the context of where we find ourselves today, uh, the context for all of our budget decisions since the two ballot initiatives passed. And that changes the stakes of what was always a risky project that always needed additional information and, um, was characterized by the managers, you know, lots of decision points that probably that factors into it, at least partly, people making decisions based on the best information they had at the time.

I can say that continuing to wait, whether it's for the 30th for a different number from the CMG, whether it's, you know, Friday from Gold Belt, all the, the Gold Belt and whatever the Eagle Crest board, if they end up talking to anyone, those things will still happen. But it is so vital that we start the city process, knowing the length of time the city process takes to stop the bleeding and stop what is a very, to me, classic textbook sunk cost fallacy. That if we just keep tunneling down, you know, it gets more and more tempting. That's how you get into those situations because It feels terrible to waste money and not get to the project, but at a certain point we have to stop spending money to try to do whatever it takes to see the project be successful. I think when we're con— the decisions we made at the retreat about how much money we're going to cut in this year's budget process, how much money we ask the manager's office to find through revenue assumptions and things like that, that when I keep all of those in the forefront of my mind, I just absolutely cannot justify not moving decisively to end this and to end this compounding interest.

Um, and I think that that's something that the community expects of us. So that's why I made the motion and why I'll be voting yes.

All right, we have a motion that's been amended, and we have objection. Miss Wendell, will you call roll? Thank you, Chair Wall. On the motion as amended to direct staff to end the project and draft an ordinance repaying Gold Belt and ending the RSA agreement, while also directing staff to investigate getting out of the RSA while exercising all options of compensation besides strictly cash, and ask the Eagle Crest board to continue searching for other project investors. Assemblymember Hughes-Scandies?

Yes. Assemblymember Smith? No. Assemblymember Kelly? Yes.

Assemblymember Hall? Nope. Assemblymember Atkisson? Yes. Mayor Walden.

Yes.

Assemblymember Brooks. Yes. Assemblymember Steininger. No. Chair Wall.

Yes. The motion as amended passes 6 ayes, 3 nays.

Um, Ms. Hughes-Scandies, another related motion. Thank you, Madam Chair. We'll see how this one goes. This one may not go the same. Um, my second motion would be to direct staff to schedule this as quickly as possible, utilizing special assembly meetings.

Objections from the group? Mayor Weldon?

Oh, although you're on mute, we cannot hear you. I said I'm going to object to this, um, because we just said the process will take some time, and trying to speed up that timeline I don't think is fair. To Eagle Crest, and it's still— I'm still trying to wrap my mind around it anyway.

Any other comments? I'll speak in favor of this motion. Um, every, every minute we wait is, um, uh, you know, more, more costs out the window, so I'm happy to speed this along. Mr. Kelly, just objecting for the purposes of a question.

So if I, if I understood your response to my question earlier, the earliest we would be, given what Ms. Hughes-Gandhis has moved, the earliest we'll be able to introduce this would be April 29th. Um, a, a question I would have for the maker of the motion: is your intent to have a special meeting scheduled or use meetings that are already on the books, such as the special meeting on the 29th. Can I have a quick— please talk to Seth.

All right, I'm gonna bring us back. Um, Miss Hughes-Candee's Do you have a motion? Thank you, Madam Chair. I have a revised motion, uh, and taking into consideration the comments of members while I was trying to find those dates. So my motion would be to intro on the 29th, direct staff to intro on the 29th, talk about it on the 4th.

This is May at Cal, and then, uh, public hearing would be on the 18th. May 19th. Any objections to that timeline?

Mr. Steininger?

I object for a question. Um, uh, so the effect of our last amendment— so Mr. Dahl had spoken to the CMGC contractor still working on refining the $27 million number. The effect of our last motion is that they will stop that work. Is that correct? Assemblymember Steininger, may I ask a question of Director Koch?

Um, I believe that the work, uh, that was done in the work to get to this this guaranteed maximum price was included for $0 by the GCCM. So I, I think we could proceed with getting that. It's not very— it's a bit disingenuous if we're not going to proceed with the project, but it's my understanding that that, that is at no cost, and Director Koch is nodding her head. So yeah, yes, we could proceed with getting that information. And then I guess follow-up, would we have that information before we taking action for discussion at the Committee of the Whole meeting that was referenced by Ms. Hughes-Candies?

It is my understanding that is scheduled for April 30th, so yes, the date that we are, uh, we are scheduled to get the refined cost estimate is April 30th. Looking for the heads nodding in the audience. All right, I am—. Are you maintaining your objection?

I, I would like to because I feel like we're moving hastily at a time when we don't necessarily need to, but I'll remove my objection. I know where the vote will go.

Mr. Brooks, do you have an objection?

Yes, I'll object for the purpose of a question. Uh, it's even though there's still a cost refinement from the contractor, we are at 100% design. So even if that contractor doesn't end up being the one that executes the project, there will be 100% complete design for any other contractor. To come in on.

You are correct. I'll remove my objection. Mayor Walden, do you have an objection?

Yes, I'll maintain my objection. All right, we have a motion and we have an objection. Miss Wendell?

On the motion to direct staff to introduce the ordinance at the special assembly meeting on April 29th, discuss the ordinance at the May 4th Committee of the Whole meeting, and have public hearing at the regular assembly meeting on May 18th. Assemblymember Hughes-Scandies? Yes. Mayor Weldon?

No.

Assemblymember Smith? No.

Assemblymember Kelly. Yes. Assemblymember Hall. Nope. Assemblymember Atkisson.

Yes. Assemblymember Brooks. Yes. Assemblymember Steininger. No.

Chair Wall.

Yes. Motion passes 5 ayes, 4 nays.

All right.

Not seeing any other motions on this item. I'm gonna have us take a break. We are gonna come back to talk about the second memo associated with this item, so we can take a 10-minute break.

All right, bringing us back. We are still on agenda topic number 3, um, and, uh, given that decision, um, we wanted to have something here to recognize the fact that, um, Eagle Crest has presented a budget that, you know, some of the assumptions in may change, and so we may want to start moving towards, you know, provide direction to a different budget given those changes. Miss Flick, I'll let you give you a little overview here. Thank you, Chair Wall. Um, the purpose of the memo that's on page 20 of your packet is, um, really to accomplish a few things and truly to set the stage for discussion, direction, or not, as the body chooses.

Um, last year a decision was made with respect to the Eagle Crest budget that, um, that we, uh, we agreed in a couple of assumptions, and it was that the city should be in the business of operating a year-round mountain recreation area, and that Eagle Crest would be profitable, for lack of a better word, in the near future. Such that we could accept a deficit in FY26 as part of an economic cycle from which Eagle Crest had a trajectory to come out. And that trajectory was based on the gondola coming to fruition and that operation starting in May of '28. With that decision, about $2.5 million was recognized as a deficit. The—.

We are required, if we allow an operation to be in deficit, to reserve those funds. And so that reservation was made through the restricted budget reserve. So having had the conversation and the motion that, that just happened, which is to stop the gondola project as a CBJ project and to to create an ordinance to settle out the RSA. Um, it is likely a question to follow is, so what does that mean as far as our assumptions go? Is Eagle Crest still on a trajectory of profitability in the near future where the body feels comfortable allowing a deficit to happen in the '27 budget?

So the budget that the Eagle Crest board approved and is included in the manager's proposed budget also has a deficit similar to last year. So if it rolls forward as presented, um, there would be— need to be another reservation of funds on top of what exists already from last year in order to allow that to happen. So what you have at the bottom of page 20 and the top of page 21 are really some options for you to consider to decide if you want to do anything in light of the conversation that you just had. So, one of the things that you could do is make no change. Don't ask the Eagle Crest board to do anything or present anything new and go forward with the budget as presented in the manager's proposed budget, which includes a deficit.

And deal with either a deficit subsidy, or you could ask Eagle Crest Board not to change anything and make an agreement that those assumptions are no longer valid. And so really a general fund subsidy rather than a deficit is required to let Eagle Crest operate at the budget as approved by the Eagle Crest board. So that's kind of one end of the spectrum. The far other end of the spectrum is to say we need to figure out how to close down operations and give the Eagle Crest board a timeline to present what that transition plan looks like, whether it's FY26, FY27, FY28. That, that would be up to you.

