City clerk Sara Peterson read the oath of office to Gary Paxton, Valorie Nelson, and Kevin Mosher to the Sitka Assembly. (Emily Kwong/KCAW photo)

The Sitka Assembly saw its annual changing of the guard Tuesday (10-09-18), with a new mayor at the helm – Gary Paxton – and two newly elected Assembly member, Valorie Nelson and Kevin Mosher. Assembly members Matthew Hunter, Bob Potrzuski, and Ben Miyasato stepped down. Steven Eisenbesiz, Kevin Knox, Aaron Bean, and Richard Wein will remain on the Assembly. 

Downloadable audio.

Before stepping away from the bench, each departing Assembly member took a turn at the microphone.

Ben Miyasato praised those who ran and those who voted, saying it isn’t easy to run nor easy to lose. Miyasato lost to Paxton in his bid for Mayor, and said he would run again if asked by citizens in the future. He was nominated to a one-year term in 2017 and previously a three-year term in 2013. The career military veteran offered parting ideas to the incoming Assembly, such as the establishment of a commission to prioritize public work projects.

“To have that commission created would be good for our city and for what needs to be done and for our infrastructure,” Miyasato said. “Also, we need to have a freeze on our taxes and utility rate increases. We don’t want to chase everyone away. We love this community and want you stay here.”

Elected in 2015, outgoing Assembly member Bob Potrzuski served a three-year term after a long career in the Sitka School District. He thanked the community of Sitka and looking around the table, his fellow Assembly members — four of whom are former students. 

“I never predicted that I’d have an opportunity to share a whole different experience with these fine men…[any more] than I did with the really fine young men that I did in high school. Thank you gentlemen for being up here with me. It was pretty cool,” Potrzuski said. Those four students are Matthew Hunter, Steven Eisenbeisz, Kevin Knox, and Aaron Bean. City clerk Sara Peterson was also in Potrzuski’s class in high school.

Deputy Mayor Eisenbeisz presented each outgoing Assembly member a certificate and to Hunter, a special gift. “The city has gotten you a gavel, so that you may continue gaveling,” Eisenbeisz said, holding a wooden box with the gavel resting inside. “Serving as a lieutenant with the EMS division in the fire department is a time consuming enough job, let alone being Mayor. So while I’m sure it’s bittersweet, enjoy your Tuesdays,” he added.

Taking the microphone for the last time, Mt. Edgecumbe teacher and outgoing Mayor Matthew Hunter momentarily lost, then found his words while quoting former city administrator Mark Gorman. He elected to the Assembly in 2012 and as Mayor in 2016. 

“A few years ago, Mark Gorman said something that I found quite profound. (Pauses) I do have some emotions down in there pretty deep. (Laughs) What I was going to share was his comments about how beautiful it is…to live…in a democracy,” Hunter said, holding back emotion. The crowd applauded. Hunter thanked them.

The Assembly then certified the results of the election, took a quick break to eat cake, and when they reconvened, Gary Paxton was sworn in as Sitka’s Mayor and Valorie Nelson and Kevin Mosher were sworn in to the Sitka Assembly..

The past year has been a turbulent one for the Sitka Assembly, with major battles over healthcare, taxes and tax exemptions, art galleries, the herring fishery, and more playing out in these very chambers.

Taking the microphone, Paxton called for a cooperative standard of conduct. He wants to foster civility and trust between Assembly members, with citizens, and with city staff. “We just have to, in this wonderful town, reduce some of the negativity and look for the best in each other rather than the things that bug us,” Paxton said.

Paxton said he also wants Assembly meetings to move efficiently. “Four hour meetings don’t make for good decision making late at night,” he said. He then asked the Assembly to move through routine matters succinctly and proposed eliminating the three-minute timer for persons to be heard, saying he would tap the gavel to encourage a speak to wrap it up. That has not taken effect, but may in the future.

For the second year in a row, Sitka Community Hospital won the Alaska Nursing Home Excellence in Quality Award. The Assembly recognized members of their long-term care staff Tuesday night (10-09-18). (Emily Kwong/KCAW photo)

Assembly takes forward steps with new seaplane base, airport improvements

The previous Assembly made it a priority to build a new seaplane base for Sitka. The new Assembly supports that project.

They unanimously authorized City Administrator Keith Brady to procure a letter of commitment from the state to acquire land for the base. The preferred location is on Japonski Island, northwest of Mt. Edgecumbe High School. The land is currently owned by the state Department of Education.

In addition to conveying the property, the resolution states that the project is eligible for 100% federal funding. The city will seek that money through an Airport Improvement Grant from the Federal Aviation Administration. The Assembly also approved, on first reading, appropriating $50,000 from the working capital fund for the “initial stage of acquiring the seaplane base.”

The Assembly also furthered outside funding efforts for renovations Sitka’s Rocky Gutierrez Airport. They passed a resolution in support of the state Department of Transportation seeking Airport Improvement Program grant funding. The city plans to request up to $10 million. The previous Assembly authorized issuing $4 million in revenue bonds for the project, which will be paid  through passenger facility charges ($4.50 for every enplaned passenger)

Executive session held for hospital update; negotiation team announced

At the end of the meeting, the Assembly entered executive session from 8:15 p.m. to 9:30 p.m. to receive an update on pending negotiations between the City and Southeast Alaska Regional Health Consortium.

When they emerged, the Sitka Sentinel reports the Assembly announced that the city’s negotiating team would include Sitka Community Hospital CEO Rob Allen and Dr. Roger Golub, representing the hospital’s medical staff. The team also includes City Administrator Keith Brady, City Attorney Brian Hanson, consultants Sarah Cave and Steve Huebner, and legal counsel Sandy Johnson. Paxton said he intends for the city to give updates about the negotiations in open session, adding, “It’s part of my expectation to increase trust.” 

Roles, Responsibilities Assigned

Steven Eisenbeisz will continue as deputy mayor, running the meetings when Paxton is out of town. Valorie Nelson was nominated vice-deputy mayor. The Assembly majority favored Nelson over Aaron Bean, whose name was put forward by Gary Paxton. 

The 7-member body also divvied up liaison duties among the city’s boards, commissions, and committees:

Sitka Community Hospital Board: Richard Wein, with Steven Eisenbeisz as alternate

Gary Paxton Industrial Park Board of Directors: Kevin Mosher

Health Needs and Human Services Commission: Richard Wein

Historic Preservation Commission: Valorie Nelson

Investment Committee: Richard Wein

Library Commission: Richard Wein

Local Emergency Planning Commission: Valorie Nelson

Parks and Recreation Committee: Kevin Knox

Planning Commission: Aaron Bean, with Kevin Mosher as alternate

Police and Fire Commission: Valorie Nelson

Port and Harbors Commission: Kevin Knox

Tree and Landscape Committee: Steven Eisenbeisz 

Informational Liaisons

Sitka Economic Development Association (SEDA): Gary Paxton

Sitka Tribe of Alaska: Kevin Mosher, with Aaron Bean as alternate

Sitka School District: Kevin Mosher, with Valorie Nelson as alternate

While other communities in Alaska are approve plastic bag bans, an effort to impose a local plastic bag fee failed to pass muster with the Sitka Assembly. On Tuesday night (09-28-18), they indefinitely postponed the ordinance and encouraged new plastic bag legislation to come to the table within the year. (Photo courtesy of Naomi Bargmann)

Sitka will not be placing restrictions on plastic bag use. By a vote of 6-0, the Sitka Assembly indefinitely postponed voting on a single-use carryout bag fee on Tuesday night (09-25-18). The measure was intended to disincentive use of plastic bag and change shopping habits locally. The Sitka Assembly also approved issuing state revenue bonds to finance renovations at Crescent Harbor and the Rocky Gutierrez Airport. 

