Katie Anastas

An audit of the Juneau School District shows it ended the last fiscal year with an almost $2 million deficit in its operating fund, up from $1.2 million at the start of the last fiscal year.

On top of that, lower-than-expected enrollment this fall has now grown that deficit to nearly $3 million.

In the coming weeks, district leaders will look for ways to address it.

Audit shows procedural and accounting problems

The audit, which was presented to the board on Tuesday, said district administration violated city and school board policies by spending more money than the board had budgeted without getting approval from the board and city first.

“You spent more than the board had approved and more than CBJ had approved, so that’s where the noncompliance came into place,” Karen Tarver, a partner with auditing firm Elgee Rehfeld, said at the school board meeting.

Cassee Olin, the district’s administrative services director, said the district faced several unexpected costs at the end of the last fiscal year, including some related to its contract agreement with the teachers union. She said the district is now providing the school board with monthly financial reports.

The audit also noted issues with implementing new accounting standards, maintenance of student records and Medicaid billing. Olin said administrative staff are training staff on the new standards and analyzing whether the district should continue to bill for Medicaid services.

Lower enrollment makes deficit grow

Meanwhile, the number of students in the district continues to shrink, causing the operating fund deficit to grow even more.

The district projected that 4,240 students would attend Juneau schools this year. But after schools counted the number of students attending throughout October, the average daily number of students the district submitted to the state was 4,114.

State funding for the district is based on enrollment, and a 126-student gap equals about a $1 million loss in projected revenue. 

That could shrink slightly after state education officials make adjustments based on factors like school size and the number of students with intensive special needs. Superintendent Frank Hauser said the school size factor, which gives more state funding to smaller schools, might benefit the district in the final funding calculation.

“When we start looking at final numbers, there could be some increases for the school size factor calculation for some of our schools, because we do have a little bit lower enrollment numbers,” he told the school board. 

The district will get that adjusted number from the state in December.

Board to address this year’s gap

Between the costs at the end of last year and declining enrollment, the district faces a nearly $3 million deficit in its operating fund. 

The operating fund, which includes state and city funding, pays for salaries and benefits. The district also has a special revenue fund, which can only be spent on specific things; a capital project fund, which pays for building repairs and maintenance; and a permanent fund.

The district can’t move money from its special revenue or capital project funds into the operating fund. And the city has already funded the school district to “the cap,” a limit to local funding set by the state.

That means district leaders will have to find other ways to address the deficit.

Earlier this year, the Juneau School District found itself with a $758,000 funding gap when Gov. Mike Dunleavy vetoed half of the one-time education funding approved by the Alaska Legislature. They addressed it by eliminating two staff positions and paying for four teaching positions with pandemic aid instead of operating funds.

The school board will start to review potential budget revisions for this fiscal year at their next meeting on Dec. 12.

Work on next year’s budget will start soon, too. Board President Deedie Sorensen said districts across the state are facing budgeting challenges as they look ahead to next year. She and other board members attended an Association of Alaska School Boards conference last week.

“I don’t think I talked to anybody, in any district, who isn’t really behind the 8-ball,” Sorensen told the board.

In Anchorage, district leaders may have to increase class sizes or cut certain programs to make up for a $95 million deficit. The Kenai Peninsula Borough School District expects to start the next fiscal year with at least a $13 million deficit.

In this newscast:

• A father and son are charged with more than 50 violations of state fishing laws
• Coast Guard crew involved in a helicopter crash near Petersburg have been released from the hospital
• Questions about how local police handled the deaths of two Kotzebue women

Juneau’s planning commission has approved the Douglas Indian Association’s request to build a cultural learning center in South Douglas. 

The single-story building will overlook Sandy Beach, the site of the former Douglas Indian Village, which Douglas’ city government burned in 1962. It will also overlook Mayflower Island, a traditional subsistence site now owned by the federal government. Classes will focus on Lingít language and food sovereignty. 

“The goal is to actually have a sense of belonging within the community that we do not currently have,” Dionne Cadiente-Laiti, the association’s education director, told the planning commission on Tuesday.

Seven nearby homeowners spoke at the meeting. Most said they were concerned about more traffic near the site, which is close to one of the trailheads into the site of the Treadwell Mine.

“It has been out of sheer concern for the safety of the residents, children, pets, daycare facilities that the neighborhood has always been overwhelmingly opposed to adding traffic and congestion,” South Douglas resident Erica Simpson told the commission. “The construction alone will be a significant and dangerous burden to the residents of the neighborhood.”

Others said the Douglas Indian Association should build the center somewhere else, like on a property they own on North Douglas. But Sean Boily, an architect working on the project, said the North Douglas property’s zoning wouldn’t allow for a learning center. He also pointed out that the South Douglas location is culturally significant.

“There’s a deeper vein than just buying a piece of property and developing it here,” he said. “It has a lot to do with the history of our community that we, and they, don’t want to see forgotten.”

Other residents said they were worried about noise and hours of operation at the center. Cadiente-Laiti said most of the classes would be fairly quiet.

