City and Borough Assembly

ASSEMBLY CHAMBERS CITY AND BOROUGH OF SITKA 330 Harbor Drive Sitka, AK (907)747-1811 Minutes - Final City and Borough Assembly Mayor Gary Paxton Deputy Mayor Steven Eisenbeisz, Vice Deputy Mayor Valorie Nelson, Aaron Bean, Kevin Knox, Dr. Richard Wein, Kevin Mosher Municipal Administrator: Keith Brady Municipal Attorney: Brian Hanson Municipal Clerk: Sara Peterson Thursday, April 4, 2019 6:00 PM Assembly Chambers SPECIAL MEETING I. CALL TO ORDER II. FLAG SALUTE III. ROLL CALL Present: 6 - Eisenbeisz, Knox, Bean, Wein, Mosher, and Nelson Absent: 1 - Paxton IV. PERSONS TO BE HEARD None. V. NEW BUSINESS: A 19-064 Discussion / Direction of local support of public education to the Sitka School District contained in the proposed FY2020 General Fund and other issues pertaining to the financial support of educational related activities (Assembly action may be taken) Deputy Mayor Eisenbeisz presiding over the meeting invited School Board members and Sitka School District (SSD) staff to the public testomony table. His goal was to give indication on an amount the assembly would fund, however, noted it was up to the assembly as a whole in order for that to take place. Chief Finance and Administrative Officer Jay Sweeney gave historical context that included actions to be taken, when, and if no action was taken; the definition of local contribution of Alaska Statutes for public school funding; Secure Rural Schools; and formulas of school funding around the state. Controller Melissa Haley gave a presentation that went over the schedule and next steps for the budget noting the May 1st deadline of SSD submitting their budget and that the city has 30 days to respond. CITY AND BOROUGH OF SITKA Page 1 City and Borough Assembly Minutes - Final April 4, 2019 She stated that the assembly needed to determine the level of support to give the SSD. She noted the difference of almost $750,000 between the city budget and SSD. She relayed the infinite possible scenarios of funding and amounts. Nelson clarified that the SSD's budget had not been submitted. Sweeney stated $6.5 million was budgeted as the total local support. He noted that not included were in kind donations and gave examples of rental of storage and maintenance building at Jarvis Street, and snow plowing, etc. Jennifer McNichol School Board President stated the SSD budget had expected a contribution from the city of approximately $7.1 million. School Board Member Dionne Brady-Howard noted the difficult situation and estimated $100,000 represented one teacher position. Mosher felt that a one time subsidy would allow for the opportunity to raise revenue. He told of the idea of raising the sales tax to 6% year round to support the SSD. Nelson was uncomfortable making decisions without knowing other costs such as the hospital liabilities. Eisenbeisz noted the city had given subsidies over the years and wondered if the assembly gave above what was budgeted where the funds would come from. He asked if the SSD felt the student population would be decreasing. Mary Wegner Superintendent of SSD stated there had been increases in cost of utilities and health care and mentioned the number of students would be decreasing from 1,207 to 1,187. School Board Vice President Elias Erickson added the preliminary FY2020 budget included a reduction of three elementary teachers on account of lower enrollment. He stated that any further cuts to the SSD budget would be staff and noted other areas that had already been cut. Budget/Treasury Officer Janet Schwartz gave information with regards to the balance and future of the Utility Subsidization Fund. Sweeney spoke to the Undesignated Funds that may be put into escrow for the hospital merger. School Board Member Amy Morrison heard from the public the idea of an increase of sales tax to be earmarked for education. Wein noted competing needs of the community that the assembly must deal with and stated the reserves that the city had was really nothing. He had concerns with people leaving town, that the Raw Fish Tax may be taken away, that the fishing fleet was always on a razor's edge, and that tourism was discretionary funding. He wondered what the city could reasonably afford without leveraging the future noting to look at the amount of bond debt the city has and how much was needed in the future. McNichol understood the difficult position of the assembly and community and noted the School Board was elected to advocate for children and would try to do the very best for the students. Van Cise noted the complexities as he went through the city's budget as well with the vast amount of infrastructure and the need to have savings in case of emergencies. Bean asked the School Board to consider and prepare for the worst