And then in the middle of that is an infinite number of possibilities. You could ask the Eagle Crest Board to revise their budget for '27 to make a reduction either by a, a dollar value or by a percentage to their operating budget as proposed. You could request that the Eagle Crest Board come back with a new version of the '27 budget that has their expenses only equaling what Eagle Crest can generate as revenue and decide whether that includes the roughly $930,000 general fund subsidy that's been kind of status quo for a number of years. You could ask them to come back to prepare a budget that accomplishes something, fill in the blank— operate only on the weekend, only do these kinds of things, only do those kinds of things, um, you know, whatever whatever you feel is appropriate. If you want to give that direction, um, you can also direct the Eagle Crest board to come back with a different financial sustainability model.

We've been hyperfocused on a gondola. There could be other options, models, investment opportunities out there. Um, and you know what's out there, what can we pursue and turn around relatively quickly? Because if, if that's a path we're going to go down and maintain kind of a status quo budget for them, that requires that general fund subsidy for the time it takes to get something else in place. So those are some options for you to discuss and consider.

I put a couple of other things into the memo, partly because I don't know how much is common knowledge or not. We often hear, why don't you just sell Eagle Crest? We can't. The underlying ground that Eagle Crest sits upon is land water conservation land. It's not something that can be sold to a private entity.

We could, however, um, outsource with another organization to run the operations, whether that be an investment group that also comes in and does operations, whether that be a nonprofit. There's, you know, 100 ways that could look. That other entity could decide that a gondola is a great idea. They could decide, you know, we'd rather do something else, and they would, you know, with whatever agreement we would make with that other entity, you know, provide parameters or guidelines, but they would have to go through all the normal permitting process and things to accomplish something else, whether it's is, you know, building a new lodge or building a roller coaster on the side of the mountain. I don't know, whatever, you know, was decided upon.

Certainly the gondola parts and pieces that we've, as we've heard tonight, have value. And so it may be that, you know, with some sort of a different investment or arrangement, those parts and pieces become part of an agreement. That go to that third party, or maybe they don't and we need to look at offloading those on our own. Um, if I do think it is important to recognize that, um, if, if we're not going to look to another financial— financially sustainable plan for Eagle Crest, then the deficit model and reserve doesn't really make sense, you can still do that. You have that authority, that ability to make that decision, but it, it would probably be prudent to, um, direct staff to go ahead and prepare an ordinance to do the fund transfer from the general fund restricted budget reserve or another source to the Eagle Crest Fund to make it not at a deficit for FY26's operation.

And, um, certainly, uh, running a deficit into the future if we don't have that kind of, uh, economic life cycle that says there's a path upward financially, um, we should consider a deficit model with, with great care and, um, and caution. So, um, that's basically what's laid out in the memo. Um, truly, it's to set the stage for discussion and provide this body an opportunity to ask the Eagle Crest board to do something different or, or not.

Thank you, Miss Flick. Just to say that in a slightly different way, we don't have to make decisions about the Eagle Crest budget tonight. We just have to, if we want people to do work on something other than what is going to come for us for a decision in not too much long time to provide that direction tonight. Um, with that, any questions? Um, Mayor Weldon, then Miss Hughes-Kindies.

Thank you, Madam Chair. Um, Director Flick, you skipped over 2D. What did you mean by the do the above with or without review input from the manager's office? Thank you, Mayor Weldon. Um, as a body, you could direct the Eagle Crest board to go come up with a percentage or dollar reduction to figure out their budget within the revenue they have, or to accomplish X, Y, or Z, whatever that is.

And you could have them just do that on their own and bring something back to this body, or you could direct them to work with the manager's office. So similarly to the discussion about Um, meeting with Gondola, the direction— or meeting with Goldbelt about the Gondola, the direction that you gave was the manager's office and the Eagle Crest board together work through that. So you could provide direction to have the Eagle Crest board work with the manager's office to accomplish any of these budget changes, um, if that's your desire.

Miss Hughes-Gandis.

Thanks, Madam Chair. Ms. Flick, I just want to make sure I'm thinking about letting a fund go deficit the right way. When we let the Eagle Crest budget have that deficit, we held real money in the reserve really off limits, so as good as spent, but it is still there.

When COVID happened, we did something similar with the hotel bed tax. We let that go negative. I think that's the one we let go negative, and when the cruise ships returned we put outside money into that fund, bringing it to zero. So based on my understanding, there's no— there's nothing— there's not an outside source in this case. No one's returning.

There's not this external factor. This just— let's say this isn't happening, then by moving from general fund to reserve that's paying that back, but it's all internal. Is that correct so far? Yes, that's correct. So there is real money in the restricted budget reserve that's being held from reporting perspective.

When we tell you what your available balance is, we've taken that out as if it's spent, um, but that would be an internal transfer of funds, um, to resolve the deficit in the Eagle Crest Fund if you decide to go that route. Okay, and I guess as a follow-up then, walk me through the obvious reason why, because it's a debt to ourselves from the accounting perspective why that— why we can't forgive the debt to ourselves or treat it as bad debt that we're never gonna get. That's correct. So, um, funds, um, so from a budget perspective, we planned to spend funds. So let's assume all of that expense happens.

We have actually sent cash out the door. So if you think of a fund as a checking account, that checking account is overdrawn, and that is all of the payments that were made from that fund are good because we've set aside cash in another place to, to make those payments good. And so we need to, we need to resolve that fund's negative position. And so a transfer from the general fund, it could be from another source, but, um, you know, the thought process in, in allowing it to be deficit is that in the future revenues would be higher than expenses, and that, that negative balance would get smaller and smaller until it turned positive. And so if, if the decision is we don't have that path and we, we really just need to make it whole, and if we're going to continue operations that are above revenue that comes in, that needs to be covered with an operating subsidy, um, then yeah, we would just do that transfer because the funds all exist within Central Treasury.

Thank you.

Mayor Weldon.

Uh, thank you. I had a different question, but Ms. Hughscandy's, uh, made me think of something along that line. So right now we have a deficit. Can we give— keep that deficit for a little while while we wait to see if Eagle Crest can get anything else going, or do we have to pay it back this year?

That's a great question, Mayor Weldon. You can continue to, um, reserve general fund dollars to cover the deficit and allow Eagle Crest, um, and the board time to come up with a solution that gives them financial sustainability going forward. Um, the time frame in which you allow that to happen is at your discretion as the assembly.

Mr. Brooks.

Thank you, Madam Chair. So, are, are you looking essentially for, you know, the refinement of assumptions and then just breaking into a little detail on the assumptions? Because, I mean, the one that we know for sure is the least likely is the Eelcrest will be profitable in the near future. That one became— was tied heavily to the gondola. But the CBJ should be in the business of operating year-round mountain recreation area, you know, having still a strong focus on that and seeing, you know, if there's any possibility of getting less, uh, involved or lower capital investments that can start generating returns, things like campground mountain bike trails, making more events up there that don't necessarily require a bunch of infrastructure, but could start bringing things in.

What would it look like necessarily as far as the type of, um, direction? You know, would that be a direction for the Eagle Crest board to start pursuing those, you know, smaller revenue streams, or Thank you, Mr. Brooks. I think that, um, as you've described, um, it would sound like the direction you would want to give the Eagle Crest board is something, um, like, uh, the option number 3 that I, I listed out there, which is to have them come, come back with a model to be financially sustainable rather quickly. And quickly is nebulous.

That's not specific, um, but that would then present you as the Assembly Finance Committee and this assembly, um, the confidence or the decision point of, yes, this plan that's presented is sustainable and something that we can support and make that decision of, is, is a deficit appropriate, or do we need to do a general fund subsidy, or do we need to do something else. So, um, I, I'm not necessarily asking you to make a decision on the assumptions. The assumptions were the, the basis upon which we set a deficit last year was acceptable, and certainly based on the prior conversation, um, that, that confidence in a profitability in the short term could be in question. And so it's this is your opportunity to talk about if you would like to see something else, more information. Um, not to jump too much ahead on our agenda, but when we look at our budget calendar, one of the things that, um, working with Chair Wall, we recognized we didn't have an opportunity already scheduled to come back and talk about the Eagle Crest budget because it is something that we would want you to affirm, that we want the deficit, all of those things.

And so we have scheduled that for an April 29th AFC meeting conversation, you know, topic at least tentatively planned for that night. And so really, I think the question before you as a body tonight is, do you want the Eagle Crest board and/or the manager's office to prepare anything for you to consider differently for the FY27 budget?

Thank you. And I, I guess it'd be a question for my fellow members and even city staff. Can, can we ask the board chair, you know, what their thought is on any, or any member of the Eagle Crest board, what their thought might be on any of these options?

Mr. Brooks. I—. Oof.

Yes, of course we want their feedback. I'm not sure they'll be ready to do that for us right now.

