Loading...
HomeMy WebLinkAbout11252024 City Council Laydown - Substitute Resolution 2024_059SUBSTITUTE RESOLUTION 2024-059 LAYDOWN FROM CITY MANAGER'S OFFICE Resolution 2024-059: Adopting the City of Seward 2025 and 2026 Operating Budget and Setting the Mill Rate Attached to this laydown is a substitute Resolution 2024-059 to adopt the City of Seward 2025 and 2026 Operating Budget and set the mill rate. The 10 pages attached are the only pages in the FY25/26 budget that see changes. This substitute resolution changes only forecasted tax revenue. This does not change anything on the expense side. What we did, at Council's suggestion, was increase our forecasted sales tax revenue for FY25 and FY26. We maintained a conservative forecast of $7.65 million for both FY25 and 26. There is no increase in expenses in this substitute resolution. With this increased forecasted revenue, we can balance the budget WITHOUT an increase in the Hotel/Motel Room tax. Instead, we proposed forecasted revenue of $866,880 and $891,880 for 2025 and 2026 respectively. In the time since we initially released our draft budget, we received realistic numbers for the FY25 fish tax and adjusted accordingly. We will see a 42% decrease in that revenue in 2025 from $400,000 annually to $180,000 annually and incorporated those numbers into the substitute resolution. With the increased forecasted revenue from sales tax, we also increased the transfer to the Hospital Debt Service Fund. We are now proposing a $954,839 transfer to the Hospital Debt Service Fund, or half of a single sales tax percentage. With this substitute resolution, Administration recommends not reintroducing Ordinance 2024-014: Revising the Seward City Code Section 5.45.015(A) Hotel/Motel Room Tax — Levy of Tax, to Increase the Hotel/Motel Tax Rate from Four Percent to Eight Percent, Effective January 1, 2025. I am confident that we will meet these increased, yet still conservative markers for our revenue. Thank you, Kat City Council Agenda Statement SUBSTITUTE Meeting Date: November 25, 2024 To: City Council Through: Kat Sorensen, City Manager Subject: Resolution 2024-059: Adopting the City of Seward 2025 and 2026 Operating Budget and Setting the Mill Rate Background and justification: This substitute resolution adopts the 2025 and 2026 Operating Budget and sets the 2025 and 2026 mill rates as required by the Seward City Charter and Seward City Code. After discussion with Council at the November 12 meeting, it was requested to present a budget that increases the forecasted sales tax revenue for 2025 and 2026 rather than an increase in the Hotel/Motel Room Tax. Historically, the City has been conservative with revenue projections. Over the past several years, this was imperative due to a global pandemic, volatility in investment and oil markets, geopolitical issues, and economic concerns like high interest rates and steep inflation. As a community that often depends on a strong visitor industry for revenue, it is important to stay attuned to these situations, but it's also important to accurately forecast revenue so that the City does not unnecessarily increase taxes or hamper operations. The forecast presented in this updated budget assumes no major disruptions to economic activity. The revenue lines have been revised and analyzed according to the Alaska Department of Revenue and Tax Division's last revenue forecast. • 4206 Alaska Raw Fish Tax - For fisheries, FY 2024 revenues were impacted by closures and very low prices in multiple fisheries in calendar year (CY) 2023. The state is optimistic and assumes a 3-year time horizon for slow recovery. We have a reduction in revenue, representing 42% in actuals for FY23 vs FY24. • 4020 Hotel/ Motel Room Tax — The state and the City assume steady and continued economic growth supporting profitable business operations and economic activity. The forecast for the state of tourism, including cruise ships, assumes robust tourism activity with cruise ship passengers, which counts around 1.6 million passengers per year. • 4000 Sales Tax Revenue - Our forecasting remains grounded in the belief that inflation will moderate, oil prices will decrease, oil production will increase, and taxable sales will rise compared to the figures from 2022 and 2023. Funds affected by this 3rd budget review are the General Fund and Hospital Fund. Upon adoption of the 2025 and 2026 Operating Budget, revenues and expenses will be appropriated to the proper accounts as indicated in the adopted budget. 2025 General Fund Operating Revenues Operating Revenues $ 15,263,753 Net Transfers $ 1,438,180 General Fund Total: $ 16,701,933 2025 Enterprise Funds Total Revenue Harbor SMIC Parking Electric Water Wastewater Healthcare Seward Mountain Haven 3,218,682 964,758 429,173 16,197,891 2,083,094 1,369,094 974,839 $ 200,000 2025 Internal Service Fund Motor Pool $ 518,028 Enterprise Fund Total: $ 25,955,559 Total Revenues: $ 42,657,492 2025 Operating Expenditures General Fund General Fund $ 16,701,933 2025 Operating Expenditures Before Depreciation & Motor Pool Enterprise Funds Harbor SMIC Parking Electric Water $ 3,379,375 $ 1,133,298 $ 123,308 $ 14,344,458 $ 1,344,205 2026 General Fund Operating Revenues Operating Revenues $ Net Transfers $ General Fund Total: $ 15,329,230 1,474,315 16,803,545 2026 Enterprise Funds Total Revenue Harbor SMIC Parking Electric Water Wastewater Healthcare Seward Mountain Haven $ 3,263,271 $ 935,041 $ 435,960 $ 16,457,057 $ 2,115,297 $ 1,390,263 $ 974,839 $ 200,000 2026 Internal Service Fund Motor Pool $ 518,589 Enterprise Fund Total: $ 26,290,317 Total Revenues: $ 43,093,862 2026 Operating Expenditures General Fund General Fund $ 16,803,545 2026 Operating Expenditures Before Depreciation & Motor Pool Enterprise Funds Harbor SMIC Parking Electric Water $ 3,430,256 $ 1,106,658 $ 154,683 $ 14,577,277 $ 