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. 

The mission statement for Sitka Community Hospital posted in the waiting room. The hospital is hiring a new CEO and and implementing a new electronic billing system, but its overall future hangs in the balance. The Asssembly will vote next week on whether to give the management of the hospital to another party. (Emily Kwong/KCAW photo)

The future of Sitka Community Hospital could very well be decided in August, after a months-long process seeking bids for outside management. While the Assembly has a good sense of the offers on the table, less is known about what the economic impact of closing or selling Sitka Community Hospital could be. The Assembly debated that question Friday night (08-17-18), but ultimately did not take action to answer it now.

Tonight at 6 p.m., the City will host a town hall to gather community input on the three organizations who have made an offer to manage Sitka Community Hospital: SEARHC, Quorum Health Resources, and Sitka Jet Center. Attendees will be broken into small groups and then the floor opened for a public forum. Raven News has a live stream of that meeting here. 

Downloadable audio.

The idea for an economic impact analysis came from the people, specifically the board members of the Southeast Economic Development Association.

SEDA would hire a third-party to produce the analysis, which would take an estimated 90 days to complete. Executive director Garry White said the goal would be to answer a tough, yet important question. “What’s at stake here? What’s at stake if the proposal doesn’t really come to fruition?,” White said.

Meaning, what would happen if Sitka Community Hospital’s new management didn’t deliver on their promises? What would it do to jobs? The economy?

Mayor Matthew Hunter did the math. He estimated the hospital supported 200 jobs, including service contracts. He spoke to the $35 million state pension obligation and the immeasurable legacy of the hospital, offering Sitkans a choice in healthcare. He concluded by saying he didn’t need a third-party study to tell him what’s at stake.

“It’s going to tell us Sitka Community Hospital is a critical part of our economy. And it’s going to cost maybe $50,000 to do a study that’s going to tell us that it’s a critical part of our economy,” Hunter said.

The bigger question, he felt, is how to keep the doors of Sitka Community Hospital open and retain as many of those jobs as possible. “Either we go forward with the SEARHC proposal or we make Sitka Community so sustainable, so supported, that it can operate well and comfortably and we don’t have to ever worry about it going belly up,” Hunter said.

This sparked another conversation about revenue sources for the hospital. Assembly member Aaron Bean floated the idea of a ballot question, raising property taxes by 2 mills for hospital operations. No one on the Assembly made a motion on that idea, some speculating it would not pass with voters.

Instead, many citizens in attendance wanted the Assembly to delay awarding an RFP until an economic impact analysis could be done.

Assembly member Richard Wein said the information was a key piece of the conversation. “How will this effect Sitka needs to be known, so in negotiations we can potentially mitigate. ‘This is the money you’re going to offer us, but what is the trade off?’,” Wein said, calling in over the phone.

Hunter considered that idea. If the current Assembly awards an RFP to this month, he noted the next Assembly could potentially pursue a study in the middle of negotiations with SEARHC or Quorum – a six to nine months window.

“Say [an economic impact analysis] comes 90 days in. That’s halfway through our due diligence and negotiation process,” Hunter said. “The next Assembly, or negotiators on the city side, could use that information to try to mitigate any negative impacts. And I think that’s a good idea.”

The issue seemed resolved, the Assembly noting that the question of economic impact could be answered during negotiations. No one made a motion to pursue an economic impact analysis now.

This upset some hospital stakeholders in the room, like Dr. Marilyn Corruzi, who said the whole process felt manipulative. “The fact that you’re refusing to do this and then this town hall meeting is so contrived, is very frustrating. Very frustrating,” Corruzi said.

Citizens like Corruzi also implored the Assembly to give the hospital time to hire a new CEO as Rob Allen steps down in mid-October. But the Assembly seemed firm in their Phase 3 timeline, intending to award an RFP this month. Should the Assembly do so, the City and selected proposer will enter negotiations.

Hospital board president Connie Sipe told the Sitka Assembly last week they’ve interviewed five candidates. They have their finalists. But the whole process is on pause until the Assembly takes their first vote on the RFPs before them on August 28th. Raven Radio will broadcast that meeting live at 6 p.m.   

A slide describing Phase 3 of the process, from a presentation by consultants Sarah Cave and Steven Huebner. The Assembly has reviewed the final proposals and could select an affiliate next week.

In 1978, the Sitka was granted thousands of acres of land by the state to create a source of revenue. The rules for disposing that land could change. The Assembly, on first reading, passed an ordinance saying that only land valued over $5 million would require a public vote in order to be sold and that vote would be advisory (Emily Kwong/KCAW photo)

A debate about modifying Sitka’s land disposal laws continues. Right now, land sales over $500,00 require a public vote. The Sitka Assembly wants to raise that ceiling to $5 million to motivate economic development and bring the city into compliance with the state constitution.