But we could give them direction to come back with some feedback for us. I think that would make the most sense.

Yeah, I mean, they—. Yes, I'm— and I'm sure they will. Um, Miss Hall, are we ready for a motion? No? Okay, we'll let the mayor go.

Um, I have Mr. Kelly first and then Mayor Weldon.

Thank you. Um, I, I would be curious to hear, uh, Miss Hall's motion. I think I, I know how I would act, but I am also sitting back and listening to the rest of the assembly. I think the way I'm leaning towards is that I would want to direct Eagle Crest basically option number 3, so direct the board to come up with another financial system. Mr. Kelly, do you have a question?

No. Is that where we are? I'm sorry. Yeah, we, we are asking questions. I just, I don't I don't want anyone to jump into this before we—.

I understood. I'll save it then. Mayor Weldon, do you have a question? Of course I do. And I'm assuming this is possible, but I am wondering if we can mix 2 and 3.

For instance, just totally for instance, we asked them to come back with a revised budget with our general fund subsidy and also a different financial sustainability model that can be implemented quickly? Because I, I, it seems to me that they could kind of blend them because there's some things they could do pretty quickly, like a ropes course or Crockley Lake Polar Plunge or things like that that might give them more revenue. So I'm assuming, Director, uh, Flick, that we can mix those. Madam Mayor, you can do any variety of direction to the ELCRES board that you would like. Just raise your hand, Miss Hall.

I, I I did ask Miss Youskandis to be ready for a motion. You raised your hand first, and so you can be the first one to make the motion since she did not raise her hand. I—. No, no, no, no, no, I, I, I agree, but Miss Hall, if you— I can't tell if you want to make a motion or not, so I'm giving you an out if you do not want to. Go ahead, give it a stab.

Um, I move that we direct the Eagle Crest board to present a different financial sustainability model, um, with review input from the manager's office, and also explore the possibility of a revenue bond and ask for unanimous consent. Miss Atkinson, sorry, before I make a comment, um, did you say revenue bond? Okay, I'm going to make a comment then. Uh, I object to that. We're already putting Eagle Crest in a position where they are uncertain about future profitability, and they are in deficit.

I do not think we should be moving forward with more debt under that situation. Ms. Yaskandis. Thank you, Madam Chair. I am going to speak not in strong opposition as if, uh, This is— I don't think in itself that that's the worst direction to the Eagle Crest board. My objection to that idea, or that direction to them, comes more from a timing perspective.

So we've said in our last action that Eagle Crest board can go nuts trying to find an outside investor, which is probably largely on their minds until the gondola piece plays out, until that resolves fully. So, and, and also I've made my own desire, uh, clear to get out of the gondola. It's hard because these two things, we've made them linked, but they deserve consideration on their own. Gondola is this separate thing that got attached to Eagle Crest. And at the end of the day, what is a much harder question for me, and what is a much more concerning problem, is how we keep Eagle Crest funded in light of these deep budget cuts we're going to have to make.

And so I think the more that we ask them to look for the next— throw a dart at the next thing that's going to be their savior.

I don't know that that's— I think that's going down the wrong road. I think we have to decide, kind of building from the ground up, do we have funding for Eagle Crest, just city funding, in a way that's been historical, uh, in a way that's the general fund subsidy? Um, because of that, just knowing how long it takes to do something and knowing that if I ask Eagle Crest Board to do 5 things, either the work is going to be less good because they're only human and they got to split their time then by 20%. I won't belabor the point, but all of that to say, I would rather, because we have to make a decision on their budget. I would rather see them focus by giving us good input on their budget based on what amount that I think I personally would be willing to subsidize them at.

So, because then that may influence— we may say, build us a budget at this subsidy level, and then the budget we get back from them may be, you know, disastrous, not because it's bad work, but because, you know, they come back and say, oh, well, then we're closing down the mountain, or, you know, any number of outcomes where they show us just a really bare bones, cut services by 20%, and this, you know, we won't be open on these days, but we could just do meat and potatoes like that. Um, anyway, that's a very long way to say I favor one of the other options, so I'm going to object to that direction.

I have Mayor Weldon, Mr. Steininger, and Mr. Smith. Go ahead, Mayor Weldon. Uh, thank you, Madam Chair. This is where I'm going to combine the two of them, and I'm sorry, Eagle Crest Board, because I know you're volunteers and you have limited time. So I like the motion.

I'll deal with one other part of it that I don't like, which is the revenue bonds. But I would say, and at the same time submit a revised budget with a normal general fund subsidy.

I'll just ask for maybe clarity, um, staff interpretation. Normal—. Normal Eagle Crest subsidy, will you just repeat what that amount is that we have been giving? Not giving, that this community has been supporting Eagle Crest operations at for the last few years. Thank you, Chair Wall.

In the normal operating budget, there is $930,000 of general fund subsidy that has been an ongoing subsidy for Eagle Crest operations. So, um, my interpretation of the mayor's amendment is to have Eagle Crest, um, present an expenditure budget that, um, that is covered by the revenue they generate plus the $930,000 of general fund subsidy.

All right, objections to the amendment? I see Mr. Smith and then Miss Huskandis.

Thanks, Madam Chair. I, I appreciate the motion and the amendment. I I just have to say, last year, as we tried to help Eagle Crest become more self-sufficient and be able to staff the mountain, we increased and moved them to a different wage scale. I mean, and yes, it was at a request of them to do the staffing. And a $900,000, you know, subsidy won't cut the mustard up there.

Like, I don't know exactly what that number is, but I just— it can't— that number won't— it just has to be more, in my opinion. I get we're in a tough time, but we also just made a very significant quick decision on the gondola project. And I, you know, I think this subsidy amount has to be more. I'd almost say have to be twice as much. I know that's very challenging for us to look at, um, in this fiscal environment.

But to give, you know, the ski community and the— and well, also just anybody who's even thinking about trying to operate or take over Eagle Crest, it seems like if we cut it off at the knees, it's going to lead to issues and to a point where it just— it couldn't effectively run in FY27 and therefore you know, may not be a, um, wouldn't be an enticing opportunity for, for someone to pick it up. So I think we need to increase that, um, amount. Um, I don't think I can amend an amendment, so I think I would— I mean, I, or can I, can I change that amount? I believe you can amend an amendment once. Was that So you could amend an amendment.

No one can amend your amendment. Okay, I will amend the amendment to say a 2, you know, that they come back and develop a budget, an FY27 budget with a $2 million general fund subsidy. Now we can see what that looks like, and if it doesn't seem— if it's— anyway, we can look at what it looks like, but to me that's I think that'd be a better place to start just because we have increased their costs significantly with— anyway, the cost of operating Eagle Crest are much higher than they were previously when we were giving them $900,000. So that would be my— that would be my motion. It's a place to start, or—.

Objections to the amendment to the amendment? Actually, Madam Chair, can I? Yep, go ahead, Mr. Smith. Maybe I can make it an and so that they come back with it, what it looks like in a $900,000 subsidy as well as a $2 million subsidy. And we can, because I don't think, I don't think, I don't think $900,000 is enough.

But, you know, I don't want to, I don't want to, who knows, maybe. Can I ask a clarifying question? Yours would ask them to put together a financial sustainable, long-term financial sustainability model and a budget at 2 different levels, 2 new budgets at 2 different levels. I realize that's—. And a revenue bond.

We, I mean, we could vote on the first thing first and try these, you know, as separate ones. You can make the motion you want. I just—. Yeah, I hear you, Madam Chair. You know what, I'm going to try to amend it to make it a $2 million general fund subsidy, and we can see where we go from there.

Okay, so, um, are we— we have an amendment to an amendment, which— yes, clarity. The revenue bond was just a suggestion to consider as part of the financial sustainability. It wasn't with— yeah, so it's, uh, just thinking outside the box a little bit.

Okay, so Mr. Smith's amendment to the amendment would change the suggested amount of the Eagle Crest subsidy from $900,000 approximately to $2 million. I saw an objection from Ms. Hughes-Candice. Thank you, Madam Chair. I had my hand up for an objection to Mayor Weldon's Weldon's amendment, and I have an objection to Mr. Smith's amendment to the amendment as well, so I'll just speak to that one right now. And it's similar in nature to what I would have said to Ms. Weldon's amendment, which is we also have the ability to make multiple motions and see if they succeed or fail.