Downloadable audio.

The idea for the ordinance (Motion and Ord 2018-47) was pretty straight forward: charge Sitkans a flat fee for single-use bags–15-cents for plastic bags and 10-cents per paper bag– at check-out. The money collected would go into the general fund.

The ordinance passed muster with the Sitka Assembly on first reading two weeks ago (09-11-18) by a vote of 4-2, with Steven Eisenbeisz and Aaron Bean voting against. But this time around, the winds had changed.

During their regular meeting Tuesday night (09-25-28), Assembly member Kevin Knox made a motion to indefinitely postpone the ordinance. It was unanimously approved by the Assembly, by a vote of 6-0. Assembly member Steven Eisenbeisz was absent. Assembly members Knox and Wein expressed verbal interest in developing another version of a plastics ordinance within the year. 

So what changed in the last two weeks? The Assembly member’s inboxes and phone lines were flooded by Sitkans who opposed the legislation outright. Some came to the meeting in person to say so. Dave Lamb said, point blank, “It’s a poorly conceived ordinance. This should be killed.”

Comments like that gave even the sponsors pause. 

Kevin Knox: You always think you might be able to gauge the amount of correspondence we might get on any particular issue. This one I was way off on.

Richard Wein: I was thinking, ‘Fifteen cents a bag. That may not be so bad.’ But as it turns out, people thought it was very bad.

Bob Potrzuski: This is not the correct bill for Sitka. And when [Knox] suggested postponement, I immediately went to, “We can do better.”

All on the Assembly supported plastics reduction in some fashion, recognizing the disastrous impact plastic pollution has on the marine environment. But Assembly member Ben Miyasato worried about how a fee would further harm the lowest income Sitkans. “Fifteen cents doesn’t sound like a whole lot to some of you. But to others, that’s the difference between whether or not they’re going to be able to get more food or starve,” he said.

Mayor Matthew Hunter worried about the accounting work a fee creates for small business. Other communities in Alaska, including Anchorage and many cities in Western Alaska, are banning plastics altogether. Several on the Assembly wondered aloud if Sitka should follow suit – pursuing a plastics ban instead of a plastics fee.

Supporters of plastics legislation implored the Assembly to do something and do something soon. “Palmer is starting on this road. Kodiak,” noted Chohla Moll. “We’re not breaking trail here. We’re coming up behind and this is our subsistence foods.”Naomi Bargmann told the Sitka Assembly, “I just want something to be done, where I’m not paddle boarding out at Herring Cove and I turn the corner and there’s a plastic bag sticking in the branches.”

With the Assembly’s postponement, nothing about plastics will change anytime soon. The postponement kills the ordinance, but the spirit of the idea was still alive at the table. Assembly members said they hoped the legislation could be re-crafted — made more palatable to a great number of Sitkans — and brought forward again at a future date.

Mayor Matthew Hunter asked for a commitment from Knox and Wein to develop a new version of the legislation within the next year. They verbally agreed. “I am encouraged to hear that Dr. Wein that you are willing to continue to work on it. I’ll work on it with you as well,” Knox said.

The citizens group, Bags for Change, has been marshaling support for plastic bag reduction for over two years, handing out reusable bags and coordinating with local businesses. They approached the Assembly with the notion of a plastic bag fee in February. 

After the Assembly’s decision to postpone, I called organizer Michelle Putz. She said her disappointment has a silver lining. “I’m sad that it hasn’t moved forward. But in a way, by it not moving forward, people are learning and maybe even changing what they’re doing because of it,” Putz said.

Meaning a change in plastic-use behavior. Moving forward, Putz said she would support the Assembly in any legislation they introduce. “I think [Bags for Change] would be happy to see a plastic bag ban in Sitka. It will probably have to include a fee on paper. But, seeing as people were really concerned about the city collecting it, I would be happy to see that [money] go to the businesses to offset the costs,” Putz said.

Any plastics legislation, however, depends on the will of the future Assembly. The municipal election is Tuesday, October 2nd. Two seats on the Assembly and the Mayoral seat are up for election. On October 9th, the election results will be certified and the new Assembly members sworn in, with Hunter passing the gavel to the new mayor.

The Sitka Assembly also approved issuing state revenue bonds for capital projects. By a vote of 4-2, with Richard Wein and Aaron Bean voting against, Sitka will pursue two bonds from the Alaska Municipal Bond Bank.

The first, not to exceed $8.6 million dollars, will finance part of Crescent Harbor’s reconstruction (Floats 1 – 4) and be paid back through fees collected among harbor users. Moorage rates were raised by 6% at their September 11th meeting. Mayor Matthew Hunter said that rate is sufficient to finance the bond. “We have a rate currently that can handle this debt. What the rate currently can’t do is handle [electrical upgrades to] Eliason Harbor.”

To meet the capital needs for Sitka’s harbor system into the future, the Harbor Master Plan suggests a 300% increase to moorage rates over the next several decades. Hunter continued, “If we stopped raising rates, harbors would be fine until a decade from now…when it is time to replace Eliason Harbor.”

To bolster the Crescent Harbor project, the state has offered Sitka a $5 million matching grant. The entire project costs an estimated $13 million.

Wein and Bean called for other funding strategies for Sitka’s harbor system, such as the local sales tax or the city loaning money to itself. “I would like the funding source to change and bring the millions of dollars of interest that will be going out of Sitka back into our own coffers,” Wein said. “My only disagreement here is in the method of financing, not necessarily the concept of doing something good.”

The second bond, not to exceed $4.5 million dollars, would go towards renovating Sitka’s Rocky Gutierrez Airport. The city plans to pay back the bond through passenger facility charges (PFCs), which amount to $4.50 per enplaned passenger. The project seeks to expand the passenger holding and baggage handling areas.

Over the phone, David Thompson, the City and Borough of Sitka’s Bond Counsel, answered technical questions.

In other business, the Sitka Assembly:

–Approved selling Lot 23 at the Gary Paxton Industrial Park by an invitation to bid process. The lot houses the former administrative building of the Alaska Pulp Corporation and was damaged by a landslide in 2015. GPIP Executive Director Gary White said, “It’s a non-performing city asset and a liability.” He estimated it cost GPIP $30,000 to $50,000 to maintain and hoped another business could find a use for the lot.
–Directed City Administrator Keith Brady to transfer a general fund balance of $679,320 into the Public Infrastructure Sinking Fund. In a memo, Brady said he recommends no money be transferred due to “unforseen expenses relating to the hospital sale and the potential reinstatement of the senior tax exemption.”
–Received a reminder from City Administrator Keith Brady that the sales tax will be 5% and utility rates at 12-cents per kilowatt hour beginning October 1st. The new director of Sitka Public Library will also begin October 1st.
–Designated November 23rd and 24th as sales-tax free holidays. They also approved including alcoholic beverages, tobacco, and marijuana products on the list of items not eligible for sales-tax exemption on those holidays
–Approved adjustments to the port and tariff schedule for the multi-purpose dock at the Gary Paxton Industrial park
–Approved supporting Sitka Trail Works in submitting a state grant application (maximum $75,000) for repairs to the Sea Lion Cove Trail
–Appointed Charlie Woodcock to an unexpired term on the Health Needs and Human Services Commission and appointed Vaughn Morrison to a two-year term on the Gary Paxton Industrial Park Board
–Entered executive session at the end of the meeting around 9:35 p.m. to hear a report from city staff on their month-to-month contract with the Greater Sitka Chamber of Commerce to manage visitors services. When the Assembly reconvened around 10:10 p.m., no motion was made and the Assembly adjourned. Earlier in the meeting, Chamber Executive Director Rachel Roy announced that Sitka will host the 2019 Southeast Conference.