and hope for the best but felt they may need to consider cuts. Eisenbeisz was in support of the administrator's budget with regards to the amount allocated at 92%. Knox leaned in the direction of having a way to bridge the funding gap for a period of time and ask for the public's input to support the SSD specifically giving the example of an increase in sales tax however, would rather look at a property tax increase because of the equity issue that was built in. Nelson felt the discussion was premature and hasn't seen the final SSD budget. Mosher agreed with Nelson and felt the hospital decision needed to be solidified prior to determining the amount to pass to the SSD. Wein offered that he wasn't ready to make a motion but agreed with Bean with regards to a lower amount than what the SSD had budgeted. McNichol told that the overall SSD budget had decreased although there had been CITY AND BOROUGH OF SITKA Page 2 City and Borough Assembly Minutes - Final April 4, 2019 increased costs of health insurance and utilities. She stated that although the city has funded higher, the state and federal funding has decreased. Van Cise told of unknowns of consideration of the state. He noted as a rough estimate with the city funding at $6 million would be a cut of 15 staff members which did not include the three that were already scheduled due to lowered enrollment. Brady-Howard thought when it came to the schools, the public may be more amendable to contribute to revenue. She stated the quality of the schools was important and if it was decreased due to cuts, then it may be less attractive to live in Sitka. Morrison estimated that the $6 million in funding would be more like 20 to 25 teacher cuts and they were already facing a $1.6 million deficiate. She noted the economic impact of losing those teachers and told with the uncertainty that teachers were rumored to be leaving and or looking for jobs elsewhere. School Board Member Elias Erickson included that technology would likely be cut as well as staff which had impacts through the entire community. B 19-065 Discussion / Direction of the FY2020 Municipal Budget as it relates to the General Fund and other Funds (Assembly action may be taken) Eisenbeisz noted this item was a catch all in case the previous agenda items spurred something for the other funds, although he didn't have anything for this tonight, was aware that other Assembly members may want to discuss other funds. Chief Finance and Administrative Officer Jay Sweeney gave history of cuts as directed by the assembly. Wein stated the assembly had asked for $2 million in cuts. He told some of the cuts listed were potential considerations, but some were not. He gave his thoughts on what could and should not be eliminated. Sweeney explained with regards to health care, a new possible option. Mosher inquired of self funding insurance, however, Sweeney stated the challenge was the amount of reserves needed. Sweeney noted that some of the recommendations came from the Citizens' Taskforce. Wein felt that times had changed since then and that there was a need to rework things and approach problems in a more realistic way. Bean would like to see what was discussed that was not brought forward. Knox reminded that the majority asked for broad proposals. He felt that if the assembly wanted to see specific cuts, then it needed to be asked for. Haley clarified that Pioneer Park would not be sold, however, was on the list to not maintain it. Wein was interested in seeing how to create efficiencies, increase revenue, and create new revenue. Nelson stated that the assembly could not direct staff other than the attorney or administrator. Knox told that if there were direct cuts that the assembly would like to see, then it needed to be detailed to the administrator. Haley noted that without specific guideance as to where cuts should have been, the Citizens' Taskforce was the most recent, existing guidance. She noted that after years of cuts, there wasn't much to give without impacts to services and asked for more specific guideance. Sweeney gave thoughts on a use tax. VI. PERSONS TO BE HEARD: Acting Municipal Administrator Dave Miller introduced interim Police Chief Robert Baty. Chief Baty gave thanks and was excited to come back to Sitka and stated he was looking forward to working here. Marlie Loomis spoke in support for the students and felt that teachers were needed in the classroom. VII. EXECUTIVE SESSION None. CITY AND BOROUGH OF SITKA Page 3 City and Borough Assembly Minutes - Final April 4, 2019 VIII. ADJOURNMENT A motion was made by Bean to ADJOURN. Hearing no objections, the meeting ADJOURNED at 8:54 p.m. ATTEST: ____________________________ Melissa Henshaw, CMC Acting Municipal Clerk CITY AND BOROUGH OF SITKA Page 4