So I—. With our last one, we certainly made it we just kept adding limbs to it. I would just say, for me as a member deciding to vote on this, it would— I think it would be a little cleaner if we took votes on these different things, which seem to be going in different directions. But I appreciate that this, to me, reads more like a traditional amendment, Mr. Smith, that you were just trying to increase the dollar amount. And to that, I would say, given the fiscal situation that we are in, and that we are looking— that we're going to come to that first meeting with $2 million in cuts, uh, at a minimum, I— basing that on a $2 million subsidy while we're also contemplating the where we will find the funds to get out of a revenue sharing agreement.

I feel like I'm kind of in a different reality, so I will be voting against the amendment to the amendment.

Mr. Steininger. Um, I have a comment. First, a clarifying question. What I thought I heard Mr. Smith's amendment to the amendment was to get two different budgets, a million dollar and $2 million, or did we clarify that? Mr. Smith, I believe he decided not to do that and is just changing the $900,000 to $2 million.

Is that correct, Mr. Smith? Yes. Yeah. Okay, well then I'll support that.

All right, we have a motion, we have an amendment, and then we have an amendment to the amendment. And we have objection. Ms. Wendell, maybe you'll repeat where we are and then we can vote. Oh, actually, I would like to speak to this. I forgot I get to do that sometimes.

Um, I will object to this amendment to the amendment, um, for many of the same reasons as Ms. Hughes-Scandies. Um, this is not because, you know, we, we all, um, hoped the gondola would be a ticket out of this situation, um, uh, and it's not. That being said, what to me really is driving my decision here, um, to ask the board to come back with us, to us with some options, um, is because a lot changed last October. We do— we have to cut $10 to $12 million a year from our budget, and I don't know in what world I could justify giving Eagle Crest an increase in the amount, a significant increase in the amount of money, um, when we are going to be looking at significant cuts, um, to other programs.

All right, with that, now Miss Wendell. Thank you, Chair Wall. The original motion was to direct the Eagle Crest Board to present a different financial sustainability model with review input from the manager's office, and also explore the possibility of a revenue bond. The first amendment by Mayor Weldon was to amend the original motion to, um, ask the Eagle Crest Board to present an expenditure budget that is covered by the revenue they generate plus the $930,000 general fund subsidy. Assemblymember Smith's amendment to that amendment would be to increase the general fund subsidy from $930,000 to $2 million.

Assemblymember Smith? Yes. Assemblymember Hughes-Scandies? No. Assemblymember Atkisson?

No. Assemblymember Brooks? No. Assemblymember Hall. Yes.

Mayor Weldon. Yes.

Assemblymember Steininger. Yes. Assemblymember Kelly. No. Chair Wall.

No. The amendment to the amendment fails for ayes 5 nays.

Okay, this brings us back to an amended motion— I mean, amended— this brings us back to an amended amendment. So now we have a motion with an amendment. Um, do we have objections to the amendment? Miss, Miss Atkinson? Uh, thank you, Chair Wall.

I actually am speaking in support of this. I agree that this motion is probably too much for me to want to vote on all at once, but we can always divide the question after. And so I am going to be in support of this moment.

Do we have objections to this? Miss Hughes-Caniz. Thank you, Madam Chair. Uh, I hear the amendment and the content of it and what we are asking Eagle Crest to do with it, and it's hard for me to see how that is an amendment on the original motion. And like I said, it feels like stapling another motion on the back of the original motion, and I don't like the original motion.

The second one I like more, but I don't see the sense, and I don't believe the maker of the amendment has, um, made a case for why this amendment makes sense. And then I would go back to the fact that if we are making a decision on what we're doing with the revenue agreement and what we are doing with the gondola and we know what those dates are, and we know what the Eagle Crest board has on its plate. To continue to stack things onto their plate, I don't think is the best way forward for us right now. So I'm going to object.

I will also remind people, if we don't get where we want to get as a body, we can, you know, try again. So I know this is complex with the loading on of amendments. Mr. Steininger. Um, I'll object because, you know, basically if this amendment passed, what we'd be getting is kind of— we'd have sort of two different Eagle Crest budgets on our plate. We'd have the budget that they gave us and a budget that cut, looks like, 35% of their expenditure budget, I think, if they had to— excuse me— if they had to knock $2 million off, if I'm doing that math correct.

So we'd have status quo and fairly draconian budget reductions, and I don't know that we can make a rational choice just with those two options on the table. So I'll object to this amendment.

Um, I'll speak in favor of this amendment. I'm, I'm with Miss Atkinson that I don't, you know, agree with some parts of this, and we can handle that with other people agree after this amendment passes. But I think to Mr. Steininger's point, um, this we need a starting place for this discussion. And I'm not— if I vote for, you know, them bringing back a status quo budget for what the city would be spending, it's because I need to know what that looks like before I make other decisions.

Okay. Any Further comments on the amendment? Miss Yuskandis, uh, just a clarification, Madam Chair, because I'm getting a little lost in the circle. So this, based on the last vote, this is a $930 budget, is that— or sorry, $930,000 subsidy budget, is that correct? Correct.

Okay. Thank you, Mr. Smith.

Thanks, Madam Chair. I share Mr. Saniger's sentiment in that we're— it's going to be draconian or status quo, and we need something in between. So, um, I mean, and, you know, excuse me, status quo is not— I mean, that's with, you know, a $2.5 million, you know, uh, uh, fund balance deficit. So, um, we need something in between. So I'm going to vote against— I'll vote against this as well.

Thanks.

Yep. Can I have a quick addies? Yes.

Um, all right, we are coming back, um, and I forget where we were at. Maybe— yes, I— we have a, um, a motion and an amendment, and we have some objection. And, and Madam Chair, may I have, um, Miss Wendell I'll read the motion with the amendment one more time. Yes.

The original motion was to direct the Eagle Crest Board to present a different financial sustainability model with review input from the manager's office, and also explore the possibility of a revenue bond. The amendment is to ask the Eagle Crest Board to present an expenditure budget that is covered by the revenue they generate plus the $930,000 general fund subsidy.

All right, we have a motion and— and we have a motion and amendment and objection. Any other comments? Miss Youskandis. Thank you, Madam Chair. I have said before I don't like the sticking of this together.

Um, but I also recognize we're all trying our best, and this is very sloppy, and we're trying to stick to the timelines that we have set before us.

I, during the addies, uh, spoke with the Eagle Crest board about what direction we've given them so far.

I think we're putting a lot on them with the direction we've given them this evening, but I recognize from hearing my fellow colleagues here that we're in a position where we will still need to make impossible decisions, and that will be coming soon, but that having more to look at is better than having less to look at, whether that seems draconian to some people or whether 2 million seems, you know, insane to me. So with that, I'll remove my objection.

So, Mr. Smith. Thank you, Madam Chair. I, I guess I just wanted to speak a little bit to, like, what I'm hoping in general to get here, which is we made a significant decision on the gondola project. You know, I don't think it's, you know, it's still set.

We're still open to seeing if there's someone else who wants to invest. I mean, it sounds like anyway. So I'm not saying that that thing and that opportunity is gone forever, but it's a significant change. We've also put Eagle Crest on a different track with that project, and now, and now there's a significant change with that project, you know, being stopped, or we're not leading on it. I guess I'm hoping to hear, and I think this amendment and the motion altogether can kind of help get us a better picture of what an operational ski area may look like, again, with, with the, with facing the financial constraints of the day, but also knowing that at least in FY27, there's no way that they can just become, you know, revenue neutral.

You know, they can be just become self-sufficient. I mean, they've been struggling forever. So we need to give them some— we need to give them some ability to recognize the current situation and try to, and try to help, you know, the current fiscal situation, but also knowing they can't move— there's no way they can move that quickly. So we need to hopefully give them a glide path or some opportunity. I think this motion with the Mayor's amendment, which I'm now going to not object to, at least can maybe provide that window and hopefully general direction for them to step back, take a moment, and say, here's what— here's how we can operate a ski area in the winter of '26 and early '27 that, you know, has reduced subsidy from the city but can still operate.

So that's what I'm hoping this, this motion kind of in general puts out for them to to try to, to try to bring us back. So I will remove my objection to the mo— to the amendment as well. And thank you, Madam Chair.

Thank you, Mr. Smith. Um, do we still have objection to the mayor's amendment?

Mr. Steininger? I, I, I had an objection, but I can see the no votes dropping off one by one. So I guess I'll remove my objection, but I'll kind of echo some of the sentiment of what Deputy Mayor Smith just said and say that, you know, just because we give this instruction to come back with a— what I think would be a very draconian reduction in operations at Eagle Crest doesn't mean that's where the final budget is going to land. You know, just to I know there's some skiers here in the audience listening and, you know, trying to decide if they're going to buy a pass next year, and I want to put together an Eagle Crest budget that lets them ski and isn't just keeping the lights on and, you know, keeping the buildings warm. So I'll remove my objection, but I, you know, I worry that we'll have two options that are too far apart with nothing to be super actionable on.