1,369,234 Wastewater Healthcare Seward Mountain Haven Internal Service Fund Motor Pool Enterprise Funds Total: General Fund & Enterprise Funds $ 1,482,925 958,548 466,992 1,814,317 25,047,426 41,749,359 Wastewater $ Healthcare $ Seward Mountain Haven Internal Service Fund Motor Pool $ Enterprise Funds Total: $ 1,514,269 952,977 411,952 202,794 23,720,100 General Fund & Enterprise Funds $ 40,523,645 Comprehensive and Strategic Plan Consistency Information This legislation is consistent with (citation listed): Comprehensive Plan: Strategic Plan: Other: Total amount of funds listed in this legislation: This legislation (✓): Creates revenue in the amount of: Creates expenditure in amount of: Creates a savings in the amount of: Has no fiscal impact Funds are (✓): Budgeted Line item(s): Not budgeted Not applicable $ 0 Affected Fund (✓): General Boat Harbor Motor Pool Available Fund Balance SMIC Parking Other Electric Water Wastewater Healthcare Note: amounts are unaudited Finance Director Signature: X Yes Attorney Signature: Not applicable Comments: Administration Recommendation X Adopt Resolution Other: Sponsored by: Sorensen Public Hearing #1: November 12, 2024 Public Hearing #2: December 28, 2024 CITY OF SEWARD, ALASKA RESOLUTION 2024-XXX SUBSTITUTE A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA, ADOPTING THE CITY OF SEWARD 2025 AND 2026 OPERATING BUDGET AND SETTING THE MILL RATE WHEREAS, Seward City Charter Chapter 6 and Seward City Code Chapter 5.05 specifies that the City Council shall adopt a budget and make an appropriation of the money needed at a regular meeting held not less than 10 days prior to the end of the fiscal year; and WHEREAS, work sessions were held on the recommended budget and the required public hearings were held on November 12 and November 28, 2024. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF SEWARD, ALASKA that: Section 1. The document incorporated herein by reference, titled "City of Seward 2025 and 2026 Operating Budget" is hereby adopted as the budget. Section 2. Sums of money shall be appropriated from all City funds as follows: 2025 General Fund Operating Revenues Operating Revenues $ Net Transfers $ 15,263,753 1,438,180 General Fund Total: $ 16,701,933 2025 Enterprise Funds Total Revenue Harbor SMIC Parking Electric Water Wastewater Healthcare Seward Mountain Haven 3,218,682 964,758 429,173 16,197,891 2,083,094 1,369,094 974,839 $ 200,000 2026 General Fund Operating Revenues Operating Revenues $ Net Transfers $ General Fund Total: $ 15,329,230 1,474,315 16,803,545 2026 Enterprise Funds Total Revenue Harbor SMIC Parking Electric Water Wastewater Healthcare Seward Mountain Haven $ 3,263,271 $ 935,041 $ 435,960 $ 16,457,057 $ 2,115,297 $ 1,390,263 $ 974,839 $ 200,000 CITY OF SEWARD, ALASKA Substitute RESOLUTION 2024-059 2025 Internal Service Fund Motor Pool $ 2026 Internal Service Fund 518,028 Motor Pool $ 518,589 Enterprise Fund Total: $ 25,955,559 Total Revenues: $ 42,657,492 2025 Operating Expenditures General Fund General Fund $ 16,701,933 2025 Operating Expenditures Before Depreciation & Motor Pool Enterprise Funds Harbor $ SMIC $ Parking $ Electric $ Water $ Wastewater $ Healthcare $ Seward Mountain Haven Internal Service Fund Motor Pool $ 1,814,317 Enterprise Funds Total: $ 25,047,426 3,379,375 1,133,298 123,308 14,344,458 1,344,205 1,482,925 958,548 $ 466,992 General Fund & Enterprise Funds $ Enterprise Fund Total: $ 26,290,317 Total Revenues: $ 43,093,862 2026 Operating Expenditures General Fund General Fund $ 16,803,545 2026 Operating Expenditures Before Depreciation & Motor Pool Enterprise Funds Harbor $ SMIC $ Parking $ Electric $ Water $ Wastewater $ Healthcare $ Seward Mountain Haven Internal Service Fund Motor Pool $ Enterprise Funds Total: $ 23,720,100 3,430,256 1,106,658 154,683 14,577,277 1,369,234 1,514,269 952,977 $ 411,952 202,794 General Fund & 41,749,359 Enterprise Funds $ 40,523,645 Section 3. The total assessed valuation as determined by the Kenai Peninsula Borough Assessor and any supplemental assessment rolls for the period which may be certified by the Borough Assessor at a future date shall be the basis for computing estimated property tax revenues for the City of Seward. Section 4. The levy rate on 2025 and 2026 real and personal property tax rolls is levied at the rate of 3.84 mills per dollar of assessed valuation in Municipal Service Zones One (Borough designation TCA 40) and Two (Borough designation TCA 41). CITY OF SEWARD, ALASKA Substitute RESOLUTION 2024-059 PASSED AND APPROVED by the City Council of the City of Seward, Alaska, this 16th day of December 2024. THE CITY OF SEWARD, ALASKA Sue McClure, Mayor AYES: NOES: ABSENT: AB STAIN: ATTEST: Kris Peck City Clerk (City Seal) City of Seward 2025/2026 Budget Transmittal Letter To: Honorable Mayor McClure and City Council Members From: Kat Sorensen, City Manager Re: 2025/2026 City of Seward Budget The 2025/2026 City of Seward Operating Budget and Six -Year Capital Improvement Plan is respectfully submitted to you for your consideration. The budgets include the operating budgets for the general fund, the eight enterprise funds: Harbor, Harbor Seward Marine Industrial Center (SMIC), Parking, Electric, Water, Wastewater, Healthcare, Seward Mountain Haven and one internal service fund, Motor Pool. Tax Rates The City of Seward first implemented a sales tax in March 1982, when a 1 % sales tax was imposed to fund the cost of local hospital operations and other local services. In October 1986, the sales tax rate was increased from 1 % to 3% to offset substantial state reductions in State Revenue Sharing and to allow the City to continue providing the necessary public services. The sales tax rate was increased from 3% to 4% in 2003 and has not changed since. There is no change to the amount of sales tax imposed in the FY25/26 budget. Because the hospital