Increasing the mill rate to 10.19 next year, compared to the current rate of 10.04 mills, is being proposed in the municipal budget scheduled to be presented to the Juneau Assembly for initial consideration Saturday.

The increase for the 2026 fiscal year that starts July 1 would place the rate just above the 10.16 mills set during fiscal 2024, which was lowered during the current year to provide relief to residents after a big jump in assessed property values the previous two years. The proposed rate means property owners would pay $10.19 for every $1,000 in taxable value of their properties — equating to $75 more on a $500,000 home.

But city leaders for months have generally agreed an increase is needed due to escalating costs, with flood-related measures cited as an example after two years of record disasters caused immense residential and infrastructure damage. Another is the city taking over three buildings from the Juneau School District after its consolidation to help resolve a budget crisis last year.

“We had a balanced budget and — kablam — we have now three facilities that we have to operate,” CBJ Finance Director Angie Flick said in an interview on Saturday. “And so what we did last year, because it was so much unknown, is we funded those through one-time expenditures because we had no idea what were we going to do with Floyd Dryden, what are we going to do with Marie Drake, what are we going to do with the old JSD admin building?”

A year later, with some of those plans in place, “that’s why the (budget’s) expenditures look very close from ‘25 to ‘26, but the mill rate has to go up a little bit,” she said.

Flood funding, on the other hand, doesn’t as of now appear to be a significantly higher expense during the coming year due to one-time funds used during the current year to help pay for installation of HESCO barriers that is now occurring, Flick said. Also approved already is funding toward a study of long-range solutions by the U.S. Army Corps of Engineers.

“We know that there’s more, that there’s going to be additional maintenance coming down the road,” she said.

Much of the rest of the proposed budget is a largely status quo spending plan, but Flick said there are two notable unknowns. One is the outcome of contract negotiations with CBJ employees, the other the amount of federal dollars available due to the massive shakeup in spending by the Trump administration.

“This is the year when we do collective bargaining agreement with fire, police and (marine engineers), and so we fully expect there’s going to be increases,” she said. “It’s just negotiations aren’t far enough for us. We know there’s an impact, we just don’t know what that is yet.”

While federal funds represent 2.56% of the projected $455 million in total revenue for the coming year, those funds are often a portion of projects representing a larger share of the overall budget, Flick said. Some are grants where CBJ and possibly other entities provide matching funds, for instance, while other funds are first provided to the state which then redirects them to the city.

“Certainly when we think about the hospital, and the Medicare and Medicaid kind of funding sources, it would be a large impact to them,” she said. “And then the airport is the other one that has a lot of federal funding just built in.”

Among the notable examples of how federal cutbacks could affect city spending is a proposal by CBJ Tourism Director Alexandra Pierce to spend $200,000 in Marine Passenger Fees from cruise ship tourists to support operations at the Mendenhall Glacier Recreation Area. A memo by Pierce states 31 of the 32 federal employees working at Juneau’s most popular tourism attraction were fired Feb. 14 and, while those positions have been at least temporarily reinstated under court order, roughly half of the employees have agreed to return so far.

“Due to the tumultuous and uncertain nature of this situation, staff requests a $200,000 appropriation of State Commercial Passenger Vessel fees to the Manager’s Office to be used as or if needed to support local organizations currently staffing the MGRA in the event of additional cuts or other unforeseen circumstances,” Pierce wrote in a March 24 memo to the Assembly. “Ideally, these funds could be used to fill existing positions by allowing partner organizations to hire terminated employees.”

Initial consideration of the budget is scheduled at 8:30 a.m. Saturday in the Assembly Chambers when proposed ordinances for specific portions of the spending plans and mill rate increase will be introduced at a special Assembly meeting, which will be immediately followed by an Assembly Finance Committee meeting where an overview of the sub-sections of the budget will be presented.

A public comment period for non-agenda items is part of the agenda for the Assembly meeting, but no public comment period during the Finance Committee meeting is scheduled.

The proposed budget for next year lists about $455 million in total revenue for all major functions of the City and Borough of Juneau — including the municipal government, Juneau School District and Bartlett Regional Hospital. A total of about $480 million in expenditures are proposed, creating a $25 million gap that will be covered at least in part with reserve funds available to each of those three entities.

“If there are appropriate one-time expenditures it is appropriate to spend your fund balance,” Flick said. Hypothetically, for example, “if Docks and Harbors needed to buy a big piece of equipment, and once you buy it you don’t buy it again for years, they could use their fund balance to pay for that and so it would look like their expenditures are more than their revenues from a budget perspective.”

The school district, for instance, is proposing to spend about $6 million from its fund balance, while also assuming state lawmakers will approve a $400 increase in per-pupil funding. However, legislative leaders are debating proposals with increases that range between $680 and $1,000, which would significantly reduce the district’s need to tap reserve funds.

Bartlett Regional Hospital, whose leaders warned a year ago was in danger of depleting its bank account within three years if operations continued as is, managed to balance its books toward the end of the year with a series of service and staff cutbacks.

About $195 million of the $480 million is the proposed operating budget for CBJ’s municipal government that will be the primary focus of the Assembly until its scheduled vote on a final budget plan June 9. That amount is essentially the same as the current municipal budget.

CBJ is expected to have a $38.6 million fund balance as of July 1 to cover shortfalls and contingencies, of which $22 million is considered unrestricted in its designated use.

The proposed budget plan lists 11 “budget-cycle decisions” the Assembly will need to resolve, ranging from small matters such as approving an extra half-time park ranger position to major issues such as whether to put bond measures for utility and school upgrade projects on the fall ballot. Other decisions include what level of funding to provide to the struggling Eaglecrest Ski Area as it eyes an expansion into year-round operations as a way of becoming profitable, funding for the cold-weather emergency shelter and a sobering center, and a $71,000 boost to Recycleworks for a junked vehicle contract.

• Contact Mark Sabbatini at mark.sabbatini@juneauempire.com or (907) 957-2306.