In a previous version of this article, we incorrectly stated that Richard Wein and Aaron Bean voted against the plastic bag ordinance on first reading. The “no” votes were Steven Eisenbeisz and Aaron Bean. 

Plastic bags take between 500 and 1000 years to break down. They never fully biodegrade. A group called “Bags for Change” is leading a local effort to impose a plastic bag fee. (Renusha Indralingam/KCAW photo)

Sitka has taken the first step towards passing policy to reduce plastics in the environment, joining the ranks of other communities around the state. The ordinance – passed by a 4-2 vote on first reading by the Sitka Assembly Tuesday night (09-11-18) – would require vendors to charge customers 15 cents for every plastic bag and 10 cents for every paper bag.

Though the Assembly extended their meeting until 11:15 p.m., but did not complete their agenda. Those include items I through M and Item O. They’ll take up those items on September 25th, though a special meeting may be called if necessary.

Downloadable audio.

The money would go into Sitka’s general fund. The hope is for less plastics in the environment. The public show of support for a plastic bag fee was strong Tuesday night. Fifteen citizens spoke in favor, including Jennifer Carter. “If Anchorage can do this, we can do this. If Hawaii, the entire state of Hawaii can do this, we can do this,” said Carter.

Doug Osborne, Chair of Sitka’s Health Commission, also endorsed the ordinance. “Sitka grocers alone distribute $2 million plastic bags annually,” he informed the Sitka Assembly.

Plastic pollution on land and sea is a global problem. Advocates for the law said the fee would be an economic nudge to shoppers to bring a reusable bag when they shop.

Michelle Putz leads the citizens group Bags for Change. In the past two years, they’ve advocated for a plastic bag fee and distributed reusable bags across town to set the wheels in motion. “I’d like to think of this as Sitka’s plastic solution pollution revolution. We’re starting that here now,” Putz told KCAW.

Bags for Change polled 250+ citizens at Sitka’s three grocery store. Their survey found that 70% of shoppers favored a ban or a fee. A Sitka Chatters poll with 420 online participants saw 53% in favor. It was a mountain of data and advocacy, which persuaded the majority of Assembly members.

Those in dissent disputed the ordinance for economic reasons.

Assembly member Aaron Bean saw the fee as yet another tax on citizens. “I see a fee as not a very good solution to a very serious problem. If the idea is to reduce plastic bags in the community then we need to ban them,” Bean said.

Assembly member Steven Eisenbeisz said he could not support the ordinance as written because it created more accounting work for business owners. Since retailers are upholding the fee, he argued, they should be compensated.

“I think that there is a cost to the businesses and we need to consider that as well. The other half of the money I think should go to the solid waste fund,” Eisenbeisz said, since the solid waste fund pays for the disposal of plastic bags.

Eisenbeisz then made a motion to re-write the ordinance, saying the collected revenue should be split between retailers and the solid waste fund. It failed for lack of a second. Eisenbeisz owns a local business, but Mayor Matthew Hunter ruled it was not a conflict of interest because he is a part of a class of small business owners and not speaking for himself.

The plastic bag ordinance passed as written by a vote of 4 to 2, with Eisenbeisz and Bean voting against. Assembly member Bob Potrzuski was not on the phone at the time to partake in the vote.

In other business, the Assembly raised harbor rates by 6% as planned in their FY18 budget.

They also authorized, on first reading, issuing revenue bonds to pay back state loans for future capital projects. The vote was close, 4-3 on both projects: Phase 1 of reconstructing Crescent Harbor (Floats 1 through 4 and the head walk) and renovations to Sitka’s airport terminal building.

The majority, which included Mayor Matthew Hunter, Kevin Knox, Bob Potrzuski, and Ben Miyasato, supported the city’s bounding strategy. Those in dissent, which included Aaron Bean, Eisenbeisz, and Richard Wein, did not. Here’s an exchange between Eisenbeisz and Hunter, demonstrating their differences.

Eisenbeisz: The Harbormaster and his staff have come forward to me and said that the harbor is failing. It is due for replacement. I understand that. I fully do. But another large debt load? Another rate covenant? I don’t know. It’s a hard sell for me.

Hunter: Steven, I get it. I agree. The only reason I think this is something we should do right now and should’t put off is because of that grant fund that’s available now, and that we may never have another opportunity to get.

Hunter is referring to a $5 million state grant for the Crescent Harbor project. The bond ordinances will come up against for second and final reading on September 25th.

The Assembly also heard a report from two locals – Scott McArthur and Andrew Friske – to propose a mitigation structure on South Kramer Avenue (Kramer Ave Mitigation Powerpoint). A housing development in that area was destroyed in a landslide in 2015. The Assembly directed City Administrator Keith Brady to continue discussion with McArthur and Friske about that concept under the condition the city was held harmless.

Last night’s meeting (08-28-18) of the Sitka Assembly saw a full house, with employees and patients from both hospitals testifying. The public voice was fairly split, some supporting merger and others calling for an advisory vote of the public, more time for Sitka Community to stabilize, and/or maintaining Sitka Community’s independence. (Emily Kwong/KCAW photo)

Sitka could see a dramatic shift in healthcare the coming year. Last night (08-28-18), the Sitka Assembly approved entering negotiations with the Southeast Alaska Regional Health Consortium to buy Sitka Community Hospital. The future of the community-run hospital was the sole item on the agenda. Over 150 citizens attending and 47 testified, chairs spilling into the lobby. 

The vote was 6 to 1, one year after the Sitka Assembly vowed to seek management partners for Sitka Community Hospital. The story of how the Assembly reached this point is long and winding, but has recent history. In 2014, a severe cash flow at the hospital resulted in a $1 million loan from the city. And while current management introduced changes to bring the hospital back into the black, the current Assembly determined it was not financially sustainable into the future. Since 2017, they’ve coordinated two town halls, sought the analysis of multiple consultants – two of whom where on the phone last night – and conducted a months-long RFP process to scout management offers from outside entities.

Of the five offers, SEARHC put forward what many considered the strongest proposal —  a buyout of the Sitka Community Hospital for between $8- and $9-million, in lump sum or over time; a buyout of the city’s pension obligation to hospital employees for about $700,000; annual lease payments to Sitka of $140,000 for use of the hospital property for five years, until a new hospital is constructed on Japonski Island; retention by the City of tobacco tax revenue; guaranteed employment for all current Sitka Community Hospital staff. In May 2017, they made an offer for $6.5 million, but the Assembly turned them down to put out a call for other management models. The issued an RFP in January of 2018 and Tuesday night, chose the SEARHC proposal. 