fund has collected enough funds to cover debt services, the FY25/26 budget shows a reallocation of half of a percentage of sales tax monies from the local hospital operations to general local services with a focus on public safety. The bed tax was first adopted in 1996 and revenue numbers have been steadily increasing, reflecting strong visitor numbers in the past few years. The bed tax remains at 4%, which is the amount that was adopted in 1996, but with continued revenue growth forecasted. The property tax mill rate for Seward is 3.84 mills which, when applied to a taxable property valued at $100,000, yields $384 in tax revenue. Seward's mill rate remains among the lowest in the Borough. From 1989 through 1996, Seward's mill rate was 3.0 mills. From 1996 to 2012 the mill rate was 3.12 mills, and in 2018 it was increased to 3.84, where it is today. In addition to local property tax, Seward residents pay property tax to the Kenai Peninsula Borough (KPB) for Borough schools, landfill and borough operations, and to Seward Bear Creek Flood Service Area (SBCFSA) to mitigate flood hazards. General Fund Operating Budget Overview 2025 2026 Operating Revenue: $ 15,121,414 Operating Revenue: $ 15,186,891 Net Transfers: $ 1,580,519 Net Transfers: $ 1,616,654 Total: $ 16,701,933 Total: $ 16,803,545 General Fund Operating Budget The 2025 General Fund operating revenue represents a 9% increase over 2024. The tax revenue line items have been increased as follows: • Sales Tax: The proposed sales tax revenue amount is $7,654,525 and represents an 18% increase over the 2024 budget. This large increase is based off actuals from 2023 and anticipated higher revenue from sales tax in 2024. The budgeted sales tax revenue for 2023 was $6,500,000 and we anticipate coming in over that budgeted amount by the end of FY24. In FY22 and FY23 we saw sales tax revenue of over $7.5 million so we are maintaining a conservative yet realistic increase. • Hotel/Motel Tax: The hotel/motel revenue amount is $866,880 and represents a 20% increase over the 2024 budget. Again, we are maintaining a conservative yet realistic increase in the revenue from Hotel/Motel Tax to insure that the City of Seward accurately forecasts revenue. Revenue line items have been decreased in FY25 as follows: • Jail Contract_$564,810 has been deducted from the revenue with the closing of the Seward Community Jail as well as $112,000 in administrative fees from the jail. • Alaska Raw Fish Tax: Decrease from $400,000 to $180,000 to reflect the struggles that the fishing industry is facing as trends are pointing to a continued sharp decrease. • Electric Admin Fees: The administrative fee from the Electric Enterprise Fund is decreased to $1,013,512 in an effort to consolidate resources under the electric department budget and decrease electric rates over time. By previous policy, the admin fee would be over $1.1 million, reflecting a reduction of revenue of about $100,000. The 2026 General Fund operating revenue represents a $50,000 increase over 2025. The tax revenue line items are increased as follows: • The Camping Fees and Utilities were increased based off average annual increases in bookings and cancellation fees. Expenditures: $16,701,933 (Personnel - $10,275,634 & Non -personnel - $6,197,622) Personnel Expenses The 2025 personnel expenses reflect an 8% increase in the personnel expenses over 2024. The major factors for the increase are: • Salary Expenses — in 2025 the following changes will be made: o 8% increase in wages and the implementation of a new wage scale o New firefighter position • PERS —PERS liability continues to be 22%, which includes the current liability and past liability. The percentage is applied to the salaries line items within each department. • Health Insurance Costs —health insurance costs have increased by a conservative 10%for 2025. This cost is negotiated annually, and we continue to keep it below the 10% mark. The 2026 personnel expenses reflect a 2% increase in the personnel expenses over 2025. The 8% increase in wages and an implementation of a new wage scale is in response to increasing cost of living across the country, but especially in the Seward community. Seward's salaries were not competitive across the Kenai Peninsula or the state, especially in our public safety departments. By adjusting salaries with an average of 8%, the City is able to provide competitive wages. It does not make the City a top paying employer in the state or the community, but it helps bridge the gap. Since 2000, City of Seward employees saw a collective 34.90% increase in salaries in comparison to an 88.24% increase in CPI across the same 24-year period. Over those 24 years, there were 13 years without a Cost -of -Living Adjustment (COLA). This adjusted wage scale in 2025 and 2026 will bring Seward's wages into a competitive range and catch current wages up with the cost of living. This, in turn, will improve staff retention, increase productivity, attract high quality talent, strengthen the local economy, and enhance the City's public image and trust. General Fund Non -Personnel Line Items The 2025 non -personnel line items have decreased by about 2% over 2024. The 2026 non - personnel lines maintained from 2025 with a decrease of $40,000. These decreases are present due to diligent budgeting of resources. The 2025 general fund budget includes increases the following • A CPI increase of 3% in the FY25 budget across most line items to account for inflation • Additional funds in the City Manager's budget to hire a contract grant writer and administrator • Additional funds in the Community Development department to facilitate and create the Comprehensive Plan • Incorporating ongoing costs of an upgraded Computer Aided Dispatch program for public safety • An increase in funding to the Seward Senior Center of $25,000 over 