Assembly member Aaron Bean was absent from this meeting. The Assembly also approved several rate increases on first reading, including a 22% bump in water rates to pay for a secondary water source. Electric rates are not raising this year. They also made a decision on how to divide the money within the Fisheries Enhancement Fund, but that could change at a future meeting. We’ll have more on Raven News at 5:18 p.m.

Downloadable audio.

The issue of constitutionality didn’t come up much at Tuesday night’s meeting of the Sitka Assembly. But that’s how the ball got rolling on this topic in the first place. 

“I don’t see a rush on this. It’s just meeting that legal necessity. That’s my only motivation here,” said Mayor Matthew Hunter.

Here’s the problem: Sitka General Code states that land sales over $500,000 and land leases over $750,000 must pass a public vote. But city administration and attorney Mike Gatti, the city’s outside legal counsel, say that is not compatible with the state constitution.

In 1978, the Sitka was granted thousands of acres of land by the state to create a source of revenue. Gatti argued in a memo (Motion and Memos Ord 2018-18) that land disposal is an appropriation and there’s a constitutional limitation to that which applies to local government. “[SGC 18.12.010B impermissably interferes with the Assembly’s legislative authority and discretion to control the allocation of its public assets, in this case land, among the competing needs of the community,” he wrote.

A new version of  an ordinance to change that law came before the Assembly Tuesday night, calling for an advisory vote of the public instead. It also suggested raising the bar by a few zeros: to $5 million dollars for land sales and $7.5 million dollars for land leases. At that amount, the Assembly would hold off on their decision until the public cast that advisory vote.

Assembly member Richard Wein wanted to know exactly how the co-sponsors of the ordinance (Ord 2018-29), Hunter and Ben Miyasato, came up with that figure. Hunter said that figure it was recommended by a local realtor.

“I believe Travis Vaughn [of RE/MAX Baranof Realty] mentioned it as being a reasonable number in his mind and it certainly seemed like a better number than $500,000 to us,” Hunter said.

But Wein wanted more information, saying he had requested city staff prepare in an inventory of the value of Sitka’s real property. That would include areas of high interest, like Sitka Community Hospital. At a May 8th Assembly meeting, some members of the public expressed concern this proposal was designed to make selling the hospital easier. 

“I was told that the [land] inventory would not be available until July,” Wein said at Tuesday night’s meeting. “Therefore I certainly cannot make a reasoned decision as to what is exactly going to be for sale and whether this $5 million ceiling is an intelligent and thoughtful move,” Wein said.

The point was well taken by the other Assembly members. Steven Eisenbeisz made a motion to postpone a decision until the first meeting in August to give Assembly members time to look at the land inventory. That was voted down, 2-4 with Wein and Eisenbeisz voting for. 

Wein then suggested changing the ordinance to keep the threshold at the current levels ($500,000 for land sales and $750,000 for land leases), but making the public’s vote advisory. That was voted down too 1-5, with only Wein voting for.

Miyasato said the Assembly needs to make it easier for the city to sell land. “This here will be good for business. It will also be good for housing, affordable housing,” Miyasato said.

Current code hampers that development. That’s the perspective of many in the business community and the truth for a recent deal that fell through. Assembly member Kevin Knox spoke of how a plan to turn the former Forest Service building into housing ran into problems.

“[RE/MAX Baranof Realty] had a pretty good plan for going forward with re-developing that. But because the lot across the street was a tidelands lease, the developers didn’t want to go forward knowing that it would have to a public vote under current code. They pulled out. It’s a pretty significant chill there, on what could have been a fairly interesting development,” Knox said.

And with that, all members of the Assembly present, except for Wein who voted no, approved Ordinance 18-29 on first reading. It will come up again for a second and final reading on June 26th.

See our previous coverage about the land sales debate here:

Amid public push back, Assembly postpones changes to land sale laws

Sitka assembly moves to repeal voter approval of large land sales

The U.S. Coast Guard says the new Fast Response Cutter vessels are capable of deploying independently to conduct missions, including coastal security, fishery patrols, search and rescue and national defense. (Photo from USCG/Defense Industry Daily)

On Wednesday (04-25-18), the U.S. Coast Guard announced that Sitka will be receiving one of six new Fast Response Cutters. The new boat will be capable of search and rescue and bring 25-30 Coast Guard families to town.

