City Council - Regular Meeting

Hi Jeff, can you hear us? This meeting is being transcribed and summarized We are like, all right.

Okay.

I like to call this regular city council meeting of August 6 to order. Yeah. Yeah.

Yeah. Yeah. Yeah. Yeah. Yeah.

Thank you, the city, the city council would like to respectfully acknowledge the traditional 1st, people of this land in. The Thomas clink of people, we have 2 public hearing public hearing on resolution number 26, 30, 29, amending that can public utilities operating capital budget to provide a supplemental appropriation for the electric division in the amount of. $322,000. Is there anybody here to speak? Hearing seeing none, we'll close that and move on to the next one, public hearing on resolution 263030, amending the general government operating capital budget to provide for supplemental appropriation to the fire department in the amount of $300,000. Is there anybody here to speak to that? Hearing seeing none, we'll close that public hearing and move on to communications. Um, we had a, um, notice that we would do our, um. Protests and liquor license for the Bush by allowing communication stream a, and we had a calendar coming events for the month of August. Person be heard, do we have anybody to speak to the council tonight?

We're going for some general.

Evening, Council and Honorable Mayor, John Milner. I just wanted to come introduce myself, newly appointed Assistant Business Manager with IVW.

So, open door if you guys ever want to talk about something, but just wanted to make an introduction.

Congratulations, John.

Thank you. Appreciate it.

And that's all, Your Honor.

THANK YOU. THANK YOU. BRING US TO THE CONSENT AGENDA. BRING US TO THE CONSENT AGENDA. IF THERE'S NO OBJECTION, I'D IF THERE'S NO OBJECTION, I'D LIKE TO MOVE ITEM 6A OF MY LIKE TO MOVE ITEM 6A OF MY COMMISSION TO THE BOARD AND COMMISSION TO THE BOARD AND TO THE COMMITTEE. TO THE BOARD AND TO THE COMMITTEE.

AND THEN I'D ALSO LIKE TO MOVE AND THEN I'D ALSO LIKE TO MOVE ITEMS.

yeah 7g which is uh ordinance uh amending subsection of section two seven two zero three zero the catch can missile code entitled fort harvard to drive first reading changing the meeting time so with that do i have a motion with this second anybody to speak yet not madam would you please read the item

Approval minutes, special city council meeting work session of July 13th, 2026 and regular meeting of July 16th, 2026 resolution number 263033 accepting grant number 25006 from the state of Alaska Department of natural resources and the amount of 50,000 dollars for pioneer all restoration. Authorizing the city manager to execute any and all documents necessary to accept and administer the grant. Resolution number 263030, amending the 2026 general government operating and capital annual budget to provide supplemental appropriations for the fire department in the amount of $300,000. Procurement of generator protection relay replacement in SEL Engineering Services, SEL Engineering Services, Inc. Award of contract number 2644, 2026 road surfacing improvements, Coal Asset, Inc., doing business at Seacon. Award a contract number 2636, 1 ton vehicle replacement, solid waste division, advanced truck, the body and equipment. Resolution number 263029. Amending the 2026 catch a camp public utilities operating in capital budget to provide a supplemental appropriation for the electric division in the amount of 322,000 resolution number 263028, appointing the election officials for the regular municipal election to be held on October 6, 2026. Approving the appointment of members of the canvas board as authorized by the city clerk. Appointments to boards and commissions, which was opening manager hope to the hack and see that and ordinance number 26 to 2033 amending subsection. Of section 2.7, 2.030 of the municipal code entitled port and harbors advisory board.

Yeah. Yeah, item D. I'd like just a short explanation of are we putting in protection for the generators or is this replacement or what?

Robert?

I'll have the electric division manager come up and answer your question.

Hi, I'm Robert Fritz. I'm the electric division manager. The question was about the generators, about the relays.

Well, the item talks about generator protection relay equipment. Yes. Is that equipment already there? Will you replace it, or is it new?

Yeah, what exists right now are mechanical relays from probably 1960 vintage, and we're replacing them with the modern SCL generator protection relays. when there's a system event, the mechanical relays can't see, it's called negative sequence, where, you know, something happens, a wire falls down on the street, the generators kind of spin, and then that can cause a burnout of the winding. And that's a protection sequence of generator. So what this will do is it'll buy three brand new generator relays for each generator at the Ketchikan plant. And it's part of my ongoing plan to upgrade all the protection relays for catch can public utilities.

Okay, thank you. Any other. Thank you. Thanks. Being here none that would you please call Gage?

Yes. Yes. Bradbury. Yes. Yes. Yes. Yes.

Yes.

Yes.

Thank you very much. Brings us on to new business. Our first item is represented by Jeremy Bynum's legislative update. Jeremy. And welcome and thank you for all the hard work you do in the state. You guys have been there for most of the year, longer than expected, but we certainly appreciate everything that you do for the district and for the community.