2023 The 2025 general fund budget includes decreases the following • Removing the $25,000 annual contribution to the Boys and Girls Club under General Services and incorporating those funds into the contract with Boys and Girls Club under Parks and Rec. The total contract will now total $170,000 rather than a combined $215,000. The 2026 general fund budget includes increases the following • A 1.6% CPI increase on most line items to account for inflation • Contractual renewals in the Informational Technology department for a multiyear contract renewal of endpoint protection and managed detection and response software The 2026 general fund budget includes decreases in the following • The Alaska SeaLife Center PILT payments end in 2025, decreasing the general fund budget by $150,000. Budget Interfund Transfers The following transfers affect the General Fund Budget: Transfers -in: • 2025 $515,618 and 2026 $520,953 from the Boat Harbor Enterprise Fund; • 2025 $180,696 and 2026 $183,572 from the Seward Marine Industrial Center Enterprise Fund; • 2025 $33,934 and 2026 $34,477 from the Parking Enterprise Fund; • 2025 $1,311,146 and 2026 $1,311,724 from the Electric Enterprise Fund; • 2025 $189,167 and 2026 $191,794 from the Water Enterprise Fund; • 2025 $132,392 and 2025 $134,110 from the Wastewater Enterprise Fund; • 2025 $90,000 2026 $90,000 from the Commercial Vessel Tax Fund. Transfers to Other Funds: • 2025 $891,510 and 2026 $891,510 to the Hospital Debt Service Fund; • 2025 $26,000 and 2026 $26,000 to the Sewer Enterprise Fund. Historically, the City of Seward General Fund would transfer sales tax revenue equivalent to one percent of the four of Seward's sale tax to the Hospital Dept Service Fund to cover the bond payments and capital for Seward Mountain Haven and Providence. Since the account has enough funding to cover the remaining bond payments, we have allocated just half of the usual amount for capital, at $891,510. Enterprise Funds Overview Harbor Enterprise Fund The Harbor Enterprise Fund consists of the following cost centers: Float System, Wharves and Docks, 50-Ton Boatlift, Harbor Electrical System, Harbor General, Harbor Administration, Harbor Debt Service, and accounts for harbor and marine services provided to the public in the harbor basin. Revenues are based on user fees and charges, and the Harbor Enterprise Fund is maintained on the accrual basis of accounting. • The 2025 Harbor Enterprise Fund operating revenues represent a 4.8% increase over 2024. • The 2026 Harbor Enterprise Fund operating revenues represent a 1.3% increase over 2025. • The 2025 Harbor Enterprise Fund operating expenses before depreciation represent a 10.5% increase over 2024. • The 2026 Harbor Enterprise Fund operating expenses before depreciation represent a 1.2% increase over 2025. Seward Marine Industrial Center (SMIC) Enterprise Fund The SMIC Enterprise Fund consists of the following cost centers: SMIC Basin, 330-ton Travel Lift, Syncrolift Operations, and SMIC General. This Fund represents the activities of the marine industrial operations conducted on the east side of Resurrection Bay. The City of Seward owns, but does not operate, the Syncrolift. The Syncrolift facility is operated through a lease and a management and operating agreement. The costs associated with the Syncrolift in this budget are associated with insurance, depreciation, amortization, and administrative costs allocated from the Harbor Enterprise Fund and the General Fund, associated with managing the SMIC operations. • The 2025 SMIC Enterprise Fund operating revenues represent a 16% increase over 2024. • The 2025 SMIC Enterprise Fund operating expenses before depreciation represent a 1 increase over 2024. Parking Enterprise Fund The Parking Enterprise Fund is established to create a funding source for replacement of existing parking lots, including costs of maintaining and upgrading the parking lots in the harbor and downtown areas. The primary revenue source of this fund is parking fees. The primary expense of this fund are maintenance and repair of the parking lots and personnel costs associated with enforcement. Financial records for the Parking Enterprise Fund are maintained on the accrual basis of accounting. • The 2025 Parking Fund operating revenues represent a 24.3% increase over 2024, representing an increase in enforcement. • The 2025 Parking Fund operating expenses represent a 38% increase in expenditures due to full staffing and purchasing of equipment. • The 2026 Parking Fund operating expenses represent a 6% decrease under 2025. Electric Enterprise Fund The Electric Enterprise Fund is established to account for the provision of electrical service to the residents of the City and other areas within the electrical service area. The primary revenues of the Electric Enterprise Fund are charges to various user classes: • Residential • Small General Service • Large General Service • Habor Power Sales • Industrial Sales • Street and Yard Lights Fund are maintained on the accrual basis of accounting. The FY25/26 Budget proposes a 2 cent decrease in winter rates effective October 2025 in an effort to decrease the cost of living and operating a business in the City of Seward in the winter months. This rate cut was made possible due to the decrease in administrative costs from the Electric Enterprise Fund to the General Fund with the consolidation of positions, as well as cuts to the Electric operating budget. Capital projects are not accounted for in this budget. • The 2025 Electric Enterprise Fund operating revenues represent a 2.5% decrease under 2024 budgeted numbers. • The 2026 Electric Enterprise Fund operating revenues represent a 1.6% increase over 2025 budgeted numbers. • The 2025 Electric Enterprise Fund operating expenses before depreciation represent a 4.5% decrease under 2024 budgeted numbers