Thank you, Mr. Steininger. Okay, I don't think we have any objections. Thank you guys for working through that. Again, this is just a starting place for, for the discussion. That brings us back to the motion.

As a—. Mr. Kelly? No, I'm just getting in the queue for what you're about to say.

Okay. All right, so I don't know how to keep— make sure this is fair if you all are jumping ahead of my words. Um, that brings us back to the original motion as amended. Do we have objections? Mr. Kelly, then Mr. Steininger.

Thank you. I move that we divide the question to consider the revenue bond separately from the rest of the question.

Okay, um, so that would make two motions, uh, one that has them bring us a financial sustainability model and, and a budget with a normal subsidy, and a second question that will say, do we want to give them direction on a revenue bond? Yes. And I do not know which one I do first. I'll include it in my motion. I'll say I'd want to consider that one first, the revenue bond.

Okay, so the first question before us is, do we want to split the question? Objections to that? Miss Hall, speak to my objection. I object, and I'll speak to it. It was just— it wasn't and a revenue bond.

It was explore a different financial sustainability model that can be implemented with input review from the manager's office and could potentially include a revenue bond. So I, I don't think we need to split this necessarily because that may be something they want to consider.

Miss Atkinson. Thank you, Madam Chair. I think if you're including a thing in a motion, it's not advice, it's required. I do think saying like, and like, and one potential option being revenue bonds does put Eagle Crest in a position where they probably want to consider revenue bonds. So if we're gonna have revenue bonds in the, in the motion, I do support the division of this question.

If you'd like to drop the revenue bonds from there, and they will have heard you. Talking in this meeting about how that would be an option you would prefer, I'm fine with that too. Miss Hall, am I able to drop that at this point? I—. Well, we'd have to vote down the— we could vote down the, the, um, splitting, and then you could amend your original motion to remove, remove that.

If it makes it simpler, I'll withdraw my motion. If— okay, so that brings us back to the motion as amended. Miss Hall, would you like to make an amendment? Sure, we'll remove the revenue bond discussion and, um, leave it at that. Thank you.

Any objections to that amendment? Okay, seeing none, that brings us back to the motion as amended. Do we have objections to the motion as amended?

Seeing none, that is so moved. Mr. Steininger. All right, thank you. I was getting myself in the queue to make an amendment to the revenue bond related item, so now I'll just make that a separate motion. So I move that we provide direction to the Eagle Crest board to investigate capital improvement investments and other investments that could lead to revenue-generating opportunities, inclusive of financing options which may include revenue bonds, and present those plans at a joint meeting of the Eagle Crest Board and the Assembly no later than November of 2026.

6, And I can speak to my logic there if anybody's curious. So by effectively stopping the gondola project, you know, we have stopped the kind of prevailing plan to, you know, make a large investment to turn the corner for Eagle Crest. And I don't think they're going to be able to come in with a, like, magic new plan that totally turns the corner in the the next 4, 6 weeks. I just don't think that's feasible. It's not going to happen in this budget cycle.

This budget will probably end up being somewhat of a stopgap to get them, you know, give them room to start rethinking what the future looks like for Eagle Crest. But we don't have that much time, so we do need them to come back with something. I think coming back in November makes sense. You know, that is when we'll have a new Assembly seated after elections. You know, it is before, just barely before they ramp up and get super, super busy.

But it provides some time for us outside of the budget cycle to start thinking about these things, kind of refine some of the ideas, and then direct them to bring those back for next year's budget cycle. So it gives us room It also addresses some of the communication issues that we have talked about in the past where, you know, sometimes we get some misalignment between the Assembly and Enterprise Boards because we meet with them once a year. So it kind of provides that opportunity as well to talk about strategic vision, somewhat divorced from the budget cycle, but still kind of budget-related, and gives them a little bit of room to start thinking about these things and about what kind of investments need to be made to actually make Eagle Crest viable. And of course, maybe between now and then, somebody comes in and wants to purchase Mount— or not purchase, but, you know, take over. We have other things happen.

But I think we need to set that expectation that we have forward momentum on a plan for Eagle Crest and deadlines for when we get that information.

Objections? Ms. Hughes-Handys. Thanks, Madam Chair. So just to make sure I understand, to the maker, is it correct to say that this is separate of all this direction for them to figure out what that looks like, their capital list, bring that in November because we are committed to that for all the reasons that you just stated, that the timing is good, staying in touch is good, but it's just because we're talking about Eagle Crest right now and because the board is in the room. Is that correct?

Yes, and because we're talking about revenue generation and addressing the deficit for Eagle Crest specifically, these projects directly attempting to address revenue generation at the mountain.

So capital projects that generate revenue. Yes. Okay. Thank you.

Any objections?

Okay, seeing none, that's so moved. Um, okay, I'm gonna— it is 9 o'clock, and, um, I would say we should plan on being out of here by 10. So I'm gonna just foreshadow that we should remove FY27 passenger fee proposal from our list tonight so we can let folks go home on that, and we're going to try to move forward with the other ones.

Oh, I'm, I'm happy to take a brief fete to make a plan that works for everyone. I'm just seeing the clock. Sorry to make that unilaterally.

Um, we are going to, instead of, um, removing passenger fee proposals from our agenda, we're going to skip the CIP and do that another night. Um, and with that, we'll move to information only. Um, you have your budget calendar updated in your packet. I— what we were going to say, we're kicking off the budget process right now, and we're going to go through our agreements and other things. But given that it's late at night, we can address our agreements on another evening.

But is there anything you guys want to say about the budget calendar, Miss Flick? Um, Thank you, Chair Wall. Uh, you know, tonight really does officially kick off the budget cycle, although we've done a lot of things early this year. Um, just call your attention to the fact that on our, our published calendar for, um, you know, meetings at a glance, um, every Wednesday from now until June says AFC. Um, we are skipping next Wednesday.

So April 8th do not show up here. However, Saturday, April 11th, smiles on, 10:30 here. So we're starting a little bit later. We'll, we'll do the manager's presentation. You'll get the public engagement output, and we'll also start talking about service reductions.

The April 15th AFC is not going to be an official AFC. It's a listening session as part of our public engagement. And then, um, big, big day the following day, April 16th. Your budget reductions of up to $2 million operating, or at least $2 million operating, can be more if you would like, um, are due to me for consolidation. And again, we're going to treat this like our legislative priorities.

They will get consolidated and aggregated, and those will be presented back to you on April 22nd. All of the content listed on dates is our plan and our goal. Your, your true hard deadline for making all of your budget decisions is May 27th in this committee, so that we can take your final ordinances and resolutions to the full assembly on June 1st. The 8th. I think that's all.

Any questions on the calendar? All right, that brings us to Assembly Grants and Community Requests. So, um, normally what we would do here is, um, this is just so that we all can see what was on the community, um, grants, which, which things got sponsored, so that you all can identify any information needs you might need to make a decision on this in the future. And so no decisions tonight. This will show up in the pending list.

And so there was only one. It was mine. So I will briefly introduce it. And if there are things that you'd want to know from, you know, that staff can collect working with the partner agency or the community grant requester, you can identify that so they can bring that information back. And so I'm not going to be able to find my page in—.

Page number 23. Thank you. Just so I get all the words right.

23.

Okay, so I sponsored a request from the United Way United Way Southeast Alaska for the Voluntary Organization Assisting in Disaster Sustainability program. This was a similar request to what we saw last year. United Way is, is helping set up a VOAD to coordinate our nonprofit partners and others and how everyone can work together in assisting for disasters. They did some good work. There's still some work to do to set up the system so that it can exist in the future and help us.

And so I sponsored them for, you know, one-time grant to help finish that work, figure it out, at $20,000. So I will— I'm not going to answer questions for you guys, but if there are things you'd want to know from them in the future, now's the time to say that.

Mr. Smith. Thank you, Madam Chair. The questions I had, I guess, is it, is it realistic that just another grant this year and then they will, it will be self-sufficient, or should we anticipate another $20,000 request in FY28? Um, I guess the other question I had is, you know, how long does it typically take to set one of these up and then And I'm looking just, you know, I can see some of the words, but I'm just trying to figure out, you know, how realistically, what kind of, what kind of solutions a VOAD, you know, actually implements. I can see some of the kind of more conceptual things, but some concrete examples would be helpful for me.

Thanks. Great. Thank you, Mr. Smith. Others?