Thank you. Thank you, Mayor, Mayor, Council, Manager, Clerk. Appreciate the opportunity to come talk to you tonight. Tonight I hope to be a little bit quicker than I was at the Borough Assembly. We got a little carried away there, getting excited about sharing all the good news about what's going on in the legislature and also some of the challenges. So tonight what I'll do is I'll run through a slideshow presentation for you just so you can kind of see where we're at. on here. And if you got any questions as we go through the process, I'll happily take those up. But I'll try to make it pretty brief today. It's been a pretty busy year, as the mayor had said. We are now in our third special session this year, fourth overall for this 34th legislature. I had hoped to come talk to you when we were done with this and it has been an ongoing activity with these special sessions. And I spent quite a bit of time in Anchorage for the first special session this year and in Juneau for the second one. And now that we're in this third one for this year, we are currently just waiting would like to do though is give you a quick overview about the budget there's a couple of handouts that I'd also provided to the council that are a little more detailed but what I will do is I'll just go briefly over this when we look at the the budget we have our operating budget capital budget supplemental we also do a mental health budget I did not include that on here But it was very little effort going in to amend that on the floor. But the primary budget is our largest, and that's the operating budget. And when we go to look at the operating budget, we look at our revenues, our expenditures, our total with capital, and then the permanent fund appropriation. So you won't see the permanent fund appropriation as part of the expenditure line. But what you'll see is that overall revenue for the year, and this was done in June, end of June, won't take into account all the volatility interactions so we will have a full update on that until the middle of this month and we'll have some further updates on what we might have for additional revenues to the state but for the overall budget overview revenue is about 16 and a half billion dollars and that includes federal dollars about three percent increase from the previous year expenditures for 13 billion and we had a total of $15.6 billion, including our capital program. We saw about a 3% reduction in spending this year in the expenditure line. And overall, with capital, it was a zero. So it wasn't an increase or a decrease from the previous year's budget. And the permanent fund appropriation was slightly smaller, and it had to do with the amount of people receiving that this year. The amount remained the same. relief payment that goes out and it's like an additional permanent fund dividend the dividend amount this year was set at a thousand dollars uh capital budget this year is a 66 percent higher than it was last year but you'll see that it is only 381 million so we've we've got a long way to go when we talk about how do we make reinvestments in the state but this is what the current budget this year could afford most of the additional revenue that we have unexpected expenditures and things like disasters fire suppression money things like that and it was it was unexpected unexpected expenses from that point 26. we go to the next slide we'll see that this is the overall budget summary that i was talking about and what i would you like to do when i And then the red arrows just indicate some of the major lines that we look at when we do that. Moving on, I'll talk a little bit about some of the legislation that moved through the legislature this past two years. I had eight pieces of legislation that I sponsored, and I had two of my bills in statute for a very long time, and that's if you were going to the Merchant Marine Academy, you were not eligible to maintain your PFD status. And this has been something that's been trying to be fixed for about a decade. I was very fortunate that I was able to have a partnership with a senior senator, and we were able to work together on this. Not just one piece of legislation, but two. The second one was HDR five. That was for secure world schools and support of the federal government actually taking action and renewing that. That's the funding that we get helps with schools and that had expired at the federal level and it was going to create a big deficit, not only for Ketchikan, but for Wrangell and Meditech as well. So it's pretty exciting to see unanimous voice from the legislature to pass that legislation second the third piece of legislation which i sponsored but i also had a companion piece of legislation in the senate and that was hdr 37 and sjrs uh sjr 20. that was the senate version the senate version of that bill is the one that passed so my they're identical versions um Then if we go to the next slide, I co-sponsored 34 other bills, and some of these were significant. And the most significant one I will point out is HB 28. That was a compromise bill for education funding. I'll talk a little bit more about that when we actually get to the education section. Another bill that was here, it was HB 101. I worked very closely with Representative Gray on that bill. It was a bill that a lot of community members here were in support of, and that was to raise that bill was put into what's called an omnibus bill in the Senate. And if they put 10 bills all together, it was called the Senator Claimant Special. And that actually was passed into law. And so got that across the finish line we fell just short but i worked really closely with my colleagues on the senate finance to and with senator solvin to make a really comprehensive bill that would mimic something like the harbor grant matching program and so we're hoping that we'll have a success on getting that across the finish line for him the next slide obviously education is couple of things. The first thing that we did last year was we focused on the base student allocation. Heard a lot about that. It's probably not where a lot of people want it, but we actually had a big success last year with HB 57. That was a bipartisan effort. It required a lot of work together. It really does require a collective will of the legislature to do that. So that bill was overwritten and then the appropriation was vetoed and that was also overwritten. It requires 45 legislators to stand together to make an action happen on a vetoed bill. That is a very difficult threshold. It's the highest in the nation and the legislature wanted to help solve this problem. We actually passed the largest BSA increase in the program's history. We know that there's many challenges still in education. We know that there's challenges with teacher retirement and other parts of retirement across the state. But this was a significant win. Then, like I said, to bipartisan efforts to get done. That was last year. And then we said, well, there's other things that we need to be focused on and doing. And that's where we move down to the next item. And that's HB 28. them this year. I'm proud to say that I was very engaged in that. And that was one of the bills I post sponsored. And what we did is we said, we know that the BSA is challenging to focus on, but there's other things that need effort, that we need to put effort in. And one of those to the school. So if you have this wildly fluctuating energy cost, the schools aren't going to have to take that out of their foundation formula money. They'll be able to fund that as a separate item and the schools will apply for that grant basically to the Department of Education and that'll be funded as a separate item. So it takes some pressure off the schools. There were some other elements to that school loan reimbursement for teachers. a big win. We also got some policy through. We put in HB 57 elements for classroom limitations on cell phones. And we heard pretty loudly that that was something that schools were looking for. And then we also dealt with student transportation funding as a separate issue from the BSA. A lot of work to still do, but we're making a $1.4 billion investment in education this year. And when you look at the little chart there to call about how school funding for the BSA has been. And you can see that year after year after year, it stayed relatively flat. And over these last two years, we have this big increase in funding for education. So a lot of other things university systems to our dot facilities to our schools and we wanted to try to make an investment through capital to address some of those issues fortunately you know revenue is a a consideration and as much as i'd like to see that capital budget be triple the size it is it's a real challenge to get the will of the legislator to make that make that a focus next The next slide is just things that we're continuing to fund. These are ongoing items. I won't go any more into those. And then our last slide will be other items that I think are of importance to this council. We see that there's the CPV block grant. department is still going to be looking at that i know traditionally there's been when we talk about these kinds of funds there's been a share of those funds with the borough i don't necessarily i don't believe that's the case here the way that the um that was put in to the bill be coming to the city. I think that's a big win for the city here. I know that there's tremendous needs when we talk about our work facilities. This will go a long way for that. that working with Senator Steadman this was something that we wanted to make sure catch can was not left out of the process and there was 18 million dollars allocated for port electrification half of that money went to Juneau the other half was coming to catch cans so it gives us an opportunity to see real progress on port electrification but it also means you're going to have a lot of work to do How that grant is going to be structured and how it's going to be given out, I'm not sure yet. AEA will be making those determinations, and as soon as I know, I'll be passing it along to the city management. Another thing that I fought pretty vigorously for and I think was a big win is funding for the Renewable Energy Fund. And part of that funding this year, SEPA was one of the projects listed. We got a $2 million through that grant program. And that'll be a win for SEPA. It's a win for our utility. And I know that that's a real space for an opportunity, not only for the city, but to SEPA to continue advocating for grants through the area. And I'll explain in a minute if that's important. Continuing work. We know we've got a lot of work to do on the Marine Highway System. We're still looking at what we're building and then the long range planning. We have a new governor coming on board. My hope is that the new governor will make a priority for the Marine Highway system and that we can start to see it move in the right direction. What I don't want to see happen, why I mentioned the long term plan is I don't want to see a governor coming in and just say we're going to start over again or do something Harbor matching grants is something that wasn't funded this year. Some we had vigorous debate over, not only in finance, but on the floor of the house. Ultimately, we weren't able to get that funded, but this is something that we'll be pushing really hard in the future. And so I would encourage the city to sharpen their pencils and make sure that that grant, that we have something in there for that grant. I know that Rangel did a very good job this year of putting in a very good program. DOT, ongoing issues. You guys are getting a lot of complaints. I'm getting a lot of complaints and those complaints are being forwarded in the most friendly possible way to our friends at the DOT. I'm on that list as well of dissatisfaction about what's actually happening with the general maintenance of the roadways here. We know there's going to be lots of construction, lots of challenges with getting this case on just general maintenance, the weeds and seeds, as I like to say. And then capital funding. That's a space where we need to be making better investments in Alaska. We need to start doing better to build our state. And so final thing I'll end on is that when the budget right now is very tight. And I wouldn't have an expectation that the continued volatility of oil being in the positive direction is something that we're going to likely see. And so next year, when the budget process comes through, I'm going to assume that it is going to be very tight. And what that means is when capital expenditures So this year in our capital program, we saw major school maintenance, school bond debt reimbursement. Those things all came from the major maintenance list. We saw the funded, which is a as a list program things like the harbor matching grant. That's how things will be funded. So. I'm not telling the city not to put forward a capsus request. a priority of the community, but I would say that the likelihood for Capsus

Thank you, Jeremy. So in regards to CAPSA, so we have projects that we can put in there that shows a large federal match. Does the state take that into consideration as they move projects forward?

I would say that it is very good if we do that. However, this past year and the year prior, there was Imagine that if it was on the level of an emergency, maybe it's something that we would get special attention, but short of that, I wouldn't anticipate that. It's going, it's not going to be ranked because it's not part of a ranking system per se. We just go out and have to advocate for those dollars.

I'd like to see a robust capital program where we could be doing that and seeing that there's federal match local match.

I don't see that actually happening right now, given the current fiscal climate. And I also like to thank you in regards to everything you do for education. And it's my understanding that with that, what was it? HB 28 and start to the heating oil by pulling that out of the BSA. It kind of leveled or makes the playing field more equal because some of our school districts are paying 50% of the BSA for heating and some are paying 20% or something.

That's true. Anybody else?

Yes, Charlie.

Thank you, Jeremy. In regards to the gas bill that's been being argued about back and forth, first of all, thank you for doing what you can or taking part in trying to get that done. I saw a report on it a while back. And I've heard a lot of very different things from people, and there seems to be some pretty serious confusion or misunderstanding on a lot of the numbers. Could you share with us that, just for the sake of the public, what the projections are if that goes through as far as state funding and some of the statistics on that so people have a clear understanding on that? I can give you a generalized overview.

I didn't come prepared. that let's make the assumption well first of all let's back up what what's in front of us right now the legislature is really dealing with is we're we're looking at how to deal with property tax element of a natural gas pipeline it's a Those property taxes go to the organized areas where those facilities are. They're unorganized. It goes to the state. So that's a tremendous cost to what I consider a product that has a very narrow margin on it. It's not like oil. Oil has a spot price market and can be very generous with revenue. Gas is generous. product and the margins are a lot smaller and the infrastructure cost is a lot higher so project cost between 50 and 60 billion for phase one two but under full production we're estimating the close to a billion dollars of additional revenue to the state and there's also additional revenues Volumetric tax that we're considering the reason we're looking at an alternative to a property taxes as you may be aware right now under under There's a lawsuit underway right now being reviewed by the Supreme Court about property tax evaluations of oil infrastructure and With the way that gas is under long-term contracts having that kind of volatility for the amount of gas going through the line. That's how you collect your revenue for property alternative. So I think it's a tremendous opportunity for Alaska, but also for stable long-term energy cost. Something else to consider, and this is one of the questions I get asked quite a bit, how does District 1 benefit from the gas line? It's all the way up there on the North Slope running down to South Central. They get the gas, Fairbanks gets the gas, but what did we get? There's an element that was put into law many years ago when they first started talking about the gas line, and it's called the Alaska Affordable Energy Fund. So 20% of the revenue from that gas line goes into that fund, specifically for the purposes of communities that are not connected to the gas system or the rail belt electrification. So that would be communities like ours. lot of work that went into the bill that element was actually taken out of the bill early on in house resources when that came to house finance we fixed that because obviously it's not something i could get on board with if we were going to take away the only thing in the building or the only thing in the project that benefits us they were going to remove it that wasn't going to be good so there's a lot more to it obviously than that we could spend a couple hours really through the process, why we're in special session. But I'm happy to take those questions away from here. Any additional questions you might have?