due, in part, to the reduction in transfers to the General Fund. • The 2026 Electric Enterprise Fund operating expenses before depreciation represent a 1.6% increase over the 2025 budgeted numbers representing a CPI increase. Water Enterprise Fund The Water Enterprise Fund accounts for the provision of public drinking water to the community of Seward. Revenues are based on user chargers to the following classes of customers: • Residential • Small General Service • Large General Service • Seward Marine Industrial Center • Boat Harbor • Industrial The financial records of the Water Enterprise Fund are maintained on the accrual basis of accounting. • The 2025 Water Enterprise Fund operating revenues represent a 3% increase over 2024 budgeted numbers. • The 2026 Water Enterprise Fund operating revenues represent a 1.6% increase over 2025 budgeted numbers. • The 2025 Water Enterprise Fund operating expenses before depreciation represent a 1 % increase over 2024 budgeted numbers. • The 2026 Water Enterprise Fund operating expenses before depreciation represent a 2.7% increase over 2025 budgeted numbers. Wastewater Enterprise Fund The Wastewater Enterprise Fund accounts for the provision of sewage treatment and disposal services to the community of Seward. Revenues are based on user charges to the following classes of customers: • Residential • Small General Service • Large General Service • Seward Marine Industrial Center • Industrial The financial records of the Wastewater Enterprise Fund are maintained on the accrual basis of accounting • The 2025 Wastewater Enterprise Fund operating revenues represent a 3% increase over 2024 budgeted numbers. • The 2026 Wastewater Enterprise Fund operating revenues represent a 1.6% increase over 2025 budgeted numbers. • The 2025 Wastewater Enterprise Fund operating expenses before depreciation represent a 26 % increase over 2024 budgeted numbers. Ten percent of this increase is due to an increase in salaries from the new pay scale. • The 2026 Wastewater Enterprise Fund operating expenses before depreciation represent a 2.8 % increase over 2025 budgeted numbers. Healthcare and Seward Mountain Haven Enterprise Funds The Healthcare Enterprise Fund accounts for operating and capital costs associated with Providence Seward Medical Center (PSMC). PSMC's operations presently include the hospital and emergency room. Beginning in 2014, the primary care clinic transitioned to a federally qualified health center and operations of the clinic are accounted for in a separate special revenue fund which is not part of the City's budget process. The Seward Mountain Haven Enterprise Fund was established to account for the accumulation of resources to repay $27,000,000 in revenue bonds issued on March 18, 2008, to construct, equip, and furnish a new long-term care facility. These bonds were refinanced in 2016, with an outstanding principal balance on January 1, 2024, of $12,350,000 The revenue source to cover capital costs and operational shortfalls, if any, comes from proceeds of a .50% of a 1 % sales tax, equal to one-fourth of the General Fund's 4% sales tax revenue. Bond covenants require the sales tax be made available first to cover debt service on long-term care facility bonds. Assumptions for the bond payment: • As an optional prepayment explained in the amendatory loan agreement; The Municipal Bond principal installments are due on or after August 1, 2026, are subject to prepayment in whole or in part at the option of the City on any date on or after February 1, 2026, at a price of 100% of the principal amount thereof to be prepaid, plus accrued interest to the date fixed for prepayment. • We can assume that if the city wants to pay the bond after February 2026, the amount would be $10,205,000 without the transaction fees. Internal Service Fund Motor Pool Fund The Motor Pool Fund is an Internal Service Fund established to accumulate resources to replace City vehicles and heavy equipment, including fire trucks, road graders, snow removal equipment, fleet vehicles, trailers, rescue and response vehicles, dump trucks, etc. City departments pay annual lease payments to the Motor Pool Fund for the use of vehicles and heavy equipment, with funds accumulating to finance their replacement. This funding mechanism reduces the need to borrow money to purchase equipment, saving interest costs, and reduces the impact of large purchases on the annual operating budgets by spreading the costs of the assets over their respective useful lives. Motor Pool Revenue: • $484,000 in transfers in 2025 • $489,000 in transfers in 2026 Motor Pool Expenditures: • There are $1,811,430 in planned expenditures for 2025 and $160,000 planned for 2026. Acknowledgements: Developing Seward's budget is a comprehensive, collaborative effort that hinges on the dedication of our strong, cohesive City team, the valuable input of Seward's residents, and the guidance of our City Council. Our department heads and staff work tirelessly to maintain service levels despite increasing costs and fewer resources, constantly finding innovative ways to achieve more with less. Throughout this process, our team has shown tremendous dedication in identifying funding and recovery opportunities to benefit the City of Seward, local businesses, and our broader community. The changes in this budget reflect the future of Seward, emphasizing the value of our employees and residents and centering on positively impacting the quality of life for everyone in Seward, all year long. The results of this budget are a testament to the shared commitment of everyone involved—Seward's Council, City staff, and the engaged members of our community. With their thoughtful contributions and shared vision, this budget not only enhances essential services and infrastructure but also strengthens our financial foundation, setting