“Our song and dance sessions do not usually go longer than an hour,” she said. “And they’re certainly not daily activities, because we’re conscientious of our high schoolers’ schedule.”

Some commissioners said they shared the neighbors’ concerns about traffic safety.

“I’m in support of the project itself,” Commissioner Adam Brown said. “I just don’t think it’s the right property to put it on.”

Commissioner Mathew Bell spoke in favor.

“In listening to my fellow commissioners, it’s difficult to sit here and listen to what all is being said when we see the value of this project,” he said. “Yes, it’s a very congested, difficult area, but this is Douglas Indian Association’s land. This was where their village was burnt.”

The commission approved the request in a 5-3 vote. 

They denied the Douglas Indian Association’s request to put angled parking spots along the front of the site, where drivers would back out directly onto St. Ann’s Avenue. Instead, they’ll have to put six parking spots on the site itself.

Boily said they hope to start site preparation work this year and begin construction in spring. They hope to finish construction in early 2025.

Tlingit Haida Regional Housing Authority has won a $2 million grant to help tribal citizens throughout Southeast Alaska become homeowners.

The housing authority’s Success Starts With Me program helps low-income tribal citizens qualify for mortgage loans and make down payments.

President and CEO Jacqueline Kus.een Pata said homeownership helps create stability and a sense of responsibility.

“It’s a shift in mindset,” she said. “When that father and that son lay that floor in their house together or paint the walls, they have a sense of pride and ownership. You don’t get that when you’re a tenant.”

Tlingit Haida Regional Housing Authority partners with 12 tribes in Southeast Alaska, including those in Petersburg, Wrangell and Skagway. In 2019, when they asked tribal citizens what they needed most, the most common answer was help buying a home.

COVID funding helped the housing authority kick off Success Starts With Me. Along with loan packages, the program also provides financial education and lessons on home maintenance. 

Since then, the housing authority has built 10 homes in Angoon, Kake and Klowack through the program. Pata said some of the workers who built the homes then ended up buying them, with the help of Success Starts With Me. Four more homes are under construction, in Angoon, Kake and Kasaan.

The program also supports tribal citizens who want to buy existing homes. Pata said one tribal citizen has done that in Juneau.

“That was a better and more affordable choice than building a new home,” Pata said. “The cost of construction is sometimes higher than the homes you can buy off the marketplace.”

The $2 million grant comes from the Housing Affordability Breakthrough Challenge, a nationwide competition by the Wells Fargo Foundation and Enterprise Community Partners. The housing authority is one of six winners.

Christi Smith, who oversees the competition, said Tlingit Haida Regional Housing Authority was the only Alaska-based semifinalist out of 429 applicants.

“This is a program that’s the epitome of what the Breakthrough Challenge is all about,” she said.

The six winners form a cohort that will meet quarterly to discuss the successes and challenges of their projects. Smith said having Tlingit Haida Regional Housing Authority in that cohort will help the other winners have a better understanding of the housing challenges in Alaska, especially among tribal citizens.

“The Breakthrough Challenge is not about one idea in one place that only supports one community,” she said. “It’s about, how can we create new solutions for the broader field?”

Smith said having Tlingit Haida Regional Housing Authority in this year’s cohort means other winners will discuss expanding to Alaska.

“Those are the opportunities that this cohort brings to light,” Smith said. “If we were to bring our innovation to Alaska, what would that look like? What changes would need to be made so that it could be applied to these different communities that have very different needs from where the idea is originally being piloted?”

Other winners of the 2023 competition include a workforce development high school in Birmingham and a modular home manufacturer in Pittsburgh. Pata said she was inspired by other winners’ work on energy efficiency and shared equity models.

“There were a lot of really innovative, creative ideas,” she said. “I’m looking forward to ongoing dialogue and learning from them.”

In this newscast:

• Juneau city leaders and business owners reflect on a record breaking tourist season
• The ACLU of Alaska calls attention too the high rates of death in Alaska prisons
• Ketchikan residents say goodbye to a beloved building after a catastrophic fire

A record 1.64 million cruise ship passengers visited Juneau this year, according to city officials.

“That is about 40% growth from last season, and about 30% growth from our previous busiest year ever, which was 2019,” said Juneau Tourism Manager Alexandra Pierce.

In 2019, 1.33 million cruise ship tourists visited Juneau. Last year, 1.15 million did.

All of those passengers led to more complaints from Juneau residents. The city’s most popular destination, the Mendenhall Glacier, reached its tour capacity. And even some business owners say it was hard to keep up.   

Pierce said that while this year’s number may have felt surprising, it’s in keeping with pre-pandemic predictions. In 2019, when Mayor Beth Weldon established the Visitor Industry Task Force, Juneau expected passenger numbers to continue growing steadily in the coming years.

“Then the pandemic hit,” Pierce said. “We took a few years off, and all of the people that were projected to be here for 2023 came. But we didn’t ramp up into that.”