See final version of SEARHC proposal here

See community input from last week’s town hall here

In the end, those Assembly members who voted in favor concluded that merger was in the financial interest of the City and Borough of Sitka. Assembly member Bob Potrzuski made the motion to move forward with SEARHC, with a second from Aaron Bean.

Potrzuski: First of all, I want to thank the folks who, a year ago, demanded that we have an RFP for this process. Though we were assured there would be bids from Providence Hospital or multiple other choices from across the country, none of those materialized. In fact some of the groups that looked to respond or did respond, said the economics of the situation as it is are dire and pointed us in the direction of SEARHC. I was told by one person tonight, ‘Tell us what it’s about.’ And it is, was, and will be about economics.

Bean: It is about the economics. I’m in this community with everyone and I do see us as a single community. I don’t see the divide that seems to be in the room here tonight, which is tough for me because I’ve grown up here with a lot of you and I have the best intentions of the community here.

Also voting in favor was Mayor Matthew Hunter and Deputy Mayor Steven Eisenbeisz. While backing the economic argument, they also hoped the merger would bring expanded healthcare offerings to town.

Matthew Hunter: I too, along with Mr. Bean, thought we would find more opportunities through that RFP, but I’m thankful that we have one that is very responsive to the five main things that we came up with as an Assembly. There’s things that we can have here than can save Sitkans lives or at least save them medevacks and transports south that we can offer here if we join forces together and do that. That is something SEARHC is committed to doing and that is something I’m excited about for the future of Sitka.

Steven Eisenbeisz: If my decision negatively affects any person, whether SCH employees, SEARHC employees, or the community at large, I am truly sorry. I am looking out for what I believe to be the best long term solution for the community of Sitka. And I intend to grow old and die in Sitka, so I will be here to deal with the consequences of my decision tonight.

Assembly members Ben Miyasato and Kevin Knox noted that this decision does not mean merger is imminent. The city will first draw up a non-binding letter of intent and enter a months-long process of negotiation and due diligence. Consultants Sarah Cave and Steve Huebner have estimated it may be six months to a year before a definitive agreement with SEARHC is reached. 

Kevin Knox: There isn’t a selection of any one of the three options that SEARHC has proposed here. We will go forward and negotiate from the city’s best standpoint. SEARHC will come to the table from their best standpoint. We should come out with what should be best for all of us.

Ben Miyasato: Having heard the testimony of all the people and all the people who have e-mailed. As has been mentioned by several Assembly members, I am willing to listen to you after this vote tonight on your concerns. With that being said, I do hope SEARHC is listening to all those concerns we do have — if you are going to be the hospital that is for Sitka, that you listen to all of those concerns and address them.

At a town hall meeting last week, citizens voiced concern that merging Sitka’s two hospitals would silence the community’s voice in healthcare. Many at the town hall called for equal access to care, jobs, and local representation in management should the two hospitals combine.

The sole dissenting vote Tuesday night was surgeon Richard Wein. He previously worked at both hospitals and criticized the process leading up to this decision.

I prefer to be Cassandra, who was punished by Zeus to speak the truth but not be believed. I think this sounds wonderful and I will do everything to make it happen and make it work, but I do believe, as was said by Mr. Hazel, the devil is in the details. I think that this will be quite a ride that we will have.

The Sitka Assembly’s vote is final, though a future Assembly could take other action – such as pursuing an economic impact analysis – as the negotiations unfold. The Assembly will meeting again on Thursday night to address the other business items on their agenda.

Here is a full video of Tuesday night’s meeting. The Assembly’s debate and comments begins at 2:59:15. 

According to a report from the city public works and finance departments, the rate increase is needed for investment in a backup water supply and anticipated maintenance of existing infrastructure at the Blue Lake Dam, pictured above. (2015 photo courtesy of Lance Ewers)

Water, water everywhere in Sitka, and there are plenty of drops to drink, but the cost is going up. At Tuesday’s meeting, the Sitka Assembly voted, on second and final reading, to raise water rates by 22 percent to help pay for an additional water source. This wasn’t without push-back from several members who voted against the ordinance, concerns shared by those who voted for it.

Downloadable Audio

According to a report from the city public works and finance departments, the rate increase is sorely needed for investment in a backup water supply and anticipated maintenance of existing infrastructure at the Blue Lake Dam. The former backup, Indian River, can no longer be used as a backup supply after a change in federal regulations.

According to Chief Finance Officer Jay Sweeney, the city already applied for a loan from the state of Alaska to fund the secondary water source, and the city would not receive funds from the state unless they demonstrated that they could generate the revenue in the water fund to pay off the loan. How? By raising the rates.  

The amount of cash for all purposes in our water fund,” Sweeney said, “is somewhere around 2 to 3 million dollars, and we’re talking a bill of 10 million dollars to pay for an alternative water supply. That means the other 7 would have to come from somewhere.”

According to the memorandum from Sweeney and public works director Mark Harmon, this is the highest rate increase proposed for FY2019. And though it would be a monthly increase of $8.09 for a typical household, some felt like it was asking too much of Sitkans after the increase in summer electric rates and abolishing the senior sales tax incentive program, both decisions that have been met with sizable opposition from the public. Assembly member Aaron Bean, who voted against the ordinance, said he’s concerned for Sitkans who’ve approached him to say they can’t handle all of the increases.

“I think there’s a lot of people that I talk to on the streets that would feel shamed to come down here and say they’re having a hard time making ends meet,” Bean said. “That list seems to be growing.”

Assembly member Bob Potrzuski said while it was frustrating, the assembly needs to make hard decisions in order to provide necessary services. , one he said was necessitated by previous assemblies failing to look to the future.

“It’s a tough spot. But by the same token…if we can’t provide the basic necessities communities provide – water running out of the tap, sewage running away, lights coming on, someone taking the garbage away, I don’t know what kind of a community that is,” he said. “That’s what communities do.”

He also noted that Sitkans are seeing cost-of-living increases all over town, not just tacked onto their utility bills. 

“I look at a loaf of bread that I have to buy for my health is 9 bucks a loaf. I don’t see folks surrounding the grocery store saying ‘Hey, how dare you do that?’ Because it’s not just what the assembly is doing,” Potrzuski said. “There’s a lot of folks that have to charge whatever it is that they charge.”

Ultimately the assembly voted 4-3 in favor of the water rate increase, with Assembly members Aaron Bean, Steven Eisenbeisz and Richard Wein voting against.

The assembly also voted in favor of a 6 percent increase to wastewater- an average increase of about $3.08 per month, to help pay for underground infrastructure and repairs to the wastewater plant. It’s been nearly 40 years since much of Sitka’s wastewater infrastructure was installed.

Richard Wein said that while the fee increase by itself wasn’t massive, paired with all the other increases Sitkans have incurred this year, it might just be…

“The straw that broke the camel’s back,” Wein said. “What’s really driving this at the end of the day is not the 36 dollars that will be charged for wastewater, but it’s the 500 dollars a month that will be charged for electricity.”

Though they explored several rate increases over the course of the evening, only a couple of members of the public spoke out against the increases- Chris Spivey was one.

“Stop raising the rates. I’m having people who are actually leaving town because of it, that I have employed. Plain and simple,” Spivey said.

