Local News

Council eyes tax increases

This week, the Ketchikan City Council has been tackling a proposed 22 million dollar FY2014 general budget.  After meeting Monday and Tuesday, the council is proposing sales and wastewater tax increases.  The council is also considering nixing a controversial art project.  

On Monday, the Council began debating the FY2014 budget.  City Manager Karl Amylon says the budget originally proposed by staff maintains the status quo and is not sustainable.  He presented a draft budget that would eliminate more than a dozen jobs.  Amylon says he and Finance Director Bob Newell did not support the proposed budget, but that it is a start.  He mentioned several reasons the city is in its current financial situation.

“The last couple of years we will have added $850,000 in debt service for the fire station and library.  At the same time when the city council opted to remove annual revenue of at least $439,000 from the general funds raw fish tax to pay for the drive-down ramp.  That’s a combined swing of almost $1.3 million.”

Amylon says if the council wants to maintain current levels of services and staffing, additional revenue is needed.  He says even with revenue increases, additional cuts will likely be needed.

“Some reductions in spending need to be made now.  Unfortunately I believe this will likely lead some council members to conclude that not all staffing cuts should be restored.”

Amylon spoke about the interest by some council member in using Cruise ship Passenger Vessel tax funds to help solve revenue problems.  He says that likely is not possible for at least a year due to other CPV funding needs.

City Mayor Lew Williams shared his thoughts. He mentioned the use of CPV funds or raising taxes.

“There are other options in the way of looking at a 5 tenths of a mil increase.  There is also an option of capping the raw fish tax going to the harbor and taking part of it back into the general funds.

He then asked other council members for their ideas.

Council member Bob Sivertson made several suggestions including using a portion of the wharfage fees and implementing a seasonal sales tax.  Sivertsen says he does not support increasing property taxes, but says the money has to come from somewhere.

“I don’t like to raise taxes or utility rates any better than anybody else, but it costs money to live here and prices are going up.  When I look through the budget, we’re looking at 10 percent in workman’s comp, 15 percent in insurance costs.  We have employee raises and we’re not putting in any new revenue.  So we’re going to fall behind if we don’t do something.”

 Several council members expressed concern about more than $5 million in debt, saying that should be considered before taking on any new projects. 

Council member KJ Harris says the city has to stop shifting money from one account to another.  He says he does not support laying off employees. 

“This is a real tough time kids.  We’ve got to go back to the wants and needs again.  We want a lot of things; there are some things we need.  We have to raise revenue or we’re real screwed.”

After some discussion, Amylon addressed the council.

“What we’re doing is proposing a one-half percent increase in the general fund sales tax, that would be dedicated to fund operational costs and the debt service associated with the library.”

He says that would eliminate the need to seek library funding from the borough.  Amylon also proposed a 4 percent increase in the wastewater tax.

Ultimately, the council voted Monday night in favor of both proposals, amending the budget to include a 0.5 percent sales tax increase and a 4 percent increase on the wastewater tax.

 Budget talks continued Tuesday.

 Ketchikan Gateway Borough Assembly member Mike Painter addressed the council.  He clarified he was speaking as a private citizen, not on behalf of the Assembly.  Painter says he adamantly opposes raising the sales tax.  He says the council needs to make hard decisions, including cuts.  Painter criticized the city’s decision to budget $100,000 for a rain gauge, and says he also opposes city manager Karl Amylon’s proposed salary of over $170,000.  He remarked that Governor Sean Parnell’s salary is $145,000.

The council voted 4 to 2 in favor of restoring Community Grant funding with Council members Sivertsen and Judy Zenge voting against.

The council also voted 4 to 3 in favor of restoring funding for the Small Business Development Center.  Council members Harris, DeAnn Karlson and Marty West, opposed the funding restoration.

Additional budget meetings are scheduled for December 9th, 11th and 12th.  The Ketchikan Public Utilities budget is expected to be taken up during those meetings.

Prior to adjourning, Sivertsen requested four-hands approval to add termination of funding for the rain gauge project to the agenda of the next regular meeting.  That item will be added to Thursday’s agenda. 

Also at Thursday’s meeting the council will consider awarding contracts for improvements to Berths II and III, and repair of the Hopkins Alley trestle.  It will also consider a change order adding a wooden pedestrian plaza at Berth II and discuss the ability of council members to retain city-purchased iPads after termination.

The council meets Thursday night at 7:00 pm in City Council Chambers.

Public comment will be heard the start of that meeting. 

 

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