‘Shoulder to shoulder’

Pierce said more tourists meant more complaints from residents this year — to her, to the Juneau Assembly and to the city’s Tourism Best Management Practices hotline. 

The hotline got nearly twice as many complaints this year as last year. Most were about buses and shuttles, but there were also many more comments in the “other” category, which Pierce said includes things like internet speed and overall busyness.

Downtown Juneau felt busier than ever, and not just because the sheer number of visitors was up. Another reason was the lack of tour bus trips to the Mendenhall Glacier. Tour operators sold out halfway through the season, which meant more tourists stayed downtown.

Pierce said business owners had mixed feelings about the increased foot traffic.

“We heard from business owners that they were doing well financially,” she said. “We also heard from some business owners and people who have been in the industry for a long time that this kind of feels like Juneau’s capacity.”

Kyle Sage, who works at Mt. Juneau Trading Post, called this season “intense.”

“At times, it was shoulder to shoulder in the shop,” he said. “Sometimes I just ran out of stuff.”

Mt. Juneau Trading Post sells handmade drums and ivory carvings along with souvenir jewelry and keychains. 

Sage said he usually reorders merchandise once each season. This year was different.

“Normally I do one reorder,” he said. “This summer I was calling reps — I think I called them two or three times at least to try and stay ahead of the game. Sometimes it worked, sometimes it didn’t. I think I’m still waiting on orders I ordered in August, September.”

Sage is already thinking about next year. He usually orders the bulk of his merchandise in January or February, so it can arrive in April.

“But they’re moving the boats forward, so I’ll be looking to get a March delivery,” he said.

Tuncay Esener, who owns another shop downtown called Pandora’s Box, has also adjusted to the earlier season. His first summer in Juneau was in 2022, and he opened up shop on June 15. This time around, he knew to open the store earlier.

He also changed his merchandise, offering more handmade Turkish goods. He said the colorful, stained glass lamps hanging throughout the store were his most popular product.

He’s looking forward to having more local customers now that the tourist season is over.

“Local people don’t want to come in the summertime because it’s so busy,” he said. “I will be very happy to see local people in my shop.”

Staffing is still a challenge

Research firm Rain Coast Data reports on Southeast Alaska’s visitor industry each year. In this year’s report, they said that despite the record-breaking number of visitors, the tourism workforce was still below 2019 levels.

Gary Totwani and his wife opened their jewelry store, Gary’s Fine Jewelry, in 2020. They’d had high hopes for a record season, before the pandemic hit.

“We were supposed to open in March, but there was nobody in town,” Totwani said. “It didn’t make sense to go into more debt.”

They ended up waiting to open until November 2020. While they’ve built a steady local customer base by offering repairs and custom jewelry, Totwani said hiring remained a challenge this year. They ended up relying on a family member to help out.

“The staffing is a real issue in Juneau,” Totwani said. “We’d try to contact somebody, and then they didn’t have enough experience. And then if they had experience, we’d try to call them and they say, ‘I will come,’ and nobody shows up.”

In an April 2023 survey, business owners in Southeast said the lack of housing and childcare were the biggest challenges to hiring and retaining workers.

Next season will be longer

Next year’s season will be Juneau’s first with a limit of five large ships per day. Pierce thinks Tuesdays in particular will feel less hectic next year.

“Our busiest Tuesdays this summer were about 21,000 passengers, which is a shocking number of people,” she said. “Our busiest Tuesdays next summer will be about 17,000. Still heavy days, but it’ll reduce the maybe fever pitch that we saw in some of the busiest days this year.”

Overall, though, the total number of visitors in the season will remain about the same.

“The 2024 season will be similar in volume, but slightly longer,” Rain Coast Data analysts wrote in their report. “The cruise ship season is expected to run a full seven months.”

Juneau’s first ship of the 2024 season is scheduled for April 8, and the last is scheduled for Oct. 24. But Pierce says bigger ships — and ships with fewer empty beds — have contributed more to growth than longer shoulder seasons have. 

“Our steady numbers for 2025 tell me that they’re keeping the same ships in the market, more or less, and that things are kind of leveling off,” she said. “That allows us to have the conversations we need to have for 2026.”

In the meantime, city leaders will soon start deciding how to spend this year’s marine passenger fees — the $5 per cruise ship passenger fee meant to fund projects that both improve the tourist experience and offset the industry’s impacts on locals. 

Pierce has a few projects meant to reduce congestion that she’d like to see funded. One is a downtown circulator bus, which would help tourists get to attractions outside the core of downtown, like the Alaska State Museum and the Governor’s Mansion.

She’d also like to see funding put toward extending the Seawalk to the AJ dock.

“It will take a lot of shuttle buses off the road,” she said. “Right now, they shuttle a lot of people because it’s not really an attractive walk. If you get off your ship and it’s a nice walk down the dock into town, that’s a really different proposition.”

The city will also spend the next few weeks surveying Juneau residents about the season. Pierce said those results, along with results of a visitor survey, will be ready for review by the Juneau Assembly in early December.