Jay Sweeney, this time speaking as a member of the public in response to the 6 percent increase in wastewater treatment rates, said that people leaving Sitka to seek reduced cost of living in the lower-48 should consider other unanticipated costs like higher gas costs and car mileage, and paying state income tax in most other states.

“Those are real benefits to living in Sitka and it’s just frustrating to me to hear the comments that are made but without the sober counter points made in return,” said Sweeney. “The grass may seem like it’s greener on the other side – but look close. It may not be as green as you think.”

The assembly voted 5-2 in favor with Eisenbeisz and Bean voting against. Then they tackled solid waste, voting 5-2 in favor of raising the rate by 6.5 percent, with Eisenbeisz and Bean voting against.

Overall, with increases to water, wastewater and solid waste rates, the city estimates the average added monthly cost per household at around $14.55 per month.

The Tobacco21 ordinance will raise the age to purchase all tobacco products — including e-cigs — to 21. Last year’s assembly debate centered on personal rights; this year, the assembly seemed more concerned about the impact on young smokers (19 and 20 year olds) who might already be hooked. (Flickr photo/Ivan Atanassov)

The age to buy tobacco in Sitka will be going up, if an ordinance passed by the Sitka Assembly this week survives a second reading.

There was broad support for the local initiative — called Tobacco 21 — after the assembly’s concerns were addressed over how to deal with the 19-to-20 year olds who are already hooked on smoking.

Downloadable audio.

Tobacco 21 is a statewide policy in 4 states — Oregon, California, Maine, and New Jersey — and it’s likely to pass the Massachusetts legislature in the near future.

Elsewhere around the nation, including Sitka, advocates for increasing the age to purchase tobacco to 21 are concentrating on local policy. The Sitka Health Needs and Human Services commission drafted language to increase the age in Sitka from 19 to 21 in 2016.

But it wasn’t a slam dunk. Assembly member Steven Eisenbeisz, a veteran, last year expressed concern that if 18-year olds were responsible enough to vote and serve in the military, then a 19-year old could make a personal decision about whether to smoke. Member Aaron Bean held a similar view.

Eisenbeisz took a new tack this time, in a question to Sitka Community Hospital’s Doug Osborne.

“What do you or any other groups that you’re associated with intend to do with the 20-year old who’s has either legally been smoking for a year, or illegally smoking for quite some years, who is now cut off from his addiction? I think we all understand addiction to be a disease at this point, with whatever substance they might be using, and now we’re simply cutting them off cold turkey.”

Osborne, who runs health promotions at Sitka Community, empathized with the smoker.

“It’s an interesting thing for me to think about because when I was 19 I was legally buying tobacco and I was hooked. What would I think if I looked down at a sign that said ‘On January 1 it’s over’?”

Giving young tobacco users time to prepare for the ordinance proved to be instrumental to its success. By changing the effective date to October 1, Osborne said that store managers were willing to work with him and his partner organizations to make sure tobacco-quit literature was available where people can buy tobacco now — since quitting was what the health community hoped for.

Alternatively, 19- and 20-year olds could begin to stock up.

With the effective date extended five months, further resistance to the ordinance fell away. Like Eisenbeisz and Bean, member Bob Potrzuski also had his doubts, but said he had come around.

“Last year when we talked about this I was surprised to find myself in the same place that Steven and Aaron were. But the folks at Tobacco 21 pushing the initiative did a great job in responding to my questions and my concerns, and I’m very solidly in favor this now. So I’d like to thank them publicly for taking the time to educate me and to work with me.”

Member Richard Wein — a surgeon — wove together a medical and political argument for the new policy.

“It’s the difference between a right and a privilege. Voting is a right. Smoking is a privilege, and can be legislated. That includes the age for driving, the age for drinking, etc. There’s only good that can come from this, and it’s a very simple thing. As a physician, as somebody who has seen the ravages of these diseases, I cannot think of a single reason not to do 21.”

Wein said that he’d also vote in favor of Tobacco 85 if someone were to change the ordinance.

Member Kevin Knox coaches Sitka’s youth swim club, the Baranof Barracudas, and helps organize the annual Julie Hughes Triathlon, named for a student athlete who died from leukemia. Knox said that seeing kids adopt the use of the ever-increasing amount of tobacco products like e-cigarettes, vapes, and smokeless tobacco “broke his heart.”

He thought the success elsewhere of Tobacco 21 spoke for itself.

“In states that have passed the Tobacco 21, and in local municipalities that have also passed it, they have been very, very clearly able to show marked declines in access to tobacco products. And then kids that are turning 18-21 won’t ever use — they won’t ever pick it up.”

Knox said he’d also support Wein’s suggestion of Tobacco 85, but he thought 21 was “a reasonable start.”

The ordinance passed 6-0 on first reading with Aaron Bean absent. If it passes on second reading on May 22, it will take effect in Sitka on October 1.

Update 5-23-18: The Sitka Assembly adopted the Tobacco 21 ordinance 6-1 on second-and-final reading, with Aaron Bean opposed. The effective date was amended to August 22, 2018.

Assembly passes 2019 budget, literally and figuratively

Although the assembly passed the 2019 budget on first reading, Steven Eisenbeisz objected to rate increases for some services (and voted no). Richard Wein (who voted yes) was concerned about $75,000 for researching an alternative water supply, in the event the Blue Lake Dam is shut down for repairs. “I have a lot of questions,” he said. (Photo courtesy of Lance Ewers).

Wednesday’s (5-9-18) extended assembly meeting was the second in a row that required an extra evening to complete.

This spring’s assembly schedule has been packed with business, most concerned with Sitka’s budget for the coming year.

As a result, Wednesday’s first vote on the 2019 budget was anticlimactic, as far as actual dollars were concerned.

Nevertheless, the sparring was far from over.

Steven Eisenbeisz thanked his fellow assembly members for the effort they had put into shaping a balanced budget for next year…

“However, I’m not going to be able to vote for this budget.”

Eisenbeisz said that he was unable to support the budget since it contained six-percent rate increases for some services in Sitka.

That bothered Kevin Knox, who argued that the assembly had spent considerable time and effort keeping services at a level that meet expectations for Sitka’s residents. He was disappointed that the budget vote was not going to be unanimous.

Other members agreed. Now it was just a matter of who could be more picturesque describing his frustration.

Here’s Ben Miyasato:

“It has been quite a process. It almost feels like we need a t-shirt that says ‘I survived the 2019 Budget Cycle’.”

And here’s Mayor Matt Hunter, a science teacher, with some paleontology to describe his fears over deferred maintenance in all of Sitka’s infrastructure:

“We have this — it’s not an elephant — mastodon in the distance galloping our way. If mastodons gallop, I don’t know. But it’s a terrifying thought that we’re going to have to pay for this stuff.”

Bob Potrzuski was cinematic, and rather than considering galloping mastodons, he might have been thinking about the runaway bride.

“I’m a little disappointed in your comments, Steven. Last year, when you voted no kinda at the end, I felt like I was walking down the aisle to get married, and then suddenly I was jilted. Just because of the work that we’ve done together.”

Richard Wein doubled-down on the wedding analogy, but his sympathies were with the bride.

“I have some bad news for Mr. Potrzuski: You’re going to have to return those wedding gifts, my friend. But I’m keeping the ring.”