To be honest, I was hoping for an estimated projection on revenue to the state government specifically once the project was underway. But maybe I'm getting a little too specific.

$700 to $1 billion. $700 million to $1 billion. And it could be more, depending on the structure.

Thank you.

Mayor Mrakas, When does that revenue come how long before we start getting revenue because of the tax credits in the central itself so by the way, so I don't have it right in front of me, but you know we're looking at a full after full going to full production export you're looking at it's about 10 years, but I have to look go back and look at it.

Mayor Mrakas, yeah. Dave Kuntz, yeah JEREMY how would that revenue get split up for the state between those northern girls up there that seem to reap a heck of a. Dave Kuntz, reward where it's down here like you said we don't see much of it so it's there's gotta be a more equal. Dave Kuntz, value to the everybody in the state.

have that infrastructure in it. So the two primary beneficiaries was North Slope Borough and the Kenai. Because that's where the treatment facility are is located on the North Slope and then the export

I think another component on the Senate side was incorporating PACs and trying to close the loophole there. Is that correct?

There's been a long going conversation as pass-through entity. I could go give you a little history on that right now, but I think part of the pushback on what was being done of the bill when it came to the entity tax was that that element that was added to the bill on the Senate floor in the last hour, that version has never been through a committee hearing. And the only time that we had any And even then, if you go back and watch the conference committee, what they will tell you is that we don't have an understanding of how it would be applied. We don't have an understanding of what kind of revenue we would have or who would actually be impacted. So I think from a good policy perspective, we should probably take a little bit of a step back and really go through that deliberative process like we do for all of our other bills before we institute an entity tax or an income tax in the state of Alaska.

And this last 1, I think that you're in your special session now, but you're only holding them as technical sessions and the reality of it is probably be dealt with with the next legislative session and the governor.

I wouldn't be able to speak to what actually is going to come of this 3rd special session this year. I think there's an ongoing negotiation right now from with the governor. that maybe we'll actually go back and be productive in passing legislation that would enable a gas line. But if it doesn't happen this special session, assuming that there's no more special sessions, then my assumption would be is that we'd be something that would be a property in the 35th legislature. Thank you, Jeremy.

Anybody else?

Certainly appreciate everything you do for us. I appreciate that. shoot me an email, give me a call. When I'm now back in town, I have a little summer ahead of me. I'm available to come meet you for coffee or lunch. Just let me know. So thank you very much for the opportunity to come present tonight. And hopefully we have onward and upward when it comes to seeing Alaska be successful. And the city, too. So what's good for the city is good for Alaska, and what's good for Alaska is good for the city. Thank you, guys.

Thank you. So, that would bring it to item 7 B work session regarding to get you can get with gross admission about very wide library.

Your honor, I move the city council recess into work session to discuss catch can gateway borough citizen initiative to adopt area wide library powers and its effects on the city of kitchen.

It has been moved and seconded to move into. You can access session or into work session.

Yes, and again, yes, Bradbury, yes, Coos, yes, Gage, yes, Zingy, yes.

Thank you. We're now in work session. Abner, what do you have for us?

Thanks, Mayor.

I put together, well, in your packet, you got a kind of a summary of the issue related to the Citizens Initiative for the borough to take on area-wide library powers. I put together a short, very short slide presentation to kind of visually walk through a couple of these things, and maybe that helps clear up what this looks like. And we can skip past the title slide once you get us started there. So how did we get to this point? I think it was the first question. June 9th, citizen sponsors filed an initiative petition with the borough clerk. July 22nd, the clerk certified the petition as having enough signatures. And that will go on to the October 6th ballot. The proposition, as it was in the initiative, and it will appear on the ballot is as it's shown in that middle blue box there shall the catch can gateway borough be granted a new area wide power to provide public library services on an area wide basis in the area of the catch can gateway borough. Pretty straightforward as far as the language goes, there's no implementation date. There's no other detail the borough is able to add and the clerk may add some clarifying language to that. But this basic language must go on to the ballot. Um. To be clear, the city council itself doesn't actually have a vote in this other than as a citizen of the city. And we'll bring this to you for information and discussion. I think to what the borough must do as a citizen initiative goes next slide.

We have a clarifying question.

Yes, does that go on the city only ballot or does that go on the borough wide? It will be on the borough wide ballot and there's a slide on that too. I'll talk a little bit more about that. So on this slide, this is kind of an overview of the current funding relationship. FY26 budget was around $1.99 million for the library, not counting the debt service, $739,000 from the borough, so approximately 37%. A little small note in the bottom there says the borough typically has funded only operations. The construction debt has been carried entirely by the city. If you consider that debt as well as the operating costs and the borough's effective contribution drops to about 31 percent next slide So how does the vote work? It is on the area-wide ballot. All citizens in the Ketchikan Gateway Borough, including in the cities, get to vote on it. And they're counted in two separate groups. The votes inside the cities of both Ketchikan and Saxman as one group, and all the other votes of the residents that reside outside of any city. In each of those two groups, the vote has to pass independently. So it has to pass with all the voters in Saxman and the city of Ketchikan, and it has to pass within all of the borough voters outside of any city. If either one doesn't pass it, then it's not adopted. And in that case, the current arrangement continues, meaning the city maintains library powers. The borough has notified us that they want to withdraw from the agreement. So we would need to continue our negotiation on that agreement should this fail. And the borough non area wide levy for those residents outside of the cities, that's 0.6 mills that continues unless the borough takes action to change it. On the other hand, if it does pass in both of those two groups, then library hours transfer to the borough and the assembly will set the funding and all of the service levels, et cetera. Next slide. So who pays for the services? We pay different amounts today. And that's in that left hand kind of column within the city operations and debt service, which is paid through our city property tax. It's some portion of our 6.6, I think it's 6.6 mills that we charge. City of Saxman does not currently contribute to library. And then areas outside of any city are assessed a 0.6 mil non area wide levy, which is what the borough provides for operations of the library. If it's adopted, it results in a single area wide levy. The borough attorney just using existing budget estimates and existing property tax rates to maintain exactly what they have now. Essentially, it's about 1.2 mils area wide is what would provide the budget to continue the library as it is sort of today or in the most recent budget. However, the borough does have, the assembly would have to adopt and set that rate through their normal mill rate setting process for the area-wide service. So they could set it higher, they could set it lower.

Can I ask a quick question?

Yes, go ahead.

So would that make it actually fair and cheaper across the board for everyone?

There's two questions there. everyone would be paying the same amount area wide specifically to fund the library because they would assess the same amount area wide. The question of fair, I guess it depends on your interpretation. As it stands right now, let me see. I don't remember if I covered that or if I changed it on this real quick.

I may have something to talk about that. No, I don't.

Okay. Fair what what does that mean to the different those 3 different groups currently? Right? So, starting on that left column from the bottom, the area outside the cities currently pay point 6 mills. They would see their rate go up. That would go away under the new area wide and they would be set at whatever the bird decides. Let's assume for a minute. 1.2 mills. So they would go up by point 6. City of Saxman, who doesn't currently pay anything, they get pulled into this through the initiative and they would also be assessed a 1.2 mil tax. So they would go up by full 1.2 mils. Within the city of Ketchikan is a different question completely. Everyone would pay 1.2 mils under an area-wide assessment. The part that's in question is what does the city council choose to do with the current 6.6 mil assessment? Do you lower it? Do you keep it? And that's a decision that would be to the city council to make.