Okay, seeing none, those will be communicated to, um, United Way to bring us back some answers.

And that brings us to FY27 passenger fee proposal.

This starts on page 40 of your packet. Sure. Well, while, uh, Director Pierce comes up to present this memo, I just want to remind the body that while there's a lot of information in here, um, you still have time to make final decisions on passenger fees. This is your opportunity to ask questions and get some of that information, but certainly not your last opportunity.

Ms. Pierce. Thank you, Madam Chair. Um, you guys had me so excited to come up here that I brought my materials up and then forgot there were two other agenda items. Um, and the city manager's point just now is relevant. Um, we— the reason why, um, I asked the chair to be able to present tonight is because we're required by code to put the passenger fee budget out for public comment for a month.

And, um, actually, the, the code as written has very prescribed timelines that are, um, kind of impossible to meet with the requirements of the settlement agreement and kind of the challenges of the Assembly budget scheduling process. Um, however, adhering to the code is as written for the, the 2 requirements for public nomination and then public comment is something that we've typically done and is important. So I just wanted to say that for both the, the body and members of public who are potentially listening tonight. A press release will go out tomorrow and you will have an opportunity to comment on the passenger fee budget. So I— it's It's late, and I know you have all read through the memo and related correspondence, so I won't go into great detail here, but I will highlight a few points in my memo and then take questions.

So, you— in your memo or in your packet, you have a spreadsheet document, which is what we sent to CLIA for review. Um, there's some color coding on that. I just wanted to be clear that, um, I didn't spell out in my memo what that was for. The things that are highlighted in green are the things I want to call your attention to because they're things that are either in fund— being funded through another process, or we already have an appropriation for that in a CIP, or, um, are being kind of handled in another way. Um, so I don't want people to think that we've skipped over those things.

Um, And then, as for the passenger fee process, we of course adhere to a settlement agreement for our 3 passenger fee funds: the marine passenger fee, the commercial passenger vessel excise tax, and the port development fee. These 3 funds combine to make about a $13 Passenger fee, and that money, as, as everybody knows, is, is highly restricted and governed by the settlement agreement, our 2019 settlement agreement with Clea from, from the lawsuit that we had. So, and that dictates how we can spend funds in a mapped area. Zone A is the area directly around the docks that is Visitor-related services in that area are allowable uses. Anything— then there's Zone B, where we need to discuss and consult.

The final decision does— and, and everything outside Zone B is also up for discussion and consultation. The final decision on any passenger fee uses, of course, rests with the CBJ Assembly. So jumping into the budget, um, the things that I want to highlight are first and foremost visitor services. So in our visitor services program, we have traditionally used volunteers. This is an anomaly.

Other ports in Alaska and around the world do not typically use volunteers, and with the decline in volunteerism following COVID and just the volunteer corps that Travel Juneau has kind of aging, they have really struggled to fill those volunteer positions. They have had to close the visitor center on certain days. The visitor center is Zone A vital infrastructure for meeting passenger services, and we need to have them staffed and we need to have them open. It's critical for us to man managing our destination as a marquee cruise port. And I'll address Clea's comments about visitor services later in this discussion.

And for related to crossing guards, On page 1, and just backing up on crossing guards a little bit, um, the body may recall that Goldbelt provided crossing guard services from the inception of the program until last year. Um, they were underperforming on the contract. We had a lot of complaints about crossing guards. Travel Juno put out an RFP for new— as the, as the manager of that program for a new crossing guard contractor. The successful contractor was another community partner.

It was JDC. And so we— JDC proposed quite a bit more money to run a successful program and did ask for a supplement of of like $39,000 in order to kind of meet the full cost of the program. So on page 120 and 121 of your packet, there are two different scenarios for crossing guards that JDC has presented. What staff is currently recommending is the, um, the kind of more bells and whistles program. We think that crossing guards are important.

They're vital for moving traffic through downtown and managing visitors. Um, but funding for the total of personnel services and not for equipment. Um, and part of the reason why is you will see there's a line item here for profit. Um, that profit line item is sufficient to take care of both the equipment costs and the $39,000 that JDC is requesting, um, to supplement the program from last year. Um, you know, that line could also be read as contingency.

That's not what the— that's not the word that's in the budget, but, um, Mr. Holst has assured us that it, it could also be interpreted that way. However, Um, you know, I think given that there is some padding in this budget, while we do think that we need to meet the full crossing guard services, um, there, there is some, some opportunity to, to trim a little bit, um, with, with that profit line item.

Um, so we need to, um, the part of the assembly's decision will be whether to fund version 1 or version 2 of the crossing guard program, recognizing those, those couple things that there is this equipment cost built in, um, and the, and the JDC did ask for $39,000 additional to cover their expenses from this previous summer. Um, additional to the crossing guards, or I guess moving on from the crossing guards, um, Juno Mountain Rescue made a passenger fee request for the first time. As people may remember, there were a number of lost cruise passengers last summer, mainly in the area around the tram. It did put a lot of burden onto our volunteer-run rescue program nonprofit, and so we asked them when they came when they came to the staff and asked if this would be something that could be considered, we asked them to estimate how much it would cost to offset that, and they came up with this $20,000 number. They also made a request for equipment.

We've made— we've recommended funding for costs, not necessarily equipment. That is something that the Assembly— it's within the Assembly's purview to consider, of course. Um, moving on to capital investments, um, on the waterfront restrooms line item, um, every year since I have been in this role, we have had a request for more restrooms downtown. It's definitely an identified need. Um, we have also received several requests for shelters for, um, cruise passengers to get out of the rain.

I know that anybody who who parks in the Marine parking garage can relate to the number of people that are backed up the stairs in order to, to get out of the rain while they're waiting for their tour to depart. And the Docks and Harbors put forward a project that does accomplish these, these two things. And the challenge, as discussed by the PWFC on February 23rd is that this project, as designed and placed, precludes construction of a waterfront museum in this location. I think the PWFC's recommendation was to include it in the passenger fee budget for discussion at this time. So I wanted to highlight that for those of you who aren't on PWFC.

We do have the memo that was in the packet, was in your supplemental materials. And Manager Kester also wrote a memo to this end. Uh, Docks and Harbors is planning to perform public outreach on this in between when we talk to you tonight and May 6th. He has— Docks and Harbors has an open house scheduled on April 9th to discuss this concept with the public. We'll also bring it to the Visitor Industry Task Force for discussion on April 23rd, so we will have some more feedback for you when we come back on May 6th about this topic.

Otherwise, we have two buckets of money for different purpose— different portions of the seawalk, as well as completion of the water system infrastructure serving the docks that was started There's a project that was started last year. And so, kind of rounding that out, um, there are a couple of things that the Assembly has discussed and funded in the past that were discussed as one-time funding. So they're not presented in this budget. Um, and first is private docks. And as you may recall, we discussed that raising passenger fees.

We want to put docks and harbors on an even— on a level playing field with the private docks in terms of restroom maintenance and security. Because I've had some varying perspectives from individual members and CBJ staff not remembering exactly where the assembly landed on this as one-time funding. In fact, I put it as a staff recommendation in the budget that I sent to CLIA before going back and listening to the meeting and reading the minutes. Um, you definitely said that, that this was one-time funding, so I wanted to clarify that for the members that, um, I had discussed this with, the staff members that we had discussed it with, because I think there was just some confusion over, um, whether or not it should be in, in the staff budget. Um, the— and to— in, in the past, for, um, for new members or, or people who don't remember We have included restroom maintenance and security services funding for private docks under the concept that they're kind of port-wide services.

If we're providing something to private docks, we need to provide it to docks and harbors and, and vice versa, just kind of in fairness with the idea behind leveling the playing field with our raising of dockage fees. The other thing that we're a one-time funding position decision from last year, our Downtown Ambassadors. You will note that you have a letter from DBA and an email from JDC regarding the program funding request. We did not, through our system that comes to my email, receive a funding request from DBA. Um, I don't know what happened.

I've seen the screenshot that Ms. Brown sent me. I believe that they submitted a funding request and, and we didn't receive it, and I don't I don't know why. I don't know of any other funding requests that didn't come through in this way. When we— I was a little confused by this because it's something that we've received every year. But then we also received the letter from DBA stating that they will not seek additional municipal— they will not seek municipal funds this year.

So in my mind, that had kind of closed the loop. And, um. We, we didn't follow up, um, thinking that that letter also covered their request from passenger fees. Um, and I will also note just in the correspondence you've received over the last couple days that there was an email from Morgan Johnson about her Locals Lane concept. Um, and I want to just call out that we do have some funds, um, about $50,000 in a CIP to generate some signage that would bring— to help bring people into the upper part of downtown.

