The Ketchikan City Council meets in regular session tonight, Thursday, and will consider a resolution establishing a this year’s property tax rate.
During annual budget deliberations in December, the Council voted to maintain this year’s property tax rate at 6.2 mills, going against a recommendation from city management to raise the rate to 6.5 mills.
One mill equals one dollar per $1,000 assessed value. A 6.2 mill rate would mean that a homeowner with a house assessed at $200,000 would pay the city $1,240 this year in property tax.
In a memo, Finance Director Bob Newell wrote that while property value assessments within city limits did increase this year by about $7.3 million, assessments didn’t go up as much as the city’s 2012 budget had anticipated.
That means a shortfall of about $100,000. Newell wrote that the general fund had an expected deficit of about $1.36 million this year, with reserves at close to $3 million.
However, he noted, the state Legislature increased revenue sharing, and the city’s 2012 debt service for the new library building was $350,000 less than anticipated . Newell wrote that the new general fund deficit, with a 6.2 mill rate, would be between $200,000 and $500,000; and the new reserve fund level would be between $3.8 and $4.1 million.
Newell anticipated additional costs next year, including bond payments; and potential reduced revenue. He writes that the combination could mean a $766,000 hit on the 2013 budget.
In a separate memo to the Council, City Manager Karl Amylon cited that concern and wrote that the Council might want to consider a gradual increase in property taxes.
On Monday, the Ketchikan Gateway Borough Assembly established a boroughwide property tax of 5 mills. If the Council approves a 6.2 mill rate Thursday, city residents will pay a combined property tax of 11.2 mills.
Also tonight, the Council will consider establishing Oct. 13 as a boroughwide sales-tax holiday, a move that already was approved by the Assembly on May 7.
If approved, it will be the second sales-tax holiday for the community. Sellers are not required to participate, and some purchases are not included in the holiday. Those include rentals that last longer than one day, taxable utility services and fuel.
According to a memo from the borough Planning and Community Development department, the Planning Liaison and Economic Development Committee plans to develop a survey for merchants. That survey would help determine whether the event increases sales and brings customers from out of town.
The Council also will vote whether to reconsider a motion it approved during its last meeting. That motion reclassified the position of deputy clerk, placing it at a higher salary level. Council Member K.J. Harris submitted the reconsideration request.
The Council will end the meeting with an executive session to discuss contract negotiations between the city-owned Ketchikan Public Utilities and the International Brotherhood of Electrical Workers.
Thursday’s meeting begins at 7 p.m. in City Council chambers. There is time for public comment at the start of the meeting.