Wein said he would vote for the budget, but he couldn’t support it until his concerns over the rate increases — and the costs over studying the need for an alternative water supply — were satisfied.

The $29.5 million dollar General Fund budget for 2019 passed 5-1 on first reading, with Steven Eisenbeisz opposed. Capital projects for next year will be passed by resolution, on a case-by-case basis.

Sitka has a permit to export more than 9 billion gallons of water per year from Blue Lake. Whether it’s flow rate or faulty infrastructure, local officials aren’t publicly saying why they’re holding off on signing a contract with Greengold Distributors of Cape Town, South Africa, and spending $100,000 to “investigate enhancing” the bulk water export delivery system. (Flickr photo/thedamian)

The City of Sitka is spending $100,000 to fix an unspecified problem with its bulk water delivery system.

The Sitka Assembly at its last meeting (4-25-18) approved the transfer from the Raw Water Sales Fund to the Electric Department “to investigate enhancing the raw water delivery infrastructure to support bulk export.”

The board of the Gary Paxton Industrial Park recommended transferring the $100,000 at its regular meeting on March 29. At the time, the term “enhancement” was not in play. Park board member — and former Sitka public works director — Hugh Bevan used another term, in this exchange with park director Garry White and board chair Scott Wagner.

Bevan — Is the bulk water pipeline operational?
White — I’ve been told to direct all questions to the city administrator or the city attorney.
Bevan — So nobody knows?
Wagner — I think nobody’s willing to say outside of executive session.
Bevan — Whether the thing is even operational or not? Wow.

The City of Sitka currently has one active bulk water contract, with Eckert Fine Beverages. The Gary Paxton Industrial Park Board earlier this spring recommended a second contract, with Greengold Distributors of Cape Town, South Africa. The approval of that contract was put on hold after the unspecified problem in the bulk water delivery system emerged.

All discussions of the matter since the March 29 Gary Paxton board meeting have taken place behind closed doors. At the April 25 assembly meeting, member Richard Wein said he was unhappy with the secrecy.

“This is an interesting problem. And hopefully with the expenditure of these funds we may get at least an answer one way or another to solve this. As a secondary note, I don’t like the veil.”

The city’s Raw Water Sales fund has over $1 million available, most earned on selling bulk water rights which to date have never been utilized.

Assembly postpones landslide study for Keet, Sitka High

The assembly last week (4-25-18) deferred a decision to spend $75,000 to assess the landslide risk for Keet Gooshi Heen Elementary School and Sitka High School.

Several assembly members were reluctant to spend additional money on just the schools, when geotechnical studies had been completed — or were needed — for the entire downslope area of Gavan Hill.

The consulting engineers Shannon & Wilson, however, notified Sitka last year that some of their preliminary modeling indicated that Keet Gooshi Heen was at risk.

Municipal attorney Brian Hanson said that this was precisely the reason that the city needed to study the schools specifically.

“We have indicators that the area above Keet Gooshi Heen could be moderate risk. But we need to know more about that. Now that we know that information and we don’t do anything about it, I think that increases our risk and our potential liability if something does happen.”

Assembly member Aaron Bean said that the risk at Keet Gooshi Heen was inherent, like the risk from tsunamis. He was concerned that a separate engineering study would begin a discussion about relocating the school, and he “didn’t want to go down that rabbit hole.”

Member Bob Potrzuski countered that Sitka’s children were irreplaceable, and that he didn’t object to going down that “rabbit hole” if necessary.

Members decided to postpone action on the $75,000 award until they could learn more about it from public works director Michael Harmon and municipal engineer Dan Tadic, neither of whom were present during the discussion.

Sitka PD to get rifle armor

And finally, the Sitka Assembly last week approved spending $28,000 on rifle armor and helmets for the Sitka Police Department, along with rifle scopes. Police chief Jeff Ankerfeldt said the equipment was needed to protect officers during active shooter scenarios. He told the assembly “It’s the world we live in.”

The Assembly Chambers were full on Tuesday night (04-24-18), with Sitkans coming out to testify on two tax proposals. The one to turn the senior sales tax exemption into a rebate program for low-income seniors passed. (Emily Kwong/KCAW photo)

In an effort to fund the City of Sitka, the local Assembly is looking at taxes. And on Tuesday night (04-24-18), they made a big decision. By a 4-3 vote, the Assembly approved eliminating the senior sales tax exemption and replacing it with an rebate program for qualifying low-income seniors. Through the highs and lows of passionate debate, with over 40 citizens testifying on this single ordinance, Sitkans of all ages are feeling the pinch.

The meeting went on a break at 11:30 p.m. Tuesday night and continued Wednesday night at 6 p.m., with nearly a dozen agenda items left. That includes money for bulk water infrastructure, a landslide study, land disposal laws, and a discussion on the Sitka sac roe herring fishery. We’ll have more on Raven News at 5:18 p.m. tonight. 

Downloadable audio.

(Crowd noise)

By the sound of it, you can probably tell this meeting of the Sitka Assembly was packed. The vast majority were there to weigh in on a single issue, making the senior sales tax exemption needs-based instead of broad based.

What does that mean? For some, like Sam Skaggs, Susan Brandt-Ferguson, and Levi Albertson, it means more money for Sitka’s future. 

Skaggs: I just turned 65. I support any exemption here because we have to raise revenue for our schools. That’s the fabric of our community.

Susan Brandt-Ferguson: Soon, Sitka’s population will be 20% or more seniors. I don’t believe our city can afford to offer this exemption to all seniors any longer.

Albertson: Most of the people I know that have been pushed out of Sitka due to economic circumstances have been young families who are offered no economic relief from the city.

As of 2017 census data, 16% of Sitkans were over 65 years of age. Ordinance sponsors Kevin Knox and Bob Potrzuski argued that such a large and growing portion of the population could not forgo paying the sales tax any longer. Their memo noted the City and Borough of Sitka has gone without $6.5 million in sales tax revenue from senior citizens over the last five years.

Sitka’s population is aging, a “silver tsunami” projected in many other communities in Southeast. In 1996, six percent of Sitkans were senior citizens. In 2015, that number had risen to sixteen percent. (Chart provided by Knox and Potrzuski)

But many testifying didn’t see the logic and implored the Assembly to look for revenue elsewhere. Several said passage of the ordinance would create hardship for seniors on a fixed income, who use their exemption card to get by in a town where the cost of living is on the rise. Many felt the rebate program, as designed by the ordinance sponsors, would leave non-qualifying seniors in a lurch. Others were skeptical the Assembly would raise the money it expects  (an estimated $500,000 in the first year) and anticipated removing the exemption would drive seniors to shop online or out of town.

Many of those testifying against the ordinances were senior citizens themselves. Grace Larsen stood before all seven family members, six of whom are under 65, a yellow sign that said “Seniors Do Count.” (Emily Kwong/KCAW photo)

The Mayor capped testimony at two minutes, so many had the modify their plans to speak for the typical three minutes. 

Those who assist the elderly spoke to the poverty they’ve seen. Debe Brincefield talked about delivering 50 Thanksgiving meals to shut-in seniors.  “These people cannot feed themselves. These people cannot pay their bills. They do not have enough money to survive. They are borrowing from each other, lending to each other, helping each other, and we need to step up and help them,” Brincefield said.

