ITEM TITLE:
#25-36 - Establishing Council Priorities for the 2026 Operating Budget
SUBMITTED BY: Jordan Nelson, Finance Director
FISCAL NOTES:
Expenditure Required: n/a
Unencumbered Balance: n/a
Funding Source: n/a
RECOMMENDATION:
Approve Resolution 25-36.
SUMMARY STATEMENT:
The budget parameters document (Attachment A) captures the council budget priorities for the 2026 operating budget as discussed, refined, and articulated through the city council strategic planning session and the budget parameters workshop held on August 5, 2025. This document provides formal direction to management as they construct their budgets.
Departments begin working on budgets August 1st of each year and submit them for review by the city manager by August 31st. The budget parameters approved by council provide high level strategic direction to administration and departments in the development and review of each budget.
The Budget parameters Identifies the four top priorities of the council.
• Housing
• Childcare
• Maintenance
• Expand outdoor recreation, tourism, and Community
The Budget Parameters makes the following assumptions for the 2026 budget:
Revenues
• 20 mill property tax levy
• 1.5% permanent fund appropriation
o As directed by Council, Management will minimize the utilization of this appropriation in 2026 and identify methods to further reduce use of this appropriation in future budgets
• Special revenue funds
• Port/harbor will set rates and expenses to avoid a general fund operating subsidy
• Airport will minimize required general fund operating subsidy
• No Change to Utility Fund rates which results in general fund operating subsidy
Expenses
FTE Personnel
• 2.3% COLA based on Anchorage CPI,
• Benefits Increase of 13.2%, Health insurance catch-up increase of 21.3%. Management is directed to examine options to reduce costs without reducing quality of benefit.
Education: funded to maximum local contribution in accordance with prior year funding
Other Expenses: Each department quantifies every expense. Department goals are to stay below 5-year inflation growth and year over year CPI.
Community Service Organizations:
• Funding target is not more than 50% of the Valdez Program Budget
• Aggregate below 2% of Overall city budget