The borough’s Permanent Fund savings account earned about $3 million on its investments over the past 12 months, growing from $11.5 million a year ago to an estimated fiscal-year close of more than $14.5 million on July 1.
That’s on top of the $2 million the account earned over the two previous years.
“The last three or four years have been really, really good,” Borough Manager Mason Villarma told the assembly at a budget workshop.
Wrangell residents voted in 1997 to create the savings account, setting aside a portion of one-time money the community received from Congress, designated to help Southeast Alaska communities recover and rebuild after the loss of the timber industry.
The savings account started with $5 million, which has been invested in stocks and bonds over the past 30 years.
During the 2010s, the assembly withdrew $250,000 a year from the fund’s earnings to help with the budget for public services. But there were no withdrawals between fiscal years 2021 and 2026, allowing the fund to grow even larger.
The assembly agreed with the manager’s recommendation to withdraw $425,000 from earnings this year to help cover debt payments on the new water treatment plant that went into service in 2025 and to replace some of the borough’s oldest vehicles in its maintenance and capital projects fleets.
Municipal code allows the assembly to withdraw each year up to a “maximum sustainable distribution rate,” calculated as the long term expected return of the fund less inflation and expenses. That’s $425,000 for this year.
Anything more than the sustainable draw would require a vote of the public.