Some, like David Sam, expressed their anger outright. “What we are talking about here is respect: respect for the elders in the community and giving thanks for what they have brought us. And you want to take, you want to assault, the elders in this community?,” Sam asked to Assembly.

The senior sales tax exemption was introduced in 1975 and has come up twice, in 2012 and 2015, for an overhaul when the Assembly was searching for ways to raise revenue. The rebate idea has been debated before, but never got the Assembly’s approval until now. 

Shirley Robards has been its longtime defender and this time, gathered 800 signatures calling for it to be kept. Another petition calling for its removal, put forward by John Stein last meeting, had approximately 380 signatures. Robards told the Assembly Tuesday night, “I think this going to send everybody out of town to shop.”

After nearly two hours of public testimony on this issue, the Assembly took a break and came back for debate.

There was conversation at the table about voting the ordinance down to workshop it further, but no motion was made or seconded. When the time came, the vote was close, 4-3, and the ordinance passed as written.

Voting in favor was Mayor Matthew Hunter, ordinance co-sponsors Bob Potrzuski and Kevin Knox, and Assembly member Steven Eisenbeisz. Voting against were Assembly members Richard Wein, Aaron Bean, and Ben Miyasato. Each offered different explanations for their vote, except for Eisenbeisz, who didn’t offer comments during Assembly debate. When he gave his approval, there were audible gasps from the crowd.

The ordinance will take effect in July. The rebate program would begin next year. Seniors can apply for it by submitting applications to the finance department between January 1, 2019 and March 31, 2019. They’d get their rebate check in July, which amounts to $350 for a single senior in a household and $450 for two senior in a household. See ordinance details here: Ord 2018-14

Though Assembly members and the public differed on what to do, there was one area of overlap: that Sitkans are struggling — young and old, newcomers and those with long legacies.

Brinnen Carter asked the Assembly, rhetorically, “Is the revenue collection fairly balanced among the citizens?” Mayor Matthew Hunter thought not. He felt the senior sales tax exemption proposal, though unpopular, was a way to spread Sitka’s needs more evenly across it’s population.

Hunter compared the Sitka of today to that of 1980.

“The take home pay has doubled in that time. The housing cost has quadrupled, conservatively. So it’s twice as hard to get started now, as it was then. We have our future and our present and our past all come together in one conversation tonight.

The room was a blend of those age groups and perspectives, the mood swinging between feisty indignation and somber seriousness and neighbor visiting with neighbor during the top-of-the-hour breaks.

While the Assembly did vote through one tax measure, they voted down the other – a proposed 3% severance tax on natural resources like fish and rock – on first reading. Not a single citizen, many of them fisherman and seafood processors, came out in support. The Assembly voted it down on first reading 6-1, with Assembly member Aaron Bean voting in favor.

In a previous version of this article, KCAW reported incorrectly that Assembly member Aaron Bean against the severance tax. He voted in favor.

Finding money for Sitka’s schools meant cutting money from elsewhere, namely in utility subsidies and the visitor’s enhancement fund. Electric rates will not increase this year, though water, wastewater, and harbor rates will. Chief Financial and Administrative Officer Jay Sweeney looks at Sitka’s capital planning documents with Assembly member Ben Miyasato at their March 22nd budget meeting. (Emily Kwong/KCAW photo)

The Sitka Assembly has found a way to balance the budget, finding an additional $300,000 dollars for Sitka schools through a series of cuts and transfers. The surplus, approved by unanimous vote, could save some teaching positions. But it also means the landscape of other city services has been trimmed. 

The Assembly did not make any changes to the budget for the Enterprise Funds. While electric rates will stay the same, Sitkans will see all other rates will go up: 5.5% for wastewater, 6.5% for solid waste, 6.3% for harbors, and 22% for water. The steep water hike is because of the city’s desire to develop a secondary water source. 

Downloadable audio.

Take a moment to remember the game Jenga.

(Sound of Jenga 1980s commercial: “Jenga! You take a block from the bottom and you put it on top.”)

You know the one. Blocks are removed slowly from a tower, one by one, and re-stacked on top. Then everyone stands back to assess the stability of this new reality.

(Sound of Jenga 1980s commercial: “Till someone knocks it over and that’s when you stop. But you start all over...”)

It’s a painstaking test of balance and risk. Now, imagine you are playing on a team of seven in front of the whole town and you get a sense of what the Sitka Assembly signs up for every year when they try to balance the budget. This year, the Assembly pinched dollars from other places to find more money for the school district. Assembly member Steven Eisenbeisz wanted to convey just how precarious and challenging that was to the public. 

“That was an extremely painful process that we just went through, full of a lot of cuts and a lot of disagreement in order to find the school $300,000,” said Assembly member Steven Eisenbesiz at the end of Thursday nights’ four hour meeting.

Here’s how they did it: $200,000 was unanimously cut from the $400,000 utility subsidization fund. That means qualifying households will receive less assistance on their utility bills when the utility subsidization program gets rolling next year.

Another $200,000 was transferred into the general fund from the visitor enhancement fund. This troubled some Assembly members, given that Sitka’s visitor services contract with the Chamber of Commerce has expired and a new one is out to bid. Whoever takes up the contract may want more money next season. But the majority wanted to take the risk, voting the transfer through 5-2 with Richard Wein and Steven Eisenbeisz voting against.

Now before approving this additional $300,000 to Sitka’s schools, everyone wanted to know: would teachers jobs be saved?

Superintendent Mary Wegner then came forward. “My feet are fully blistered and bandaged up from all the walking,” she said, recounting a recent trip to Juneau to meet with lawmakers in the capital.

During the fly-in, Wegner learned the legislature is looking to increase the Base Student Allocation. One unnamed senator estimated a BSA increase of $30 per pupil. Wegner told the Sitka Assembly that could spell good news for four non-tenured teaching positions she proposed the school board eliminate, should they not manage to close their deficit. 

Superintendent Mary Wegner: One [position] at each school, except for Pacific High School. Those would change the level of service we can provide our students and families.

Assembly member Steven Eisenbeisz: And so those four are dependent on Base Student Allocation and a potential increase in revenues generated by this Assembly?

Superintendent Mary Wegner: Correct.

The $30 BSA would only amount to an $80,000 increase. The School Board could still cut teacher positions at their final budget meeting on April 17th. Wegner also added that two other teaching positions will be cut no matter what, due to declining school enrollment and scheduling changes.

How did the City of Sitka go from having a $1.3 million deficit a month ago to furnishing more money than last year for Sitka’s schools? It comes down to pulling Jenga blocks and making cuts.

With City Administrator Keith Brady’s guidance, the Assembly approved several cuts at their budget meeting last week (04-05-17). That includes reductions of $18,700 from travel and training for staff, $150,000 from upgrades to the Crescent Park bathrooms, and $316,724 in savings through financing the purchase of a new CAD/RMS and phone system for the police department over a five year period. Department heads previously offered $869,915 in cuts during budget negotiations at City Hall in March. 

The Assembly did tiptoe to the edge Thursday night of restoring one thing to the budget: $100,000 to hire an assistant fire chief. Al Stevens, who retired from that position, has been working part time at the Fire Hall to help out.

“Do we need an assistant fire chief?,” Stevens asked the Assembly. “It would be great if we did. You’re working poor Chief Miller to death, but he’s going to do it anyways.”