All of this is big news for Sitka’s economy, but the Coast Guard will have to address its housing shortage before they arrive. “It’s going to result in safer waters for Sitkans, more kids in our schools, and more infrastructure development. It’s fantastic news. I can’t wait for this boat to get here,” said Mayor Matthew Hunter.

Downloadable audio.

A few years ago, the Coast Guard began looking for ways to recapitalize it’s fleet. There was talk of downsizing and consolidating boats in just a few communities. Senator Dan Sullivan, who chairs the subcommittee that oversees the Coast Guard, didn’t like that. He, along with local mayors, pushed for a more robust presence across coastal Alaska.

Last week, Sullivan got what he wanted. In a letter, Coast Guard Commandment Admiral Paul F. Zukunkft announced that after completing a feasibility study and reaching out to local communities, USCG decided to spread six of the new Fast Response Cutters across four communities – Kodiak, Seward, Ketchikan, and Sitka. Two smaller patrol boats would be homeported in Petersburg and in Juneau.

“We think this is a big win for the state, for Southeast, and for all the communities that to be quite honest were concerned about losing Coast Guard cutters and assets,” Sullivan said to KCAW last week.

And it’s a big win for Sitka. While the rest of Southeast is getting their fast patrol boats replaced, Sitka is getting one for the very first time. The new generation of ships are 154-feet long (as opposed to 110-feet), with room for 15 crew members, and will expand the Coast Guard’s presence in Sitka significantly.

If you’re wondering, “Why did Sitka get chosen?,” just ask Mayor Matthew Hunter.

“Why does Sitka have an air station? Why do we have a buoy tender? And why did the navy choose Sitka during WWII as a location to put one of the three air stations? It’s on the outside of Southeast Alaska,” Hunter said. “It’s central in Southeast Alaska. It’s a perfect location for a Coast Guard presence because they can have access to open ocean or inside waters within a few hours of Sitka.”

Hunter began meeting with Coast Guard admirals on this issue years ago. In vetting which communities would get boats, the Coast Guard’s biggest concern about Sitka’s candidacy involved housing. Where would these new families leave? Current Coast Guard housing is often over-capacity and families often rent units in town.

Hunter said the Coast Guard will need to build additional housing, but that may require municipal help finding the land.

“I expressed my personal support. I felt the Assembly would probably support finding some municipal land somewhere to possibly make available to build additional housing if necessary,” Hunter said. There’s also state land on Japonski Island the Coast Guard could lease.

The Coast Guard has been appropriated $51.5 million in the FY18 government budget to fund housing and shore-side infrastructure projects to accommodate the new vessels and their crew.  A statement from Senator Lisa Murkowski’s office said that money “will support current and future Coast Guard assets in Alaska, such as these FRCs.” Murkowski is a member of the Homeland Securities Appropriations Committee and also advocated for Fast Response Cutter funding to be spread across Alaska.

Sitka was redesignated as a Coast Guard city in 2017. A fixture on the waterfront and in the skies, the Coast Guard operates Air Station Sitka and a buoy tender. The Cutter Maple sailed south for maintenance last year. Its replacement, the Cutter Kukui, will arrive this year with the same crew aboard.

As a public safety hub, Sitka is also home to the Alaska State Trooper Academy. Hunter hopes citizens embrace enhanced Coastie presence as well.

“I hope people don’t perceive it as a negative presence. I know down south where it’s almost all law enforcement, where they’re looking for drugs and stopping vessels all the time, that people don’t have the the love for the Coast Guard that Sitka does,” Hunter said.

The Fast Response Cutters are slated to arrive in 2023.

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. 

Mayor Matthew Hunter, Chief Financial and Administrative Officer Jay Sweeney, and City Administrator Keith Brady came on Raven Radio to talk about the FY19 budget. (Katherine Rose/KCAW photo)

Springtime in Sitka has telltale signs: the return of 7 a.m. sunrises, schools of herring, and city staff to the budget table. The fiscal year begins July 1st and the city is facing tough choices, like how to close a general fund deficit of $855,000 and how to manage millions of dollars in capital needs down the road.

Downloadable audio.

Though the budget process this year is the same as always, the challenges are as unique as ever.

At their first budget meeting Thursday night (03-15-18), the city finance department projected a line graph showing state and federal support to Sitka over time. Cast over the heads of the Assembly, it looked like a mountain range — rising and then steeply plummeting from 2015 on. That’s when the price of oil began dropping and the state slid into recession.

Mayor Matthew Hunter told the crowd that this is the biggest obstacle to budgeting in Sitka: How can the city maintain the same levels of service with millions of dollars less in revenue?  

