It was a good year on the stock market, with the borough’s Permanent Fund savings account gaining about $3 million, 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 on June 23.

Wrangell residents voted in 1997 to create the savings account, setting aside a portion of the $37 million in one-time money the community received in 1996-1999 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 Wrangell 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 considered a draw last year but did not proceed.

That is changing with the fiscal year that starts July 1.

The borough assembly agreed with the manager’s recommendation to withdraw $425,000 this year to help cover debt payments on the new water treatment plant that went into service in 2025 ($250,000) and to replace some of the borough’s oldest vehicles — work trucks — in its maintenance and capital projects fleets ($175,000).

The borough took out a $6.5 million federal loan to go along with $16 million state and federal grants to build the $23 million water plant. The $250,000 transfer from the Permanent Fund will cover this year’s debt service, without having to rely on ratepayers to cover the cost.

The assembly reviewed the budget in back-to-back work sessions June 23 and 24. It was scheduled to approve the spending plan at a special meeting on Monday, June 29.

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.” Though the past few years have been unusually profitable for the fund’s investments, projected earnings for the years ahead are conservative, producing the $425,000 sustainable draw available for spending.

Anything more than the sustainable draw would require a vote of the public.

The intent of the limitation is to protect the fund from losing value to inflation, similar to the annual cap on withdrawals from the Alaska Permanent Fund.

In Wrangell’s case, it might make sense for the assembly to ask voter approval to pull out some of the record investment earnings of the past few years to fund needed community improvements, such as downtown waterfront developments and upgrades to parks and playgrounds, Villarma said June 23.

“It is something to contemplate,” he said.