At the time that that happens, and that's my next question is how would that look if we were to. Um, change that out so that we're not. So. Or however that looks where city residents end up paying still paying more. Or area area for the community library, the city mill rate, the same services, right?

The city mill rate is independent of an area wide service. if the council's desire were to take away that payment from the city residents because it's being assessed separately as an area wide you would need to reduce that by an equivalent amount which would if would reduce our budget but we'd also be wouldn't have those same operational costs

I guess the question would be then, I would like to see something that shows us what that would look like. Because I think the voters need to see that and how that looks too, I guess.

It's really, I mean, we can show the different scenarios, but it is still dependent on what council decides once it passes. So we could provide the different models

That would be really nice.

It depends on what they said is the mill rate.

It would depend on what they said is the mill rate too. But generally speaking, if the idea is not to increase what our city residents pay in taxes, you would need to reduce the 6.6 mill rate that we currently have by an amount equal to whatever the borough sets the area wide mill rate for the library.

And that's okay.

Okay. Any other questions on that one? Okay, next slide, please. So what transfers and what doesn't? Some things move by under the law, under Alaska statute. Others require separate decisions by the council. So what transfers under Alaska statute? The building and assets, all the real and personal property, transfer to the borough if this passes. The bond debt liability passes to the borough as well. And the operating responsibility to decide staffing, service levels, et cetera. and budget. All of that passes through the borough. What doesn't automatically happen or require separate action is the staff themselves and how the borough decides to do that, whether we offer them transfers to other positions within the city or whether they move to the borough with the library. That takes independent action by each organization. The library advisory board, which is established out of the city code, we would have to decide what we do with that. We wouldn't have a library. I assume we would want to to repeal that. And then the last thing is, as we talked about on the last slide, the city mill rate council would need to make that decision as well.

Yes, what happens to our equity in the building?

Mitch, you might have to weigh in on this, but my understanding of it is that. The real and personal property transfer to the borough and I don't believe the statute contemplates a. Payment for equity or any kind of purchase of the facility.

That's good. Yeah, that's correct. My family, they succeed to those properties and. To the outstanding debt.

And with the employees, I think. A number of the borough player employees under the same union as some of our library. They just have to figure out how that transfer goes union wise to with contracts. Is that correct?

Right? I don't know that the specifics of exactly how that works. Um, I think it would have to be negotiated, but the contract go over, but I think almost.

Thank you ever. Do we have any person employees at the library?

Michelle yeah, yes.

So, when they transfer over to the. Her liability, you don't have to pay anything in regards to.

I thought of that question too, and I don't have the answer to it. Do Michelle or. Do you happen to know or Mitch as far as the liability. And we may not be sure. We may have to come back with that answer.

We'll definitely have to ask the state. But if the state's concerned about is these employees have been working and there's a possible pension liability for them. So if that transfers to the borough, as long as they continue to pay and there's a position, this would be a little bit different than just an entity going away like Gateway Center for Human Services went away. So that's a little bit different.

Thank you and the city didn't really make a choice to eliminate employees, which is usually when they, we get charged that fee. So we can find out the answer to that though.

Yeah.

Is there any way that we could protect her the employees and also the asset? I mean, on. On a community level, the asset is all of ours, regardless of whether we're city or borough. But at the end of the day, is there a way to protect the asset and the services provided along with the employees that work in making that agreement of transfer?

I do know that the borough has to staff is going to be working on a report back to the assembly as far as operations and financial requirements. And I have that on an upcoming slide, but I intend to work with them on that and provide information on what those costs are. It would be hard to imagine that they could operate the library without taking the employees over as well. But I just need to get some answers to that because I don't know right now.

Because it's also my understanding that the building has to be used as a library.

That is my understanding too, based on the bond.

Because when we voted on that bond to build that library, it was said that that has to be a library.

That's the information that I have as well. It has to be a library.

Yes. My question kind of dovetails off of Council Member Gage's. I was just curious, with respect to these three items that require separate action, obviously the library, in the event that this passed and the borough assumed those powers, There's not any pressing need to resolve the library advisory board question with any. Particular speed, obviously, it's an important question, but I wonder what kind of timeline we'd be operating on regarding decisions. Surrounding library staff, because, you know, I just like to in the event that there is this transition, I'd like to minimize any of the anxieties they might have might have about their employment and any question that the community might have about the availability of the library staff as it stands.

And I think some of that will be answered in talking with the borough about the information they're putting together on operation and financial requirements for this. The statute is Very vague, I can't remember the exact terms, but something along the lines of, it doesn't even establish a timeline for when the borough has to do this just that they have to in an equitable and orderly fashion. I think is the. The terminology that's used is brief follow up.

I just, I know there's a. There's long been the differential between the calendar year on which the city operates in the fiscal year in which the borough operates. And I know that. In the event that they take ownership or assume library powers that that creates. A bit of a funding, like, vacuum portion of time. So I just, I, I know that's something that. City Council, the borough assembly are thinking about is just something I want the general public to be keeping in mind as well.

And probably regardless of whether this passes and the. Powers transfer fails and we have to go to negotiation. Um, I think either way, we're going to need to negotiate with the borough. Probably going to be, it doesn't say they can't even contract it back to the city for time while they figure out the transition plan. So there's a lot of questions that are unanswered out there. And again, the borough assembly does have to receive a report on operations and finance. Responsibilities as part of the statute and borough staff has told us they're going to be working on that and we'll be in communication with them to share information and help get the accurate information on current operations.

Thank you.

Yes, I have a question that kind of goes back to council member gauges question earlier on. We should be able to know what part of the 6.6 mill rate goes to these services. What is the equivalent? We should be able to know that, correct? Obviously, we budgeted out of the 6.6 mill rate. So what is that?

We do. But Michelle, we don't fund the library completely from property tax. Do we use other funding sources in that?

Your Honor, City Manager, we fund the library out of property tax.

Completely.

As well as debt service. So the city taxpayers, through property tax, pay the full amount of their debt service. Nobody else. The operations get shared with borough.

So we could take the current budget, use the mill rate to reverse engineer that and come up with what the resulting effective mill rate is that applies to the library.

And I did look at that last year. I think it was 1.4. I think that was last year. But yes, we can look at that again and look at what that is.

So 1.4 to the 6.6 mill rate.

was effectively going to the lighter okay perfect thank you is that coming oh yeah um actually while we're on that one bacon can can we break that down into dollars for just for the you know dummies and not dummies isn't it one point yeah the dollars so people understand that how much we can yeah you know we can thank you

So, before this became about initiative, it was a topic of, like, the city and borough. Possibly having a conversation about, you know, do we want to do this before it went to? We don't really have a say if it was done that way. Is it, do we have different parameters that we're not forced into? Or if we, if the borough and us come together and say we would like to do this, are there different parameters than what the Alaska statute says?

You're saying if the initiative were to not pass, could the council go back and still transfer powers to the... Let's pretend like the initiative isn't out there.

Because before the initiative, it was just a borough conversation and then it turned into an initiative. So in that borough conversation with this, you know, potentially city and borough come together and we decide between the two bodies, like, Hey, the library, you know, we want to switch it over to the borough instead of the city before the without the initiative. And are we still held to the same restrictions of all the billing and assets, the bond debt liability, does all of that stay in effect if we agree amongst ourselves and not through the initiative? Or are we still held to the statute no matter if we did it borough to city or the initiative forces us to do it?

I believe it's more of a negotiation, Mitch. Is there anything different if they negotiate the transfer of that power to the borough?

That's a good question.

Yeah, that's what I was thinking.

Yeah.

I think you would still be under the statutory language, but you could, in the statutory requirements, because they're going to be operating on that basis going forward.

But are there other avenues that could

Even an area wide and non area wide, which we're dealing with now. There's also provisions you can have. I think off the top of my head, but full and pulled into this and agreement for the joint exercise of powers, right?

Because outside of the initiative, the council's hand isn't being forced into transferring hours. So there's probably some room for negotiation.

I was, I would think so, but.

The only reason I ask is it was brought up by Council Member Zingy early on, is that asset retires in 2031. He paid the debt for a very long time. I understand it has to operate as a library until 2031, but that is so close. And I would hate for the city to lose... That asset in our portfolio, because it is a good asset. So I just didn't know if there was a way around having to give up what the city residents have paid for for so long.

