Council increases property tax to 11 mills
At the Nome Common Council meeting May 29, the City’s spending year 2019 budget process was all over but the shouting as the panel voted 4 to 1 to increase the mill rate, but leaving a $1.6 million deficit in the general fund budget. That vote takes the property tax rate from 10 to 11 mills on taxable real and personal property.
That means the tax bill on $100,000 assessed property value under this year’s 10-mill rate would be $1,000, but $1,100 at next year’s 11 mills.
The deficit will come out of the City’s savings or fund balance to balance the general fund budget at $13,127,278.
Councilman Mark Johnson cast the lone “no” vote. Councilman Lew Tobin was excused from attending.
The budgets introduced into first reading May 29 comprise the operating budget for the general fund, $13,127,278, an increase of $1,036,496 or nine percent from FY 2018; the school debt service fund, $739,326; the special revenue fund, $278,600; the capital projects fund $185,000; the construction capital projects fund, $175,000; two enterprise funds—the Port of Nome fund budget, $1,762,969 and the Port of Nome capital projects fund, $4,280,000.
The Council held four work sessions to winnow out the budget and on May 23 met in special session to appropriate $3,078,762 to Nome Public Schools. On May 24, the Council directed the administration to prepare a budget based on 11 mills.
The Council could push off the mill increase until next year, but then would have to hike the rate by two mills, much harder to get across to the property owners, Councilman Stan Anderson observed.
“You can fill this place up and have them standing in the streets, or you can take more money out of the bank next year and the third year be out of money,” he said.
Increase in school funding accounted for one mill, Andersen pointed out, and would continue to increase. “That’s a mill that will never go down,” he said. “With other mills going to the schools, that’s a whole lot of money.”
Scot Henderson, head of Bonanza Fuel, but emphasizing he was speaking as himself and property tax payer, asserted that fuel on world markets was zooming upward so that an increase in local prices by 50 cents to 75 cents per gallon would raise sales tax by a mill—$326,000. Fuel is the biggest contributor to sales tax, he reminded the Council. He wanted the potential sizeable increase in fuel-generated sales tax to be penciled into computations driving the need to raise property tax by a mill, he told fellow council members. “What are the projections?” he asked.
The increase in sales tax from fuel had been taken into account by Julie Liew, City of Nome finance director in drawing up budget documents, Tom Moran, city manager said.
Liew provided the Council a memo at the meeting, which listed changes in revenue and expense projections.
Councilman Mark Johnson offered the opinion that an increase in sales tax stemming from higher fuel prices would be offset by decreases in spending on taxable items elsewhere.
“We would be cheating ourselves to keep at 10 mills and go to 12 mills next year,” Johnson said. There might have to be a cut in wages.
The Council will take up the budget with additional discussion when the measure comes up for second reading and final passage on June 11.
In other business, the City received pushback on a proposed ordinance allowing the vacation of a public right-of-way at the west end of Tobuk Alley overlooking Dry Creek. Kirk Reynolds and Bonny Piscoya, owners of a house at 503 West D St. wished to purchase a part of the right-of-way in Block 96 that had not become a proper road in order to consolidate four lots and solve an encroachment.
The couple would pay $11,000, or $5.50 per sq. ft. for the 100-foot by 20-foot piece of land that abuts lots five, six, seven and eight, that was part of the Ray Lang family’s dog lot for 40 years, according to the vacation petition. The Nome Planning approved the plan on May 1 and passed the action on to the Council for final approval. Nearby property owners Melissa Ford, Joe Miller and Bering Straits Native Corp. sent the Council letters objecting to the action following the introduction of the measure into first reading on May 14. They had not been notified, and selling the land would block access to Dry Creek, and future development of their land, they said.
The Council voted down the ordinance vacating the Tobuk Alley right-of-way, based on a finding that the City was in conflict with state law in the ordinance procedure, and because they did not want to set precedence for vacating City rights-of-ways. “Once we give up streets, we are going to have to do it all over town,” Councilman Stan Andersen said.
Two new police officers have joined Nome’s finest. Leighton Cox and Elizabeth Jachim did solemnly swear before the Council and audience “to honestly and faithfully discharge the duties of my office of City of Nome police officers without fear, favor or partiality—and therein do every justice to all persons and to the City, so help me God.” Daniel Angusuc took the vow for the office of City of Nome Community Service Officer.