I know that's not as much money as Miss Johnson request requested, and I— and we did try to work with DBA to fulfill that request. It didn't really go anywhere. They didn't really bite on it. That is still a project that needs a champion. So while We're not recommending the amount that Miss Johnson requested.

I do think that there— it does underscore the need to have some sort of activation that helps kind of entice people past the red dog, and, and that we need a champion for that, a community partner champion for that. So that's, that's a project that I'm willing to kind of embark on, um, in the, you know, after, after we're through passenger fee season. Um, however, the, um, position by DBA about passenger fees not being municipal funding per se, um, kind of brings me to a point that I want to make around some of the dialogue around the passenger fee budget and the sense that these fees are not municipal municipal funds. And this is as much a response to the comments from, from DBA as it is to the occasional comments I hear from people in the industry about like our money. Passenger fees are municipal funds, just like the permit fees at Mendenhall Glacier are not the bus company's money, and the sales taxes that a business collects and remits are not that business's money.

Passenger fees are They're not the cruise line's money. They're not the private dock's money. They're— they are municipal funds, and they're highly restricted funds, but they are municipal funds. And that kind of brings me to Cleo's comments about the travel Juneau budget. I would like to remind the assembly of the spirit of the settlement agreement, and also that the visitor center is zoning infrastructure.

Judge Holland's decision that we can collect passenger fees, but they need to serve the cold hard steel of the vessel, was problematic for both parties because we mutually recognized that providing valuable services and infrastructure to support a great passenger experience in Alaska's marquee cruise port was vital to our shared success. And to that end, as I have said, the final decision on how these municipal funds are spent rests with the CBJ Assembly. And certainly there is an argument that things like private dock infrastructure and downtown ambassadors fit within that intent. And it's your decision. So, I wanted to.

So I'm going to advocate to our cruise line partners to return to those core principles. The response this year where, you know, we had to kind of go back and clarify that Travel Juneau keeps their brochures offsite and that mileage is actually an allowable expense and that other ports in Southeast Alaska do in fact have paid visitor center staff just felt a little bit nitpicky.

Is the process of this nature does not exist in other ports to the extent that CLIA didn't know that other ports use paid CPP-funded staff in their visitor center. So part of my work moving forward, in case anybody has strong— unless anybody has strong objections to that, is to try to return this discussion to the higher kind of broad brushstrokes level and the intent of the settlement agreement, which is that we want to provide top-notch infrastructure and visitor services to our shared customers in the destination. So with that, I'm happy to take questions.

I saw Mr.— oh, Mr. Steiner has a potential conflict of interest. Go ahead. Yeah, I'd like to declare a potential conflict conflict of interest. My partner submitted one of the items for consideration, number 74 on your list. I'm not involved in the project.

I don't have any financial tie to the project. Spoke with our attorney. She didn't see a problem with me continuing in the discussion, but, you know, it's up to the body to decide that.

I'll ask a question. Is, is you um, is you not having a conflict because you're not married? Like, does— if it was her, would, would she have to conflict? Maybe just describe, if not knowing what the proposal is, is it— go ahead. But can you clarify what your question is?

Yeah, so I would think that you could have a situation depending on the nature of your relationship to this person. If they're getting a financial benefit from this, then you would be conflicted out. But it may be that she's not. Why don't you have a conflict? I guess just to be clear.

That's a good question. That specific question didn't come up when I was talking with Attorney Wright. My understanding of that conversation was, I'm not involved in the project. The project as proposed wouldn't pay my partner either, from how I understand the proposal that she put forward.

But that's—. Yeah, that was my read on it. We can, of course, get more information from the attorney if we'd like. Sure, I'm not trying to dig into your personal life. I'm just trying to understand where the potential—.

You sound like my mother—. Is so we can consider it. Maybe I can ask the attorney this in a more appropriate way. What would the potential conflict be that you decided was not a conflict and why? Sure, thank you for that question.

So the conflict we're looking at, um, we're looking at a direct impact to Mr. Sininger from, um, his business perspective, his financial perspective, um, something that he's directly involved in. So there's no connection there. Anything that she's doing on this project, one, it doesn't sound like any finances are directly going to her. It's a project for something else, but we would be looking if she was getting money would that money directly go to him?

And that does not appear to be the case here. It's completely separate. Finances are separate. There's no connection other than the fact that, you know, they're partners and she's asked for something.

That worked. That makes sense to me. Okay.

I had Mr. Kelly and then Mr. Smith with questions.

Thank you. Um, I do have a couple of questions, so I'll go ahead and jump in the queue for the second one after other people have gone around. Okay, I'll raise my hand later then. Um, I guess my first question is kind of related to the last thing that you, you brought up, Miss Pierce. That the passenger fees are supposed to support our shared customers, the visitors who are coming here.

The fees, as I understand them, are pretty static. Have they kept pace enough in order to meet the needs of our visitors?

Um, thank you.

I mean, I, I think that they, they have. I mean, we, and you will also, you have pointed out something that I forgot to note. You will see in my memo that I believe we have $24,000 allocated and we are bringing in $21,450. $450 Million— sorry, it is late at night, um, and we've learned about Mr. Steingart's personal life. Um, so we have $21,450,000 projected, and that is because there are funds coming back into the passenger fee budget that were lapsed and not spent.

And so that we wanted to stack as much money into the seawalk line item as we possibly we could, and so that's why the budget reflects the way that it does. You know, I, I do think that currently our, our passenger fees are sufficient to, to meet the needs of our visitors. We always can use more money for capital improvement projects. They're never-ending, and the seawalk is going to be a money pit for a very long time. It's an old structure and it's going to need major maintenance as well as expansion.

Um, however, um, you know, right, right now I'm not coming forward with a proposal to raise passenger fees.

Mr. Smith. Thank you, Madam Chair. Thanks, Director Pierce. One request, and then I'll ask my question. And the request is just, if— could you share with me the, like, approved FY26 marine passenger fee projects, please?

Or I don't know, maybe— I don't know if others want it, but I'd like to see it. And then I guess I did have a question on the staff visitor center and then the not funding ambassadors. I'm sorry if I missed it and if you mentioned this, it was just— it is, you know, it says in the memo staff are not recommending this and because of expanded visitor center operations. I guess how many visitor centers are there? Are they planning to, you know, leave the visitor center?

Are they just going to be in those, in those in those little sites, just because from what I know about the Downtown Ambassadors, you know, they're moving about town and helping people that, you know, maybe lost, not directly by a little visitor center thing. Or anyway, just talk to me a little bit about, about the rationale there. And I'm sorry if you already mentioned it during your intro. Thanks. No, thank you, Mr. Smith.

Paid visitor center staff do offer us a lot more flexibility in what that program can do. You know, that's kind of a deeply secondary reason to not recommending funding for the Ambassador Program, with the primary reasoning being that the Assembly asked for it to be one-time funding last year.

Mayor Weldon.

Thank you, Madam Chair. My question has to do with the Genoa Mountain Rescue. I thought we charged people when we rescued them. Don't we charge them enough?

Um, Madam Mayor, I see Chair Walls shaking her head like she maybe has a, a reason at home to know something about this.

Because we're getting into our personal life. Someone goes to the hospital, you know, they get, you know, their insurance or they get charged. But if someone from JMR goes and rescues them, that is at the expense of JMR.

Thank you, Madam Chair. That was, um, that was my understanding as well, but I felt like you could corroborate.

Um, I had— yeah, I'll get Miss Hall and Miss Atkinson before we go around to other folks.

Go ahead, Miss Atkinson. This works out because it's related to the, uh, Juneau Mountain Rescue. Uh, well, I have a couple questions, but I'm not going to ask the big one. But, um, you said that a lot of the issues were particularly around the tram which is kind of what I noticed as well. Are we looking into, in addition to just making sure the people who are rescuing people are well paid, are we doing anything to make sure that people are less likely to need rescuing in that area?

Thank you, Ms. Atkinson. We've been talking to the cruise lines about what we can do in terms of educational campaigns. It's always hard to get, um, it's very hard to get information to cruise passengers onboard ships. In such a way that they consume it and retain it. However, it's, it's something that we've talked to JMR about.

It's something that I've talked to CLIA about, kind of how, how we help prevent rescue and what that might look like. We don't have any sort of solutions yet beyond that we flagged this as a need.

Ms. Hall.

Okay, well, maybe one question at a time. Again, I'm a little concerned about the Ambassador Program not being included even though they submitted their, you know, there's some confusion about when it was submitted.