We can, we can check on the answer to that and make sure we understand what the limitations are. Should the council end up in a situation where you could negotiate that. With the initiative in place at this time. It must go on the October 6 ballot and the borough from what I understand has assembly has directed staff to hold off on any further negotiation or discussions. Relative to transfer powers or negotiating an agreement until after the vote.

Yeah, so we have a plan to put the information out there to the people who are going to be voting what this means and what's affected the borough is required to put together an informational pamphlets.

There's limitations. We, they can't try to influence it. They can only put out what the facts are. And we'll work with that to make sure that we have information on that as well.

And if needed, we can try to bring something back to council on August 20th. If there's anything that.

Is concerning in there, but the borough is responsible for putting out information to the voters on what this means in a factual manner.

So, we can't put anything out. As a city on behalf of the city, like, we can't. Talk about the fact that we're going to lose.

Oh, I think you can. Well, you can clearly make. You know, neutral, factual statements on the election. To the extent of some advocacy,

Still have another slide, so if we can go to the next one.

So just on the timeline, it starts again there where the initiative petition was filed. June 9th, July 22nd certified. Today is the council work session. I don't have the August 20th date in there, but we do have a meeting on August 20th for the city council again. And then August 24th, the borough findings and voter guide will be presented to the council. Or sorry to the assembly, and then on October 6 is the election. And of course, in 2031, as you mentioned. The construction bonds retire. I think that's the last slide.

Yeah, last question on this bond debt thing. It says it has to operate as a library, but do we have to the city have to operate the library in the set building? I don't believe that the city has to operate the library based on the bond. But a library has to exist in that building until 2031.

I think it's longer than that.

I thought it was just the bond debt that required it to be library, but when it was paid off, we aren't held to the bond.

I don't know. I don't know one way or the other if the bonding requires a tree library, but it does have to be paid off. Once it's paid off, you know, that restriction is gone and it would be up to, you know, the borough to use it for any public purpose or surplus. Abby? sort of clarified so you're so you're unsure if the bond debt requires us to operate as a library right i've never seen that i mean that's been around here for years i don't know what the bond covenants may say i think it's a general obligation bond and it just pledges the tax base of the city to pay the debt but we will get that information and bring it back okay because the only

The only thing I'm going to say is, I mean, it's a precious piece of one land. It's a beautiful property, beautiful building. It could be used in many other ways for our citizens. And if there is a way that we can work around this, if, you know, initiative goes through or before the initiative goes through um i just would hate to to lose the asset that has been built and for from the city side so understood we'll get that answer and

yes ronnie so i guess i hadn't that hadn't crossed my mind at all yet but i am i picking up what you're putting down that if in the hypothetical situation they were to pass all the required groups and it and we were now in a situation where the borough is running the library what you're pulling strings at is does that mean that the city must also give the building or and that that's a whole nother piece of the puzzle i guess huh that's kind of what you're getting at

I had just said at the beginning, I had posed this question early on. Well, if we have to give them an asset with the library, does it have to be that specific asset? Just I don't know. We don't have many other assets either. But I'm just wondering, like, do we shift? I mean, I don't know. Like, I was just wondering, what is all the options except just giving assets? a beautiful building that's going to retire in a few years and the citizens paid that.

So with those concerns, to your point about the surface, is there also an option where we can lease the building, maintain ownership and lease it? Did you check into that? Yes, generally.

I'm sorry, but if the building can be used for anything else, I think it needs to be set that the building is kept as a library. That is the intention of that building when we voted on it. And I find it. No disrespect to anyone at this table, but I'm highly offended that we're even looking at a building that was built for our community as a library. Period. That is our library. It is a beautiful building, yes, but it should never be anything but a library.

The question arises because if it goes to the borough, they can do what they want with it.

Well, that's what I mean. Is there something we can put to hold it? This is our library. That's my only concern. Sorry. A lot of questions.

And the only reason I bring it up is only the citizens, the city residents are paying for that debt bond. And so I would just say it's been so they've spent so much of their own money into that building to just say, here you go. It's going to go. to another government who could potentially do whatever they want with it. And I would just hate to see that investment from those citizens we represent just be flushed down when it's their hard earned dollars that went to the building if this were to go through.

well my biggest you know like um to add to that is that we're borough residents too we are part of the borough and it kind of taps my back in because we talk like we're separate or we don't count And the borough talks like we don't count. When we actually pay taxes to the borough, we actually pay property tax. We contribute just as much, if not more. And that library, we have contributed for the last 100, what, almost 100 years. It started as a little freaking shelf. And people of privilege decided that everyone had the privilege to read. Not everyone could afford a book.

You're lecturing me.

I know. I'm not lecturing. I'm just frustrated. I understand.

There's a lot of questions yet to be answered. I think that if we ask the manager to go forth and look at that, if there's language available, we can guarantee it's based on the library. We'll look at that. But right now, there's our own. So I think that's what the work session is for, is to bring these questions forward so that we can try to get some answers out.

I have those questions written down. I will get answers to those things so that we can bring it back to Council on the last slide here. As far as Council action, formal Council action, I don't see that there's anything for the Council to formally do until after the election. At this point, between now and October 6, I'll coordinate with the Borough management on their operational and fiscal information and on the information that's going to go out to the public to make sure that it's accurate and we provide input to that as appropriate i'll bring it back to the council if i can do so if the measure passes then we'll need to take some actions on those items that we talked about and if the measure doesn't pass we're going to need to either go back to the negotiating well we're going to need to go back to the negotiating table either way at that point whether it's a Uh, negotiation to turn over our library powers, or whether it's to negotiate the operating contribution from the borough.

That's probably a question. So. I'm sure everyone has different opinions, but 1 thing I've heard brought up at the borough assembly in 1 way or another multiple times is that they're. Their frustration or what got them kind of thinking down this road was their opposition to the, I forget the number off the top of my head. Was it 35 or 33% increase in the total cost of the library annually? The last few years it's gone up 30 something percent per year over what it was, I think three years ago. If anyone has those exact numbers feel free to insert them. I just wonder if have we started looking down that Avenue as far as. From the city standpoint, putting trying to address that, trying to scale that back. So we don't keep having an increased costs at the library because I feel like we're now we're kind of. What you could argue started as kind of a small issue with that and. expanded and expanded and now it's kind of been cut wide open and now we're really looking at the whole big picture so i just hope that those concerns come budget time are dialed in or addressed the increases at the library over the past silver several years as they have been in general government are largely around personnel costs contract

contracted COLA adjustments, those sorts of things, step increases. Pat, you probably have the number. What's your percentage of personnel versus? Pat can talk briefly about the increased cost over the past several years and what's driven that.

Oh, yes. So of the library's entire operational budget, about 73%. Um, is, uh, we just end benefits. So, the increases are driven by those wages and benefits also increases in utilities costs, liability insurance. Those make up a lot of that increase over the past several years.

So, the only other thing that I'm aware of is there was a, you had put in a new system for. Uh, inventory, maybe I think is what it was.

Oh, this year, um, we have, uh, put into our budget, the cost of migrating to a new online system. Uh, the, the complicated factor there is that we share that system with the school district, and they were not able to budget, uh, the 1 time cost of their, their part of the 1 time cost of migration. So we have applied for a grant state grant. Um, to cover their school districts a part of that cost. So that it actually would be more cost effective if we are able to do that.

That's the only large item that's changed at the library in recent past and we are looking at the library as we, as with all the other departments, looking at the services we're providing the levels of service, and we'll be providing that information to council, which is the way that we can. that council can easily direct policy in order to shape the fiscal condition of the city without having to dig in and go line by line and do it that way. So we'll be bringing that forward as well. We're continuing to plan with the library. I've asked the librarian to library director to plan as if this isn't going on, go ahead and put together your annual budget. We need to have that information regardless. And so we are planning that way. So we'll have that information available. I hope I answered your question. That was really roundabout answer.

Yeah, you did. I guess I would just reiterate that I think we need to really focus on, you know, when times are getting tight, we don't think we can keep increasing. And I understand the answer, but I think we got to rein in our costs up there.

Anybody else? Hearing and seeing none. Do I have a motion to reconvene back in the regular meeting?

Your Honor, I move the City Council reconvene into the regular meeting.

It has been moved and seconded. I'll roll.

Boos?

Yes.

Gass? To reconvene into the regular session. Oh, yes. Bradbury? Yes. Gage? Yes. Finnegan? Yes. Zingey? Yes.