Seward on a path toward long- term sustainability. Thank you to everyone who brought such energy and insight to this work, allowing us to continue delivering the highest levels of service in the most efficient, cost-effective way. General Fund Budgeted Statement of Revenues, Expenditures and Other Financing Sources (uses) and changes in Fund Balance For Fisical Year 2025 and 2026 Proposed Proposed 2021 2022 2023 2024YTD 2024 Budget 2025 2026 Actual Actual Actual Actuals 6/30 Final Budget Budget Revenue: Taxes 9,326,014 10,160,722 10,595,983 4,269,607 9,082,500 10,482,405 10,507,405 Licenses and Permits 118,513 207,286 216,357 98,808 179,060 122,700 125,700 Intergovernmental 1,720,773 1,303,488 1,222,372 67,349 992,554 284,800 259,800 Charges for Services 3,660,752 3,871,599 3,817,738 3,475,770 4,155,336 3,963,228 4,025,705 Fines and Bails 22,308 28,759 19,514 25,126 16,500 25,000 25,000 Investment income (loss) 31,176 195,207 579,365 1,359,899 501,000 260,000 260,000 Other revenues 409,188 153,812 212,343 292,467 111,313 125,620 125,620 Total Revenue: $15,288,724 $15,920,874 $16,663,672 $9,589,026 $15,038,263 $15,263,753 $15,329,230 Expenditures: General Government 3,684,055 5,084,416 5,371,398 2,733,588 5,114,189 5,295,896 5,159,279 Public Safety 4,201,427 4,968,898 5,006,695 2,887,755 5,704,605 5,702,553 5,668,584 Public Works 1,194,712 1,705,102 1,960,636 1,058,640 2,051,354 2,314,631 2,471,498 Parks and Recreation 1,510,042 1,707,417 1,732,671 1,033,972 1,854,823 2,144,019 2,226,615 Library 616,043 766,272 758,260 387,082 867,054 834,603 869,712 Debt Service 441,404 411,481 415,606 213,553 410,544 410,232 407,857 Total Expenditures: $11,647,682 $14,643,586 $15,245,267 $8,314,591 $16,002,568 $16,701,833 $16,803,545 Excess of revenues over (under) expenses Other financing sources (uses): Net Bond proceeds Operating transfers (to) other funds Operating transfers from other funds Net other financing sources (uses) Change in Fund Balance Fund balance beginning of year $3,641,041 $1,277,288 $1,418,405 $1,274,435-$964,306-$1,438,180 -$1,474,315 34,072 0 -2,949,985 (2,797,265) (1,883,801) 2,286,776 2,649,411 2,824,069 -629,137 -147,854 940,268 -422,183 1,323,065 900,882 -1,641,000 2,453,557 812,557 0 0 0 -980,839 -980,839 2,419,019 2,455,154 1,438,180 1,474,315 $3,011,904 $1,129,434 $2,358,673 $2,175,317 -$151,749 $0 $0 $10,224,310 $11,583,494 $12,200,345 $14,426,887 $14,426,887 $14,275,138 $14,275,138 Fund balance end of year Non -spendable: Inventory, Prepaids, Unrealized gains 545,560 814,310 858,515 858,515 875,000 875,000 875,000 Restricted: 0 0 0 Committed: Working Capital 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 1,500,000 Insurance Reserves 0 0 0 Hospital Cash Flow 500,000 500,000 500,000 500,000 500,000 500,000 500,000 Assigned: 575,000 597,995 597,995 597,995 615,935 625,174 634,551 Unassigned: 10,115,654 9,300,623 11,103,107 13,145,693 10,784,201 10,774,964 10,765,586 Total Fund Balance $13,236,214 $12,712,828 $14,558,618 $16,602,204 $14,275,138 $14,275,138 $14,275,137 City of Seward General Fund Revenue Detail by Line Item 2024 YTD 2021 2022 2023 Actuals 2023 Budget 2024 Budget Proposed 2025 Proposed 2026 General Fund Revenue by line Item Actual Actual Actual 6/30/2024 Final Final Budget Budget Revenues 4000 Tax Revenue - Sales 6,861,101 7,635,648 7,856,472 3,400,032 6,500,000 6,500,000 7,654,525 7,654,525 4010 Tax Revenue - Real Property 1,170,662 1,214,960 1,310,697 325,266 1,250,000 1,275,000 1,312,500 1,312,500 4011 Tax Revenue - Personal Property 463,638 469,568 407,869 152,656 465,000 465,000 465,000 465,000 4012 Tax Revenue - Motor vehicle 20,916 21,111 19,757 9,473 24,000 24,000 20,000 20,000 4013 Tax Revenue - Oil Property - - 553 - - - - - 4020 Hotel/Motel Room Tax 713,633 804,511 840,428 317,883 725,000 725,000 866,880 891,880 4030 Payments in Lieu of Tax 130,375 147,705 156,404 61,435 90,000 90,000 160,000 160,000 4031 Contra Payments in Lieu of Tax (41,314) (136,677) - - - - - 4040 Penalties and Interest on Taxes 7,003 3,898 3,804 2,862 3,500 3,500 3,500 3,500 4100 Building Permits 71,091 106,020 120,796 41,595 70,400 71,000 42,000 45,000 4101 Permits - Taxi 587 2,179 2,441 643 1,000 1,000 2,500 2,500 4102 DMV - Drivers License 9,058 15,738 16,240 6,293 20,000 20,000 15,000 15,000 4103 DMV - Motor Vehicles 22,032 42,685 46,060 31,423 60,000 60,000 35,000 35,000 4104 Animal Control Licenses 100 85 85 165 200 250 200 200 4105 Business License 11,670 33,120 21,600 12,030 22,000 22,000 20,000 20,000 4106 License and Permits - Misc 2,349 7,461 2,955 2,919 3,150 3,150 3,000 3,000 4107 Inspection Fees 1,626 - 6,180 3,740 1,600 1,660 5,000 5,000 4200 Revenue Sharing 85,793 136,622 107,071 4201 PERS On -Behalf payments by SOA 312,756 256,365 142,298 4202 Jail Contract 368,952 368,952 521,537 - 564,810 4203 Dispatch Contract w/State of AK 36,000 36,000 36,000 36,000 36,000 36,000 36,000 4204 KPB 911 Dispatch 52,800 52,800 52,800 26,400 52,800 52,800 52,800 52,800 4205 Alaska Liquor Tax - - 23,625 - - - 4206 Alaska Raw Fish Tax 350,482 370,953 317,042 - 400,000 400,000 180,000 155,000 4207 Fisheries Resource Landing Tax 1,861 9,928 5,049 416 2,400 2,400 1,000 1,000 4208 Alaska Marijuana Application Fees 300 - - 1,300 300 300 - - 4251 Grant Revenue - Federal Grants 9,979 50,232 10,229 6,304 485,500 487,304 6,000 6,000 4252 Grant Revenue - State Grants 1,851 7,000 9,546 2,500 7,000 7,750 7,000 7,000 4253 Grant Revenue - Misc Grants 500,000 14,636 20,000 4,804 2,500 6,000 - - 4254 Snow Removal Fees - - 800 2,000 - - 2,000 2,000 4300 Admin. Exp. - Jail 112,537 114,788 118,225 - 118,225 4301 Admin Exp.- Harbor 374,258 451,488 465,035 478,980 465,035 478,980 493,349 501,243 4302 Admin. Exp. - SMIC 99,895 148,709 153,170 157,760 153,170 157,760 162,493 165,093 4303 Admin. Exp.