ITEM TITLE:
#26-38 - Amending the 2026 Budget by Accepting an Additional $17.4MM in Unbudgeted Revenue and by Appropriating $12.7MM to Debt Service Fund for Payment of Principal and Interest on Bonded Indebtedness and by Appropriating $4.7MM to Repayment Reserve
SUBMITTED BY: Jordan Nelson, Finance Director
FISCAL NOTES:
Expenditure Required: $17.4MM
Unencumbered Balance: $17.4MM
Funding Source: 2026 Supplemental Assessment issued by Alaska Department of Revenue
RECOMMENDATION:
Approve
SUMMARY STATEMENT:
Pursuant to Judge Zeman’s decision in August of 2025, the State of Alaska Department of Revenue (DOR) has issued a 2026 Supplemental Assessment for Escaped Property.
The Supplemental Assessment compels billing of $13.4MM in Tax Revenue, $814K in Penalties, and $6MM in interest on Escaped Property. Offset by reimbursements owed in the amount of $2MM in Tax Revenue, $164K in Penalties, and $712K in Interest previously billed to taxpayers pursuant to the 2021 Supplemental Assessment issued by DOR in April of 2022.
The net result is $11,420,770.20 in additional (escaped) Property Tax Revenue booked in 2026. An appropriation of $12,660,000 for the repayment and full retirement of the GO22 Sewer Force Main Bond is included. The result of this action will be a reduction in future budgets of $5.1MM in annual debt service expense, previously scheduled until 2032.
Escaped Property Billed (plus P&I) $20,317,492.47
Less Billed Assessments Refunded ($2,919,258.64)
Net Revenue Booked $17,398,233.83
Appropriation to Debt Service $12,660,000.00
Appropriation to Repayment Reserve $4,738,233.83
Net Revenue Booked by Source $17,398,233.83
2026 Supplemental Assessment $11,420,770.00
Interest on Supplemental Assessment $5,326,666.96
Penalty on Supplemental Assessment $650,796.87