So, the next item is see council direction regarding the catch and gateway bro says the initiative to adopt their library power. Is there any need to have that?

Not from my perspective. Mr. Mayor.

Any, that was why it was even in there.

Well, since it's on the agenda, is there a motion? If not, then it will die to the lack of emotion. Hearing seeing and that ties to the lack of. Bring us to item D resolution 263027 and many in the city compensation plan for the addition of position and telecommunication plan manager. Do I have a motion please?

You're on remove the city council approved resolution number 26 dash 3027, amending the city of catch again compensation plan to establish salary grade as set forth exhibit a, and to provide the addition of the position of telecommunications plant manager at that grade. Establishing an effective date.

There a 2nd, it has been moved after.

Thank you. Mayor this item came to the council just shortly before I arrived and was deferred until after I could arrive and talk over the issue with the telecommunications manager. We've since talked about that and rather than making some big organizational change and. Reallocating positions, what we've decided to do is create this, um, this position, the description for the position and the wage for it. That position is needed in the sense that they need that job done, but we have existing. Existing budget and existing that we can. Deal with that with and all we really need from council is to create the classification. The manager scope to deal with already.

So no extra FTE, no extra budget request.

Yes, sir. That's correct.

Abby.

Can you explain how this new, this addition would not add an FTE? Are you proposing, like, are we getting rid of?

We have two vacant FTEs. We'll be reclassifying one of those to this position under administrative authority. And we have the budget already to do that.

SO CAN YOU KIND OF EXPLAIN WHAT THIS POSITION IS GOING TO DO?

MATT, CAN YOU COME UP AND TALK ABOUT WHAT THIS POSITION WILL DO?

SURE. THANKS, YOUR HONOR, COUNCIL MEMBERS. THIS POSITION IS REALLY TO ADDRESS A LONGSTANDING GAP. WE'VE HAD IT DUE TO THE DIVISION. WE HAVEN'T HAD ANYBODY REALLY OVERSEE THE OUTSIDE CLASS in our organizational structure that way. And that's all the equipment infrastructure that supports all the service for our customers. So what it'll allow us to do is it'll help with being more organized on our projects and things we do in the community help us be a little more proactive in things we do rather than now kind of, you know, when something goes out, we react. more correct and take care of things before they become problem.

So is this administrative staff or is this would be considered a union position?

Just out of curiosity. This position would be non-union. It would be a non-corrected position. Yes, right.

So, I have a couple of questions 1, what's the price the cost difference when you tally up salary and benefits between this new position versus the 1 that you were going to eliminate. And then my 2nd concern is. With adding, I get very concerned when I see adding a position and that. Often we're told don't worry it won't cost anything, but in the long haul, my concern is. down the road this position is filled and then the one that we eliminated to fill this one we're going to say oh boy we really need that position and then we're going to be you know at a loss so sorry for the double question but that's a good question and we've looked at all that um the positions that we've looked at to not fund or to address this because we'll be doing a little bit of reorganization with the whole department so

I DON'T HAVE THOSE NUMBERS. WE'RE IN THE PREVIOUS MEMO THAT WE HAD BEFORE MANAGER HOPE STARTED. I BELIEVE IT'S $86,000 OF SAVINGS THIS YEAR AND 146,000, 47,000 SAVINGS EACH YEAR IN THE FUTURE. SO THE COST SAVINGS WILL BE THERE. WE'RE NOT GOING TO ADD ANY FPE FUNDED POSITIONS. SO TO ANSWER THE SECOND PART OF YOUR QUESTION, IF WE GET IN A POSITION WHERE MANAGER HOPE CAN CORRECT ME IF I speaking wrong on this because i know we talked about it make sure i get it right so we have the department the division has 43 ft funded positions so and there's several positions in the compensation plan you know in this case we're going to be an accounting tech and a customer service specialist that will not be funded also the assistant division manager position take on more roles. If we have this position, I can cover the other part of the assistant manager position, so that'll save some money as well. So if we get in a position where we say, okay, we're not funding this accounting tech position, just for example, we get down the road later and we say, oh, we need an accounting tech, we're not going to be able to fund that Yep, that makes sense. And manager can add if I miss.

No, I think you got it right.

So we're going to create one, eliminate two and save a bunch of money.

Essentially, yes. Or the funny. Very.

But on that note, we're not eliminating them. We're just funding them so they could be funded down the line. So we aren't really getting rid of. We're not holding the line of only 43 FTEs. We unfund it doesn't mean we're getting rid of the position. You can always fund it back. We're continuing that answers your question. Riley is yes.

The FTE count remains the same. We're not increasing an FTE count, but we're not removing. We have a city has lots of classifications that are unfilled and they don't have FTEs assigned. We have a lot of extra job descriptions essentially that are assigned a wage grade. so that if they're ever needed in the future we already have the job description we come to the council we ask for another fte we have the job defined already that we can use so

budget time the budget for next year is going to be 43 positions actually maybe 42 funded positions only so it'll actually be minus one funded positions but the job descriptions are still out there they just won't be in the budget will having this position offset any overtime that you currently have in your department Because currently, one thing though, without having this position there, we have a lot of our jurymen and other positions have to do duties that kind of fill in, do other things. So having this position will help organs and help them perform more of their tasks and their actual job and decrease the overtime. So there's not, sometimes those other duties lead into having to do They can do their normal duties and the normal workday. The other stuff is taken care of so we don't have to have that overtime. So it will decrease overtime costs as well.

Follow up to that do we have somebody ready for this position or is it going to sit vacant and not solve any of our problems that we're presenting here?

We do have somebody in mind that is currently working.

Okay, but if I can clarify just a little bit again, the. The council's being asked to create a classification to assign a position, a job description to a wage grade appropriate to that job. creation of a job description is within the manager's responsibility under our code and charter so we've gone through the process to create the description that operationally we need this position we have the ftes that council has approved and the budget that council has approved and we're asking you to create the classification so you're not again you're not adding a position

to the staff does that make sense i don't think i'm explaining it very well i get it yeah anybody else yes didn't wasn't this position wasn't there a similar position like this before

person retired, it was removed from a compensation. But we did also redo the job description because a lot of the duties that position did before aren't relevant anymore, just technology and different things. And we're also passing on some of the duties from the assistant manager position to this position. So it's it's same but different.

That's kind of what I figured. Okay.

Just to clarify, because now that statement got... So you just said removed from compensation plan from before. So the one that you're reclassifying as you use, is that getting removed from the compensation plan or not?

It is not.

So why in the past would we, when this position became vacant and we didn't want to use it, we removed it.

I don't think that it was actually removed in the sense of it didn't come to council and a vote to remove it. What happened was there was an update to the classification plan. It happened to be vacant at the time. They didn't think they needed it anymore and they didn't carry it forward into the classification plan.

The one difference in this, this is a unique position. It's a unique title. There's no other key few divisions that have it, no other city divisions. Whereas the positions that we're not funding in the county, that customer service special, there's other positions. There's other people in those positions because there's multiple of that same job class. So that's what makes this one a little bit different because it's its own job description. There's no other same position in the city.

Yes. Yes. Yes. Bradbury.

No, yes. Passes your on.

Thank you bring this to item e, resolution number 26, 3031, endorsing the service, like, hydro unit. Modernization and couldn't see additional project at the middle of a grant application to the energy. Authority renewable energy fund round 19, many met in resources. And providing the council approval of the grant agreement. Do I have a motion?

Your honor, I move the City Council approve resolution number 26-3031 endorsing the Silvis Lake Hydroelectric Unit Modernization and Efficiency Addition Project, authorizing the submittal of a grant application of the Alaska Energy Authority Renewable Energy Fund, Round 19, committing matching resources, providing for Council approval of the grant agreement, and establishing an effective date.

Second. And then can we take a break?

You want to take a break before the discussion?

No, I'm not.

Okay.

Abner, what do you have? Yes, Mr. Mayor, I asked the electric division manager to come up and he has a presentation ready to give you on this, I believe.

