The Sitka Assembly on Tuesday (5-12-26) passed the city’s final operating budget and capital improvement plan for Fiscal Year 2027, which starts on July 1.
Municipal Administrator John Leach said this year is closing in a financially stable position, but notably tighter than recent years. He said the gap between what the city brings in and what it costs to operate has continued to narrow and it’s shaped every decision reflected in the budget. He said while the budget doesn’t resolve every long-term pressure the city is facing, it’s a “clear-eyed response” to where things are right now.
“Sales tax remains our foundation, but we’re watching the tourism season closely, and federal funding uncertainty continues to create planning challenges for all of us,” Leach said. “Fuel costs for me are a particular concern this year, and those hit us on both sides of the ledger. So it raises our own operating costs, while it also potentially dampens visitor activity and sales tax revenue that comes with it.”
To balance its books, the city had to cut about $900,000 from the proposed budget. Those cuts include the purchase of two patrol cars for the police department and a police sergeant position, as well as $250,000 for athletic field sand.
The assembly also approved the enterprise fund budgets on Tuesday, which include another round of rate increases to keep up with maintenance and infrastructure costs. While electrical rates will remain the same to give Sitkans a bit of a break, there will be a 6% increase in water rates, 2% increase in wastewater, 2% in solid waste, and 4% in harbor rates.
Leach said in a memo that the budgets prioritize maintaining the city’s core services, supporting strategic initiatives, and preserving long-term financial sustainability for Sitka.
The budgets were approved by the assembly on first reading. They will review them for a final reading on May 26.