After careful debate, the Assembly voted that down 2-5 with Knox and Miyasato voting in favor. The majority said they simply couldn’t afford an assistant fire chief position though it pained them to make that choice.

Some services on the chopping block, however, were spared. The wages of temporary workers will not be reduced. Mayor Matthew Hunter made the point that temps save the city money in the long run.  

“You’re getting a lot more bang for your buck out of these folks for temporary projects. If you need to do something on a short term basis, hire someone for a couple of months and get it done,” Hunter said.

The Assembly also included $25,000 in the budget for the RIDE public transit system. 

A motion made by Aaron Bean to cut Assembly stipends (they each earn $350/month) failed 2-5, with Richard Wein voting alongside Bean.

Following the meeting, City Controller Melissa Haley told KCAW the FY19 General Fund budget has a surplus of $131,381.

The Sitka Assembly restored $400,000 to the FY19 general fund budget Thursday night, while appropriating $325,000 for the Sitka School District and the RIDE public transit system. That amounts to a surplus of $131,381. (Chart courtesy of City Controller Melissa Haley)

The Sitka School Board will finalize their budget at their April 17th meeting. They will then submit their budget to the Assembly for review. The Assembly’s budget ordinance – a document approving the FY19 budget – will come up for first reading at their regular meeting on May 8th. 

Downloadable audio.

Taxes dominated the conversation the Sitka Assembly meeting, as the body looks for ways to raise revenue to fund city government.  (Photo courtesy of Pixaby)

The City of Sitka doesn’t have enough money to maintain government as is. They must either cut services or raise money.  The Sitka School District, in particular, is facing a $2 million deficit and may have to eliminate teaching positions.

This didn’t sit well with several senior citizens. A group collected 380 signatures calling for the city to replace the senior sales tax exemption with a rebate program. Assembly members Kevin Knox and Bob Potrzuski co-sponsored a like-minded ordinance, which appeared before the Assembly Tuesday night on first reading.

Among the senior citizens in favor were Cindy Littman, Steve Lawrie, and Eric Jordan.

Cindy Littman: At one time, seniors were typically poorer than younger people, but that’s no longer the case.

Steve Lawrie: Those who need it can take. But I don’t need it.

Eric Jordan: Some of you know it’s been a pretty tough year for fishermen, so I’ve been claiming it. But I’m not going to claim it in the future. I’m going to rip it up.

Jordan then shred his senior sales tax exemption card to prove his point.

If passed, eliminating the tax exemption would be a $500,000 boon for the city. The ordinance (Ord 2018-14) also allows for qualifying low-income Sitkans over 65 to apply for an annual rebate check of $350. The notion of replacing the tax break with a rebate program has come up to the Assembly before – in 2012 and 2015. 

As written, the ordinance says senior citizens may qualify for the rebate if they already earn assistance for a select list of social welfare programs, including state Medicaid or the Supplemental Nutrition Assistance Program (SNAP).

Several citizens felt the proposal was unfair to the elderly who paid their taxes as younger people and deserve a break. That included Shirley Robards, John Duncan, and Rachel Moreno. 

Shirley Robards: We know many deserving seniors will no longer be eligible under the new rules and who knows how many more will refuse to be humiliated and threatened by the city by even applying.

John Duncan: I really believe that you folks should leave the old people alone.

Rachel Moreno: Elders don’t need to be put in a position where they go from a nice benefit to applying for a welfare program.

Co-sponsor Kevin Knox noted that the ordinance had to describe this as a social welfare program. Otherwise, the city would have to issue every qualifying person a 1099 form.

After 45 minutes of public testimony, the Assembly took up deliberations. Demographic trends were a big part of the conversation. Sitka’s population is aging, with 16% of the population over 65.

Those in favor of eliminating the tax exemption said it was in the best interest for Sitka’s young families. Mayor Matthew Hunter noted that the price of housing has quadrupled. There’s less children enrolled in the school district. Families are leaving town.

Assembly member Bob Potrzuski reasoned that financially-able seniors should contribute to the sales tax base to help out young Sitkans. “We’re shifting the burden from people who can afford to pay, who have spent a lifetime making money and who have saved money, and we’re shifting it to that younger group who are just starting out,” Potrzuski said.

Those against eliminating the tax exemption worried about the fate of the elderly, some of whom do not qualify for the proposed rebate.

Assembly member Richard Wein took aim about how the program would work, saying it eliminates protections for those senior citizens on the borderline. “The difference between young and old is that a 22 year old has a lifetime to earn money. But somebody who is 78 years old, that’s it. Whatever is in their bank account, that’s it,” Wein said.

Assembly member Aaron Bean said the money the city needs could be found in further cuts. He wants the city to consider eliminating temporary workers.

The vote – on first reading – was an even split. For the tax was Matthew Hunter, Bob Potrzuski, and Kevin Knox, while Richard Wein, Aaron Bean, and Ben Miyasato voting against. In his comments, Miyasato said he voted against eliminating the senior sales tax exemption in 2012 and would maintain his stance. Assembly member Steven Eisenbeisz was absent.

Since it takes a vote of four to kill an ordinance on first reading, this tax proposal will come up again for second reading on April 24th.

Also at an impasse was a tax proposal to raise lodging taxes – which combines bed and sales taxes – from 12% to 16%. Sponsored by Hunter and Knox, this proposal (Ord 2018-13) would net $1.2 million dollars in revenue for the general fund, where it could be diverted to say, the Sitka Performing Arts Center or the Harbor Fund.

Several members of the visitor industry cautioned the Assembly from taking such action, saying it could hurt tourism.

Sherry Aitken, the Director of Tourism with Visit Sitka, spoke to the ripples. At one point, she addressed Hunter directly. He is a teacher at Mt. Edgecumbe High School. “When people come to graduation at Mt. Edgecumbe Matt, all the parents have to stay some place and now they’re paying 16%. So, they’re not an other. They’re us. When they come over for Mudball (a softball tournament) from Juneau, are they going to still come if they have to pay 16% bed tax? Maybe. Maybe not,” Aitken said.

Aaron Bean spoke fervently against this tax proposal, saying it would drive visitors away. He said, “I would ask that you not make Sitka the most expensive place to visit.” A lodging tax of 16% would be the highest in Southeast.

Knox felt that people will leave Sitka – residents and visitors alike – if infrastructure  deteriorates. He spoke specifically about the harbors. “Everyone in this community, everybody, whether you have a boat or not, benefits from our harbors system. We all need to pitch into it somehow. Not just the users. This is one of those ways we can put a little bit towards it.

Bob Potrzuski then made a motion, amending the ordinance to raise the lodging tax to 14%. The motion was voted down. When it came time for a final vote on the ordinance as written, it was tied 3 for 3, with the same Assembly members voting the same way as the senior sales tax proposal. This too will come up again for second and final reading at their April 24th meeting.

In other business, the Assembly:

–Approved, on first reading, $75,000 of General Fund working capital money for a landslide study around Keet Gooshi Heen Elementary and Sitka High School: Motion and memo Ord 2018-09

–Heard a detailed presentation on the final draft of the Sitka Comprehensive Plan (Final Sitka Comprehensive Plan 2030)

–Heard public testimony from both citizens and city administrator Keith Brady about the removal of an art show on the 2nd floor of city hall.