Thank you, honorable Mayor, council people. Thank you very much. This is, I believe, my fifth grant so far that we put it in for. And my express purpose of the grants is to take the money off of the rate payers and shift it over to federal funds and get as much dollars being paid by, quote unquote, other people's money that we can do and apply it to our infrastructure outbreak. And just recently we had some experts come in from Kenyon Power. And we had a vibration problem on that unit. Unfortunately, when they're looking and testing it, there's some frequency tests they do, and there may be a possible crack in the shaft. So that shaft is about this thick and so long, and that's the main spinning component of the whole hydro. So we'll be looking at that. We'll have them come back. We're going to blue it and look to see what the crack This is a very timely grant by the Renewable Energy Fund to do it. It's for $885,000. And that's what the ask is. Go ahead, next slide. Okay, and you guys see that kind of. whole grant is for 1.2 million. The 88 grant would cover $885,000 of that. And it's only $150,000 cash from the general fund and 175,000 is in kind work from our own staff. And that's that's part of our contribution to the grant. So that was a very, very kind of good way to structure the grant. The RFA opened on July 13th. The AEA, I've spoke with them on the phone and correspondence with email. They've looked at the grant already and the grant people at the, I would say are very accommodating. I was able to send them the grant to look at it. They commented it and sent it back. And the request was designed for phase one and phase two only. So this is just the design portion. Next slide. Okay, so this is all of what the project includes. It includes the rotating parts. And part of the failure the last time that we had it was is out of service it costs us money so what this grant would do is it would have canyon power build out the spinning portions and then bring it to the site and install it and that would be the shortest window of an outage that we could to get get the unit completely rebuilt also it replaces the relays as well in there And syllabus is two megawatts of our base load. And we would look at updating the controls as well. Next slide. Okay, so this is just a couple of pictures of the units right here. This is a picture of the syllabus units itself. The penstock inlet is that big pipe that you see that brings the water that spins it. The next slide you see is that's the mechanical governor. And it's an old unit and we would be looking at what kind of upgrades or things that we could do to upgrade the governor. And then the last slide, the last picture there on the right are the mechanical relays. And that's much like the same thing that we talked about in the first one. We would be replacing those mechanical relays with the new modern digital broken the silvus generator, we would avoid those kind of events and protect our equipment more reliably with a digital relay. Next slide. Okay, so this is just basically it again, new rudder, new shaft, new rotor, new bearings, completely assembled at the factory, spun on their wheels. The new station PLC, existing PLC is the brains and it's about 25 years old. It's obsolete. You know, it's time to go. Can't get parts or the parts are very hard to get anymore. The SEL relays like we talked about and then the OK. So like we said, this space right here is the feasibility and the conceptual design. And phase three would be the final design and permitting, which would be the, you know, the FERC permitting and everything else. The good thing about this grant is there's a next phase to apply for it. So we apply for this phase, get the design engineering. Next phase is construction. because these grant windows come open and then they come closed and it's like a three or four week window. So you have to be pretty agile and ready to go when these opportunities present themselves. Okay, and this kind of breaks down the money portion. Who pays for $885,000 of design work? comes out of our own crews and KPU has already invested a lot of money in this unit. One million dollar rewind that we just recently had. That rewind was a total cost of 1.75 million. The $750,000 was lost revenue when that generator wasn't working. Next slide. Okay, so what does the community get back? So when they redesigned the runner, they looked at the runner and said, yeah, the runner's bent. which equal $34,000 a year, free money coming to us every year. So that's another benefit of doing this work is the improvement will buy us 34 grand a year for as long as that unit runs. And the 390,000, obsolete PLC and relays that we would have to replace anyway as part of capital project. And the 1.03 to one is just the way that it's weighted. It makes it hard to win the grant, right? If our rates, if we were in Alaska and we were paying 45 cents for a kilowatt hour, and then it would be much easier to win the grant because that's a much higher cost and there's bigger benefit of return to the rate payers. So the low rates sometimes negatively affect how I need to do my job. Next. And what happens next? Well, September 11th, the applications are due. So I need you guys to approve the resolution. Once the resolution is in the grant package, it strengthens the grant and makes it possible for me to apply. AEA will review the scoring in fall. Early mid-2027, the legislature appropriates the money. And possibly by mid-2027, construction sequence. Hopefully by 2030, it would be constructed and fully implemented. And the next slide, please. And that's it. That was my last slide. I'm glad to take any questions or possibly walk you guys up there. If you guys have time to visit the site, I'd be happy to do a site visit with you.

So, Robert, this portion is just for the design. What would be the cost of the project?

But we're stacking grants and the potential of getting the majority of that thing. Yeah, this would be the design portion only. And then the rest of it for the construction would be in sequence later years. And the grant, because we get the design portion, it's easier to get the construction portion of the grant on phase 3 and phase 4.

Any questions? And of course, if we apply for the grants, then we'll have a discussion of accepting the grants and all of that. Right.

Exactly. It would be the council's discretion of whether you want to accept it or apply for a grant.

Right. Any other questions? Hearing none, please call the roll.

Finnegan?

Yes.

Bradbury? Yes. Gass?

Yes.

Gage? Yes. Foose? Yes. Zingy? Yes.

Thank you. That brings us to item. Right. Oh, great. Yeah. so we'll come back to order we are now on 7f resolution number 26 30 32 providing for a submission of qualified voters in the city of ketchikan who was a serious tradition municipal utility revenue bond in the principal amount not to exceed 25 million dollars to provide funds for electrical utility facilities so motion

Your honor move the city council approve resolution number 26 dash 3032, providing for submission of the qualified voters of the city, the regular election to be held in the city on October 6th, 2026. Of a proposition as to whether the city should issue electric revenue obligations in a principal amount, not to exceed 25Million dollars. To finance the cost of the acquisition, construction, reconstruction, repair, improvement, extension, enlargement. and or equipment of various electric utility facilities including belly generator port west substation bailey substation mountain point substation electric division service center and ward cove substation and establishing an effective date second it had been moved and seconded after

Thank you Mr. mayor, the finance director is here tonight. I probably speak to this better than I can, but this, this item is related to some large electric infrastructure projects that we have coming in the future. And the council had a discussion on this previously on how you might want to put this to the voters to build issue revenue bonds if we need to. And the discussion that time focused around doing $25 million, $25 million, $25 million. And in order to do that, it has to be on the ballot October 6. And so therefore, this item is on your agenda so that it can go before the voters to authorize that. Did I get it all, Michelle?

You did good.

All right. I got it right.

You got it right. So Abner, we got all these projects in front of us. How do we this is or suspect being to do, but is there a process that we will go and evaluate the substations and the generators and test them to see exactly what we need to replace?

We'll still go through our normal capital budgeting process and evaluation process. Having the authority to issue these bonds doesn't mean that the Council has to actually take them out and use them. Robert's been working on grant funding. We'll try to seek other ways of funding those things, but we need to have the authority to do it at the time that we need it, and that's the reason that this is on here.

Similar to our water grants and sewer grants, we don't pay anything on those grants until we draw the money out. Is that correct?

I believe that's correct.

Yes, I'm seeing head nods. Any other questions? Hearing and seeing none, please call the roll.

Gage? Yes. Zingy? Yes. Gass?

Yes.

Finnegan?

Yes.

Hoos? Yes. Bradbury? Yes.

Okay, Patterson, bring us the H, resolution 263022, approving loan number 481211-S and 481221 to the city of, by the Alaska Department of Environmental Conservation, So authorized by ordinance number 18 dash 1867. Approving forms of the loan agreement, affirming the city junior lean pledge of revenues of the municipal wastewater utility to secure payment on the loans. Do I have a motion?

Your honor, I move the City Council approve resolution number 26-3022, approving amendment number 1 for loan number 481-211S. Approve loan number 481-221S to the City by the Alaska Department of Environmental Conservation as authorized by ordinance number 18-1867 as amended by ordinance number 26-2030. Approving forms of the loan agreements, affirming the city's junior lean pledge of revenue of the municipal wastewater utility to secure payment of the loans and establishing an effective date.

It has been moving 2nd, I'm going to ask the assistant city manager and. Seth to come up and talk about this 1 and or. We'll bring a whole group up again. I'll talk about it. They do all the real work. Anyway, we know this, right? Yeah, we know that.

This is these are the loan agreements. So. I stated, we've already passed the ordinance for the debt. We get bond authorization. The ordinance 18, 1867. And then earlier this year, we had an ordinance amending that bond authorization for these specific loans. This resolution is accepting the actual loans and what's in the loan agreement. It's just the last step in the process.