And with the expanded visitor center services, As I understand, that's just going from volunteer staffing to paid staffing in order to keep it staffed. But, you know, the DBA isn't asking for much, and so I guess I'm a little more inclined to fund that unless we come up with some type of a program where it's all under one roof. But I think that should be a discussion. Between the parties before we move to a different model. Thank you, Miss Hall.

Um, and I do, I do just want to reiterate again that with both the private docks and the downtown ambassadors, it was an assembly decision to make it a one-time funding last year. So that essentially directs staff not to include it in the budget. Um, it is absolutely within the Assembly's purview to add things back in. So it's not necessarily that staff, um, didn't— it was because, um, of their submission. It was, it was kind of based on Assembly direction, and then there was some genuine staff confusion.

About the DBA letter stating that they would not be asking for municipal funding and then coming back and asking for municipal funding for the Downtown Ambassador Program. Um, however, again, absolutely within the Assembly's purview to add those things that you considered one-time funding last year back in as one-time funding or continuing funding, um, this year. And I think that's largely— unless you're planning to do something that I'm not expecting tonight— what the discussion on May will be around.

Thank you. Um, and I would encourage the body to not start making motions tonight and to use this space to ask questions, and we will have time to make motions. I'm going to get a question in before I go back around that, you know, uh, the one-time funding does discussions. I, I'm getting confused now about how that applies here. Um, it, it, and specifically with the private docs, you also mentioned that that was a decision to for one time.

But if I'm reading this correctly, you did— your budget does do what I think the intent of the Assembly was last year in terms of we, we raised dockage fees so that docks and harbors could pay for those things with dockage fees instead of marine passenger fees, and we removed marine passenger fees from the private— that don't go to private docks. Yes, I'm seeing your head nod that I'm interpreting this correctly, even though that we voted to make that one time. And similarly, we could change that. I'm not advocating we can, but we— or that we should. But right, and to provide some clarification about why it's in the memo and it's coming up tonight is because there was a lot of confusion about what exactly assembly direction was last year.

In individual conversations I've had with assembly members and, you know, within staff, I was confused. I put the wrong thing in the CLIA submission. So I wanted to make sure that we highlighted what we considered one-time funding last year and why those things aren't in the budget to just alleviate that confusion as best as possible.

All right, um, I have Mr. Kelly, Mr. Smith, and then Mayor Weldon.

Thank you. I think this question might have partially been answered. There are quite a few things in here that I want to talk about. I don't think we're going to get to all of them in the next 20 minutes, and I don't think we're going to want to extend time much past that, if at all. So my— I guess my question was going to be, will we have another bite at the apple?

It sounds like you're saying that we'll be able to speak more about this and maybe make some changes, um, May 5th. Is that a correct understanding? Yeah, thank you, Mr. Kelly. So the way that the process is dictated by code is that we put the proposed budget, the staff recommended budget out to— or manager's budget out to public comment for a month. So there will be a press release going out tomorrow about that and public The public will have a month to submit their comments, and then you'll have a subsequent discussion on May 5th where you can really dig into this.

Sorry, May 6th.

Mr. Smith.

Thank you, Madam Chair. Um, regarding the bathroom covered area. I guess a question potentially for you, Ms. Pierce, or maybe Ms. Kester, is have we done like an analysis or public engagement or just any type of like broader planning on like what that site should be used for? I feel like when the idea for the museum was brought up, that was actually some of the pushback on it. I mean, anyway, now there's all kinds of other pushback on it, but it was like, what should we use this for?

I mean, I'm, I'm not opposed to restrooms. I'm not opposed to covered areas for people. $3.5 Million seems like a lot, but well, everything we talk about now is expensive, so whatever. It's Just like, do we use our last piece of, you know, some key waterfront real estate to, you know, for bathrooms and covered areas for people to stand versus something that potentially could be more valuable or useful there? So anyway, just a question on, has there been a deeper analysis on the use of that, that space?

Thank you, Mr. Smith. Docks and Harbors did conduct a planning exercise, Marine Park to Taku Smokeries, or Taku Dock Urban Design Plan, and that structure is included within that plan. And so part of kind of, I guess, the appeal of this project, while it's still a kind of shocking $1.2 million value is that they've already done some pretty significant design work on this project. I believe it's at 65%, and so, and now they're kind of moving forward with more updated public outreach because that plan is now a few years old and obviously a different development going on the Archipelago lot than was anticipated in that planning process.

Mayor Walden.

I can ask my question later of Alex if we're not— sorry, um, Director, um, since we're almost out of time. I know who you're talking about.

I am going to ask a question then. You're not, Mayor Walden. Continuing on the bathrooms, you know, I will say that I am at this point, you know, not opposed to that project, but hesitant to make a old final decision that we're not moving the Waterfront Museum, the museum to the waterfront, because I do think, although we don't have the funds to move it forward now as we would have liked. If, as we think about the future of the museum, you know, at some point we're gonna need options probably, and this is a good— this is a much better option, I think, than where we currently have it in terms of sustainability of that institution. So my question is, You know, if we were to remove that project from this funding list, if only to kick that can down the road, do you know what you would recommend next?

Or would you, you know, want us to just— me to ask you to come back with— do you know off the top of your head what, you know, is there something else that you would, you know, was next on the list for you that you would have recommended for marine passenger fee funding that we would do with the $3.5 million? Yes, um, I— we would stick it on the, the seawalk. We have a major capital need for the seawalk, and, um, that's part of the reason why the capital investments section of the budget is so stripped down this year.

However, I would also be interested in consulting with Docks and Harbors on alternative locations for bathrooms downtown, because that is a stated need, and that's something that's come up in passenger fee proposals. As I said, since, since I've been in this position, I've seen something every single year.

Mr. Smith, thank you. I'll keep going until it's maybe my last one, but, um, I, I did just have a question, um, I saw something about these water bottle fillers. It seems like a beneficial service. I could see issues with whatever— vandalism, maintenance, blah, blah, blah, blah, blah.

There is already existing CIP. I guess just a question, like, is it just not an advisable project for, you know, whatever reason, or is the CIP just not enough, or is it just— it just, you know, of course there's only so much the team can do in a day? Is it, is it a capacity thing to be able to execute a project with the water bottle filling project with the $50K? Thank you, Mr. Smith. Um, a couple of factors here.

Uh, you and you, you— yes. Um, so first and foremost, we— I think the vision of having water bottle filling stations kind of sprinkled happily along the seawalk was killed a little bit with the— with, you know, we just don't have water supply there adequate to, to provide them. We do have that CIP, which Parks and Rec former Director Schaaf thought would be enough to put water bottle filling stations at the areas where we do have water currently.

And then there was a fair amount of turnover in Parks and Rec, and that project just didn't doesn't really have a champion. Um, I have recently talked to Director Wheeler about it. He's excited about it. He wants to pick that project up and be its champion. Um, as we dig into the project a little more, if there is a need for, um, additional funding to accomplish it, we'll come back with a supplemental request.

But as we've looked at pricing out water bottle filling stations for the locations that Mr. Schaaf had recommended. They're not terribly expensive, so I think we should be able to accomplish them within the $50K depending on the cost of labor. Thank you for that. Ms. Hall, real quick question, more on process. So if we're going to public comment soon, does that preclude adding things that might have been overlooked, or, you know, if it's going to public comment.

Is this set?

Um, it— thank you, Miss Hall. It is within the assembly's purview to add or just put the budget out to public comment as is.

Um, but maybe if I could restate Miss Hall's— we could add later even though the public comment opens. So we— so you could add something now if you wanted that to go to public comment, but we could also add things later after public comment. Yes, well stated. Thank you.

Anything else?

All right, seeing, um, no other questions, we will move on to our next meeting date, which will be April 11th, 2026 at 10:30 AM. Um, for our budget retreat. And with that, we are adjourned. Oh, just kidding. Miss Flick, sorry.

Um, sorry, just super quick on your supplemental, um, packet. You'll notice there's one additional information item in there. I wanted to let you know that the, um, FY25 audit concluded yesterday, and, um, our financial statements and all the grant Um, financial statements are online. The link is on your supplemental, um, agenda. We will be doing the presentation on the audit after you get through the budget, so not to, um, add to your long meeting nights.

We'll hold that until June. But the letter from the auditor to you as the assembly, um, I should have that probably next week, and I'll make sure you all have that, um, within your boxes. Thank you. Thank you for reminding us of that and getting it done with one day to spare. All right, with that, we are adjourned.