- Parking Fund 11,675 12,025 12,385 12,760 12,385 12,760 13,142 13,353 4304 Admin. Exp. - Electric 976,322 1,005,612 1,035,780 1,066,855 1,035,780 1,066,855 1,013,512 1,029,728 4305 Admin. Exp. - Water 269,340 277,420 285,743 294,315 285,743 294,315 303,144 307,945 4306 Admin. Exp. - Sewer 164,483 169,425 172,805 176,261 172,805 176,261 181,549 184,454 4307 Copying Fees 1,893 5,180 12,248 2,160 5,000 5,000 3,000 3,000 4308 Sales Tax Credit 4,000 4,000 3,000 3,000 4,000 4,000 4,000 4,000 4309 Zoning Fees 4,946 4,943 1,854 378 2,000 2,000 2,000 2,000 4311 Community Development - Zoning Fees 100 260 4312 Walkable Mural Application Fee 2,000 4313 Comm Dev Printing Fees 340 - 12 4314 Rezone Fee - 300 - - - - 4315 Replat Fee - 370 200 - - - - 4316 Conditional Use Permit 990 700 4317 Short Term Rental 10,450 6,450 10,950 11,000 11,000 4318 Sign Permit - - 60 60 - 4319 Variance Permit - - 330 - 4320 Misc Dog Fees 300 210 857 1,980 500 500 500 500 4321 Miscellaneous Jail Revenue - - 16,811 4322 Miscellaneous Dispatching 10,000 10,000 - - 4323 Miscellaneous Police Fees 1,925 2,648 2,310 1,415 2,500 2,500 - - 4324 Animal Shelter Donations - - 26,709 542 20,612 4330 Street Work Orders 50 489 - 4331 Shop Work Orders 2,471 868 396 558 2,261 4341 P&R: Punchard Fees - 318 2,163 2,100 2,261 - 2,261 2,261 4342 P&R: Class Registrations 1,409 315 1,250 1,040 1,500 5,000 5,150 5,232 4343 P&R: Facility Rental 28 13,732 21,741 18,477 9,000 19,180 19,755 20,071 4344 P&R: Tournaments - - 684 316 - - - 4345 P&R: Special Events 12,928 13,136 22,886 24,789 19,917 28,717 29,579 30,052 4347 P&R: Shower Fees 7,832 - - - - 4348 P&R: Rock Wall Fees - 128 90 4349 P&R: Pavilion Fees 6,958 7,948 9,255 4,378 8,160 8,323 8,573 8,710 4350 P&R: Camping Fees 960,360 795,105 700,605 553,464 972,375 991,823 818,690 831,789 4351 P&R: Camping w/Utilities 400,138 588,150 620,024 539,279 675,000 700,000 721,000 732,536 4352 P&R: RV Dump Station 39,948 - 4353 P&R: Misc Revenue 64,268 - 1,943 979 - - 4356 P&R: Burial Reservations - - 1,500 (250) 300 300 4357 P&R: Memorial Bench Fees 6,485 2,000 125 2,000 2,000 2,000 2,000 4358 P&R: Camping Reservation Cancellation Fees - 65,590 33,364 58,270 51,000 52,020 53,581 54,438 4370 Library Service Revenue 7,841 15,858 8,019 5,763 10,695 10,909 11,000 11,100 4371 Library Circulation Revenue 34 489 1,118 643 198 202 450 500 4372 Museum Revenue 4,630 385 3,000 3,200 4373 Museum Admissions 7,125 12,840 11,620 14,838 7,568 7,720 8,000 9,000 4380 Land Rents & Leases 50,300 78,199 12,081 46,108 50,000 50,000 52,500 52,500 4382 Jail Facility Rental 30,000 30,000 - - - - 4383 Municipal Building Rent 31,005 41,773 41,128 65,000 65,000 40,000 40,000 4400 Fines and Bails 22,308 28,759 19,514 25,126 16,500 16,500 25,000 25,000 City of Seward General Fund Revenue Detail by Line Item 2024 YTD 2021 2022 2023 Actuals 2023 Budget 2024 Budget Proposed 2025 Proposed 2026 General Fund Revenue by line Item Actual Actual Actual 6/30/2024 Final Final Budget Budget 4500 GF Interest on Investments 30,583 176,183 548,497 1,355,993 - 500,000 260,000 260,000 4501 GF Penalties & Interest 592 1,039 1,634 3,906 1,000 1,000 4505 GF Interest Revenue - Leases 17,985 29,234 - - 4610 Surplus Sales 66,307 307 54,926 5,000 5,000 4611 Gravel Sales 246,279 79,980 81,986 155,734 225,000 80,193 100,000 100,000 4620 Franchise Fee - Refuse 25,050 28,281 28,303 16,805 25,750 25,750 25,000 25,000 4630 City Clerk Fees 60 60 136 208 120 120 120 120 4631 Collection of Doubtful Acconts - - - 114,731 4632 Insurance Recovery/Rebate 41,423 44,085 46,354 4633 Vending Machine Fees 600 600 600 250 250 500 500 4639 Misc Service Fees 1,045 469 30 5,086 4700 Other Financing Sources (2,720,201) 4701 Premium on Issuance of Bonds 574,273 - - - - - - 4702 Proceeds from Issuance of Bonds 2,180,000 - - - - - 5899 Miscellaneous Revenue 28,424 30 9 (96) Net Transfers from other funds 1,438,180 1,474,315 Total Revenues 15,322,795 15,920,874 16,663,672 9,690,710 15,213,509 15,038,263 16,701,933 16,803,544 CITY OF SEWARD HOSPITAL ENTERPRISE FUND Budgeted Statement of Cash Flow For Fiscal Year 2023 ,2024 2025 and 2026 Beginning Cash Balance at I/I/24*: Cash is provided by (used for): Change in net position Add expense items not affecting cash Depreciation Net cash provided by operations Other sources (uses) of cash Debt principal Net increase (decrease) in cash (b) Estimated ending cash balance " Ties to December 3I, 2023 cash and investment balance per ACFR SGH PERS loan PMYT owed to Motor Pool Fund loan matures in 2026. 2024 2025 2026 Budget Budget Budget 2,380,I64 407,161 (26,709) (28,138) 385,750 396,63I 402,977 $792,911 $369,922 $374,839 ($84,549) ($88,988) ($93,659) 708,362 280,934 281,180 $3,088,526 $3,369,460 $3,650,640 CITY OF SEWARD HOSPITAL ENTERPRISE FUND Budgeted Revenue and Expenditures For Fiscal Year 2023, 2024 ,2025 and 2026 Revenue 19100-0000 General Operations Expenditures 19100-0000 General Operations 19100-0000 Debt Service Interest 2024 $ Total: $ Non -operating revenue: $ $ Transfers In: $ Total Revenues: $ Total: Transfers Out Total Expenditures Revenue over expenses: 15,000 15,000 1,625,000 1,640,000 $ 1,073,250 $ 9,589 $ 1,082,839 $ 150,000 $ 1,232,839 $ 407,161 Depreciation Expense: $ 385,750 Depreciation Expense: $ 385,750 Revenue over Expenditures (less depreciation): $ 792,911 SGH PERS loan PMYT owed to Motor Pool Fund loan matures in 2026. 