“We’re down $5 million from 2015 in state and federal help. We’ve increased local sales tax and property taxes by about $1 million, or so, in that time. We’re barely making ends meet. When I was first on the Assembly [in 2012] this looked a lot nicer than it does now. You can look at local stuff and make commentary about how our local government is run, but we’re running a much cleaner machine now and doing it with much less outside support than we have in the past,” Hunter said.

In the past three years, the city has cut 8 full time positions. This year, there aren’t any layoffs planned within city hall. Instead, City Administrator Keith Brady has proposed two additional full time employees, one for the library and another for an assistant fire chief.

This bothered Assembly member Steven Eisenbeisz, given the potential for layoffs of within the Sitka School District to close their spending gap. “That causes a lot of heartburn, to know that we’re adding people while they’re subtracting…that doesn’t add up to me. That’s really hard in this budget,” Eisenbeisz said.

Municipal Administrator Keith Brady with KCAW Reporter Emily Kwong during Monday night’s call-in show about the general fund and other budget challenges facing the city. (Katherine Rose/KCAW photo)

City Administrator Keith Brady countered the two positions would alleviate heavy workloads on the shoulders of current staff, especially Library Director Andrew Murphy and Fire Chief Dave Miller.

Miller told the Assembly Thursday night,”Is it a needed position? I wouldn’t come to you unless I thought it was.” He added, “I try not to come up here and ask for money. Never have really, I don’t think. But I think this is one of those things that, if we don’t have it, we’re going to start feeling the pinch in the things we do as the fire department.”

Sitka is at a tipping point. Most of the cuts so far, except for the closure of the library on Sundays, have been invisible to members of the public. But if the city wants to balance the books this year without using savings, they will have to reduce services. The cuts will be visible. The question facing the Assembly is how to balance quality of life in Sitka with the cost of living. Hunter made this plain during a special call-in show hosted by Raven Radio Monday night.

“If we found ourselves unable to pave the streets and unable to mow the grass, we can survive. But it’s just a question of what you want to give up. We could go to an all-volunteer fire department. Well, now it’s another 5-10 minutes before the ambulance shows up. I can think of a few people who would be dead if we had that personally, through my ambulance work. If you don’t pay for the services, you don’t get the services,” Hunter said.

It’s a simple math equation, but a tough choice to make and a different Sitka to live in. Alongside Hunter for the call-in was Chief Financial and Administrative Officer Jay Sweeney and Brady, the new city administrator.

Listen to Raven Radio’s call-in show about General Fund budget here

Part 1 (Monday, March 19th, 6:35 p.m. to 7:17 p.m.)

Downloadable audio.

Part 2 (Monday, March 19th, 7:26 p.m. to 8:01 p.m.)

Downloadable audio.

After working with department heads to trim their budgets internally – a process known as “decrementing” – the spending gap they’re trying to close is $855,000. A third of that is to purchase new air packs for the fire department, approved unanimously by the Assembly the March 15th meeting. The Assembly also voted to eliminate a lobbyist position within the electric department, a $40,000 savings.

Here is the list of cuts so far: FY19 Initial Decrement List -1

Brady stressed on-air that though the deficit seems small, Sitka is facing long-term challenges in the order of millions. Roads need repaving and harbors need repairs, but there isn’t enough money to replace all this aging infrastructure at once. “I believe this year we have about $4.5 million in maintenance we would like to do. We only have $2.3 million to do it. So the rest of it just rolls over to the next year and the next year,” he said.

Sitka faces a snowball of deferred maintenance. Several listeners called in  and wrote in with ideas for new revenue, from a motor fuel tax to a simultaneous raise in property tax and sales tax, but it would ultimately take the action of an Assembly member to bring any of these things forward. Hunter shared he’s working on some revenue ideas currently.

For now, the Assembly will focus on the money they do have. There are three more budget meetings planned into April, every Thursday at 6 p.m. at Harrigan Centennial Hall.

• Budget Meeting #2: Enterprise funds and user rates – March 22nd
• Budget Meeting #3 : Special revenue and trust funds – March 29th
• Budget Meeting #4: Sitka Community Hospital – April 5th 
• A final budget ordinance is slated to appear before the Assembly for first reading on Tuesday, May 8th.

All meetings are open to the public. 

The Assembly must also decide how much of a contribution to make to the Sitka School District, which is the general fund’s biggest expense. On Wednesday March 21st at 6:30 p.m., Raven Radio will host a budget hearing with leaders of the Sitka School District. Superintendent Mary Wegner and members of the school board will be in the studio with KCAW’s Robert Woolsey to take listener calls. E-mail your question to news@kcaw.org or call 747-5877.