Thank you. And Seth, a lot of this I think is to manage the increase in regulations that we've been Passed with that correct?

Yes, mayor, Seth, public works, director, engineering manager. Good evening honorable mayor and council members 2 components of this 1 being the water street sewer project. We had a successful phase a, that was completed here this year. This will move us to. Fun phase Bravo. Disinfection improvements that's required by, or do you discharge permit from the EPA and. With the state of Alaska, so that's a requirement.

Thank you just to confirm the current rate structures that we have in place will cover the debt payment for these loans.

We need to stay on top of the five-year plan. So this last year's 8% paid for the first phase. This year's 8% will help fund this phase, will pay for this phase. One of the loans is a full, it's a million dollars and there's a million dollar subsidy. So we don't have debt service on that one. but we still have to go through the long process. It's the water stream second phase that requires the additional net service.

Anybody else? If you're seeing none, please call the roll.

Gage. Yes. Boos. Yes. Yes.

Yes.

Finnegan.

Yes. Yes, yes, thank you bring this to item 8 with the doctors. We have none brings us down to the minute.

We have, of course, Abbott. Thank you, Mr. Mayor. The manager report that you had in this week's council packet was a little bit different than what you've seen in the recent past. I just wanted to highlight for you that what I plan to do with this report going forward when we have these long attachments is I'll provide you in my written report a brief one to two paragraph executive summary so that you can skim my report. And then if you want the additional backup information, you can go to the longer attachments. Hopefully that helps you with being able to digest everything that we give you in these packets to look through in a short time frame. Then in addition to that, I just wanted to mention a couple of key items that were in there. The fact that we received the limited alternative to filtration concurrence letter from the EPA and the final the interim order from adec to operate is very good news for the community that was a six year four month and three day process according to our contact at adec that's how long she was working on this and so to have that come through is is really good news it is an interim order we do have to continue meeting all of the standards that we've been meeting and um In a year, then that will go final. So I want to thank the water department for all the work that they've put into that. Effort over the years as well as our. Our consultant support at Jacobs Engineering and ADC for their work as well. They've helped us through that. The next item I just want to mention briefly, Southeast Conference is going to be here in September. They have asked the city to sponsor the community night. We typically have done that in the past when it's hosted in our community. And so we have the budget for that in the council's community promotion account, and my intent would be to approve that. I just wanted to inform the council of that. They're asking for $5,000 upon payment for receipts for things that they purchased during that community night. Next thing I wanted to mention, the designated legislative grant. Representative Bynum mentioned that. That's the $6.7 million in grant funding from the state using reserve balance of CPV funds that they had collected. And we did receive notice of that grant. It has broad applicability for harbor projects as well as port projects. And so I've asked the port director to identify some existing projects that we can use to fund that, that we might not normally be able to fund with CPV funds. And I believe we're finalizing that list and we should be getting agreements from the state and I'll bring those back for authorization to enter the agreements. Uh, retirements, we had 2 long term employees retire over the past couple of months. Steve hostage retired from building maintenance on June 30th after 25 years with the city and the 10 Andy burns in on July 31st. Also, after 25 years, we thank them for their service. We wish them well in their retirements.

I think I have 1 more.

There's also a item in there about the landslide grant update USGS grant. I received some questions about that as to whether there was initially a match or not. The original information that council saw several months ago, the project was gonna be $100,000, 70,000 was gonna be federal with a 30,000 local match. Some of the scoping was adjusted and the overall project cost has gone down to $62,000 instead of $100,000 and a local match of 12,000. $188, which would come from the public works engineering and architectural services account. The other excuse me, the other question was about this might appear that it has an area wide benefit, but it was only being covered by the city. The borough doesn't have any rain sensors currently. The city does. And so the modeling that's being done under this project is really for areas within the city. later on if the borough adds additional rain sensors outside of the city limits then those could be added into the model for additional cost and to extend that model but right now what's what's contemplated is within the city so it's not an area-wide issue and i believe those are all the items i was going to highlight unless there's any questions for me any questions during the council committee reports

We have one from the library and we had one from my visit to Brent Rupert with Southeast Conference. City clerk's file?

Nothing, your honor.

City attorney's file.

He didn't mention anything.

I'd like to thank him for his notes and a list of projects that he's working on. Future agenda items. Brings us to...

mayor and council comment abby um just congratulations to steve and andy on the retirement that's all thank you dana lee yeah um congratulations to steve and andy i've known steve a long time I should be excited. I want to extend my appreciation for your report, Abner. It was very helpful and it was nice to see that the sales taxes are increasing. Kind of catching up. The landslide, so basically that was kind of interesting that we are the only ones that have sensors within the city.

We have two currently.

So it dropped from down to the 12,000 versus the... From 30,000, correct. Yeah, nice. Nicely played.

Judy. Well, of course, congratulations to Steve and Andy. Congratulations on the LAF approval. That's pretty outstanding. And to the Arts Council for a very successful blueberry festival. Oh, yeah.

It was.

That's all I got.

Dick, what do you have for us? Nothing, Your Honor.

Riley. Also, sincere congratulations to two gentlemen who are retiring. And yeah, I was going to say what Judy said. That's a big, big win. That's been like top topic since before I got involved with politics here. and surprising great news one i mean it's like every time we talk about raising all the rates and taxes and stuff the one thing i always hear is i'll just wait till we have to do this water thing and now to at least have some not bad news good work everybody on that yeah yeah uh

I'd just like to thank Mr. Briggs. I don't know if he's still in the room, but I really appreciate the work he's undertaken to pursue these grants and to present that information to us because getting ourselves out of the sort of morass we've been in stuck in with infrastructure surrounding. Electric is is a big priority. It certainly is for me. I think it is for many of us here on the council and I'll be the 3rd hand beating that same drum on the. I know it's an interim approval. I have full faith and confidence in our water department and city staff to get through this next year of testing and. I'm sure there's a load of paperwork, but I will say I think it's the only time I've ever read a manager's report and then texted my wife about something I read in there because she watched these meetings and we were both pretty excited to hear that this was actually, that we had that initial form of approval. So big, big thanks to the many, many staff members who've worked over the years, the six months years to see that through.

Thank you. Yeah, the LAF was a big thing off the platter for these guys and there was only one other place in the United States that had one that was in Seattle, right?

Yes, I believe so.

And we had the full support of ADEC and went through this because and Carl Lamelon was the manager when we started this process. We met all the criteria and we had some pushback and everything. Our consultant worked very well with ADEC to draft and formulate the plans to present to EPA 10 and then the EPA DEC in Washington DC. Our state senators got involved in this and kept pushing and kept pushing right up till this last month when they sent letters over to make sure that this thing was moving forward and getting it done. Like you said, our staff have been just fantastic in this process. along with all the presentations and i'm always pleased to see individuals able to retire from their from the world and hopefully enjoy it go on to a long life in retirement steven and have been a great employee to the city again they could they contributed a lot outstanding members of the community and i'm sure we'll see them around the block so really thank 1 of the things that when, uh, the, the representative by him gave it to the presentation. He said, make sure and get some grants in. So I want to make sure that we follow up on that and have some grants. Uh, you know, written and if necessary, we have some. Design tool or show them ready for some of those things. So, we. Um, and then, uh. I think that we have the revenue bond that has to be presented to the voters, correct? And you'll have all the information in regards to the uses. And again, I'd like to thank the community and the Arts Council. The Blueberry Festival was a phenomenal event for the city in Ketchikan. I think it was well-intended. The weather held off. It all worked well. Also, Robert and I were able to meet with SEPA and the Arctic Energy representative here in Ketchikan and tour our facilities and looking for more opportunities for grant funding. Like you said, using the federal and state monies that are available to help us with our projects and infrastructures.

So they gave a great tour, a lot of information.

They got positive feedback from the individual in the ways of letters and responses to her. So I'm hoping that'll bear fruit. We'll get some more stuff under the different types of grants. One of the things they did mention is the grants under those organizations no longer list wind and solar. It's nuclear, hydro, on today. All good information. They work with the Department of Defense, and so anything that we have here going with the Coast Guard only promotes our ability to gather those funds and improve our infrastructure. And with that, I don't have anything else, so do I have a motion to adjourn?

Move to adjourn.

Hearing nobody opposing. Thank you, guys.