2025 2026 20,000 20,000 954,839 974,839 $ 796,631 $ 4,917 $ 801,548 $ 200,000 $ 1,001,548 $ (26,709) $ 396,631 $ 396,631 $ 369,922 20,000 20,000 954,839 974,839 $ 802,977 $ $ 802,977 $ 200,000 $ 1,002,977 $ (28,138) $ 385,750 $ 385,750 $ 357,612 Hospital Fund Proposed Revenue/ Expense by line Item For Fiscal Year 2025 and 2026 Healthcare Enterprise (19100-0000) Revenue & Expense Budget Revenues: Non -Operating Revenue: 5899 Miscellaneous Revenue 5901 EF Investment Interest 5940 Amort. Of CIA - General Total Non -Operating Revenue: Total Revenue: Expenditures: Non -Personnel Costs: 7009 Contracted Services 7809 Pass-Thru Payments* 7810 Miscellaneous Expense 7900 Depreciation Expense 8001 Unrealized Loss on Investments 8012 Debt Service Interest Expense 8300 Debt Service Principal** Total Non -Personnel Costs: Total Expenditures: 2021 2022 2023 Actual Actual Actual 2024 YTD Actuals (6/30) 2024 Budget Proposed 2025 Budget Proposed 2026 Budget 0 16,549 0 0 79,883 0 0 545,397 0 0 104,608 15,000 20,000 0 20,000 $16,549 $79,883 $545,397 $104,608 $16,549 $79,883 $545,397 $104,608 $15,000 $15,000 $20,000 $20,000 $20,000 $20,000 0 0 0 687,500 687,500 687,500 0 0 0 348,959 360,706 392,704 54,124 232,704 51,242 22,252 18,245 14,028 72,517 76,324 80,331 $1,185,352 $1,375,479 $1,225,805 $1,185,352 $1,375,479 $1,225,805 0 0 0 0 21,901 0 0 $21,901 $21,901 0 687,500 0 385,750 0 9,589 84,549 $1,167,388 $1,167,388 400,000 400,000 396,631 402,977 4,917 - 88,988 93,659 $890,536 $896,636 $890,536 $896,636 * Calculation based on the depreciation of the hospital's assets in 2023. No new addition reported to the City. **SGH PERS loan PMYT owed to Motorpool Fund loan matures in 2026. City of Seward Budgeted Interfund Transfers Fiscal Year 2025 and 2026 TRANSFERS FROM OTHER FUNDS: Boat Harbor Enterprise Fund: One-half of land rents and leases Federal and State lobbying Payment -in -Lieu -of -Tax Seward Marine Industrial Center Enterprise Fund: One-half of land rents and leases Payment -in -Lieu -of -Tax Parking Enterprise Fund Payment -in -Lieu -of -Tax Electric Enterprise Fund: Federal and State lobbying Payment -in -Lieu -of -Tax Water Enterprise Fund: Federal and State lobbying Payment -in -Lieu -of -Tax Wastewater Enterprise Fund: Federal and State lobbying Payment -in -Lieu -of -Tax Commercial Vessel Tax Fund: For SVAC ambulance service to cruise ships For Fire service to cruise ships For GF services to cruise ships; police security, museum movie, etc. TOTAL TRANSFERS IN: 2025 2026 Transfers- Transfers- Transfers- Transfers - In Out In Out 233,100 25,000 257,518 81,945 64,817 33,934 25,000 1,286,146 25,000 164,167 25,000 107,392 20,000 20,000 50,000 236,829 25,000 262,124 83,256 65,839 34,477 25,000 1,306,724 25,000 166,794 25,000 109,110 20,000 20,000 50,000 $2,419,019 $2,455,154 TRANSFERS TO OTHER FUNDS: Hospital Debt Service Fund 954,839 954,839 SMIC Enterprise Fund - cash deficit 0 0 Sewer Enterprise Fund - RV dump 26,000 26,000 Capital Acquisition Fund (equal to State Revenue Sharing) 0 0 TOTAL TRANSFERS OUT: $980,839 $980,839 NET TRANSFERS: $1,438,180 $1,474,315 CITY OF SEWARD SEWARD MOUNTAIN HAVEN ENTERPRISE FUND Budgeted Statement of Cash Flow For Fiscal Year 2023 ,2024, 2025 and 2026 2023 2024 2025 2026 Budget Budget Budget Budget Beginning Cash Balance at I/I/24*: Cash - Legally Required Bond Reserves (a) $1,392,950 Cash - Reserved for Bond Payments (a) $12,765,731 $ 14,158,681.00 Cash is provided by (used for): Change in net position Add expense items not affecting cash Depreciation Net cash provided by operations Other sources (uses) of cash Debt principal Net increase (decrease) in cash Estimated ending cash balance ° Ties to December 3I, 2023 cash and investment balance per ACFR (a) Seward Mountain Haven revenue bonds; matures 2033 1,785,865 1,930,000 (1,233,756) (1,171,756) I,068,745 1,070,000 I,065,000 I,070,000 $2,854,610 $3,000,000 ($168,756) ($101,756) (1,000,000) (1,045,000) (1,I00,000) (1,045,000) $1,854,610 $1,955,000 ($1,268,756) ($1,146,756) $16,013,291 $17,968,291 $16,699,535 $15,552,779 Revenue 19200-0000 General Operations CITY OF SEWARD SEWARD MOUNTAIN HAVEN ENTERPRISE FUND Budgeted Revenue and Expenses For Fiscal Year 2023, 2024 2025 and 2026 Seward Mountain Haven - Revenue & Expenditures 2023 2024 2025 2026 $ 3,179,672 $ 3,275,062 Total: $ 3,179,672 $ 3,275,062 $ - $ Non -operating revenue: $ - $ - $ $ 3,179,672 $ 3,275,062 $ - $ - Transfers In: $ 150,000 $ 150,000 $ 200,000 $ 200,000 Total Revenues: $ 3,329,672 $ 3,425,062 $ 200,000 $ 200,000 Expenditures 19200-0000 General Operations $ 1,068,745 $ 1,070,000 $ 1,065,000 $ 1,058,000 19200-0000 Debt Service Interest $ 475,062 $ 425,062 $ 368,756 $ 313,756 Total: $ 1,543,807 $ 1,495,062 $ 1,433,756 $ 1,371,756 Total Expenditures $ 1,543,807 $ 1,495,062 $ 1,433,756 $ 1,371,756 Revenue over expenses: $ 1,785,865 $ 1,930,000 $ (1,233,756) $ (1,171,756) Depreciation Expense: $ 1,068,745 $ 1,070,000 $ 1,065,000 $ 1,058,000 Total Depreciation Expense: $ 1,068,745 $ 1,070,000 $ 1,065,000 $ 1,058,000 Revenue over Expenditures (less depreciation expense): $ 2,854,610 $ 3,000,000 $ (168,756) $ (113,756) Seward Mountain Haven (19200-0000) Revenue and Expense Budget Revenues: Operating Revenues: ### SMH Patient Revenue for Capital Total Operating Revenue: Non -Operating Revenues: ### EF Investment Interest ### Amort. Bond Premium Total Non -Operating Revenue: Total Revenue: Expenditures: Non -Personnel Costs: 7900 Depreciation Expense 8012 Debt Service Interest 8013 Amort Deffered Loss on Bonds 8300 Debt Service Principal Total Non -Personnel Costs: Total Expenditures 2024 YTD 2021 2022 2023 Actuals Actual Actual Actual (6/30) 3,087,060 3,246,707 3,403,472 2024 Budget 666,066 3,275,062 2025 Budget 2026 Budget 3,087,060 3,246,707 3,403,472 666,066 3,275,062 94,140 94,140 94,140 94,140 94,140 94,140 94,140 3,181,200 94,140 94,140 3,340,847 3,497,613 666,066 94,140 94,140 94,140 3,369,202 94,140 94,140 1,071,165 545,006 98,196 910,000 1,068,744 498,755 98,196 950,000 1,064,766 450,173 98,196 1,000,000 421,026 1,045,000 1,070,000 421,006 98,196 1,045,000 1,065,000 368,756 98,196 1,100,000 1,058,000 313,756 98,196 1,150, 000 2,624,367 2,615,695 2,613,134 1,466,026 $ 2,624,367 $ 2,615,695 $ 2,613,134 $1,466,026 2,634,202 2,631,952 2,619,952 $ 2,634,202 $ 2,631,952 $ 2,619,952 * Calculation based on the depreciation of the hospital's assets in 2023. No new addition reported to the City.