The Borough Assembly approved the collection of property taxes for the next fiscal year at their May 28 meeting, continuing the mill rate currently paid by residents of the City and Borough of Wrangell for another year.
The Assembly voted 7-0 to approve the rate.
The ordinance will, except for property that is exempt by law from taxation, set the mill rate at 12.75 mills for the tax year 2013, 4 mills for the Wrangell Service Area, 4 mills for property outside the Service Area, and 4 mills for the tax differential zone. Taxes due and payable on or before Aug. 15, however, the taxpayer may pay their taxes in two installments.
Jabusch said the mill rate currently paid would remain the same, despite a move by voters to see it increased.
“The mill rate is proposed to remain at the current 12.75 in the service area (land on Wrangell Island on the road system) and 4.00 mills for all other parcels within the borough,” Jabusch wrote in a memo to the Assembly regarding the ordinance and acceptance of the proposed city budget. “This represents the third year in a row that the mill rate has been proposed by staff to remain at existing levels despite voter approval to raise it to 13.”
The Assembly also passed the 2013-14 budget with on a 6-1 vote, with member Ernie Christian voting against it. Christian, along with his wife Rhonda, are the backers of a 5.5 percent tax-rate reduction initiative that will appear on the October ballot.
A question about whether a page outlining the losses to the city budget if the 5.5 percent reduction is approved by voters should be removed from the official document was also raised when Christian. The motion went down to defeat, with only Christian and member James Stough voting yes.
Jabusch added in his memo that some factors affecting the city remain unknown at the current time, but could be addressed at a future date if they are shown to be detrimental to Borough operations.
Two of the budget items discussed by Jabusch are increased health care costs and a proposed reduction of the sales tax rate to go before voters in October.
“Currently, the budgeted (health care) increase is 37 percent,” Jabusch wrote. “The City and Borough of Wrangell's insurance specialist is looking at all options available to us. The outcome cannot get worse, only better or the same. We hope to have more information back in the next couple of weeks.”
Regarding the sales tax rate decreasing, Jabusch stated that a backup plan for funding city departments is in place should the measure pass.
“The Sales Tax Proposition to be placed on the October 1, 2013 ballot will be decided by the voters,” he added. “The contingency plan is in place … and would be part of the approved budget. In the event the proposition passes, all of the items that can go into effect immediately will, and those that cannot (such as the increase to property taxes) would go into effect at the next available opportunity.”
The “contingency plan” alluded to by Jabusch includes a reduction list of just more than $424,000 of spending that would be trimmed from Borough expenditures.
Some of those reductions would include $25,000 to the Wrangell Chamber of Commerce, $196,000 given to the Wrangell School District, $4,000 for Fourth of July fireworks, and $15,000 provided to the senior citizen program.
An elimination of tax-free days is also on the table, along with an increase in the mill rate. According to Jabusch, both items could increase revenue by approximately $57,000.
The city would see a total sales tax loss of $503,000 should voters approve the measure.
In other Borough Assembly business, the group approved the 2013-2014 fiscal year budget for the Wrangell School District, a contract with Solid Waste Disposal and Recycling, and a request to send a letter to the Borough Assembly of Petersburg and the Ketchikan City Council from the Wrangell Special Energy Committee concerning a review of the relationship between the Southeast Alaska Power Agency.
Committee chair and Assembly member Pam McCloskey explained the reasoning behind the letter.
“This was a letter that we had the first meeting and this is what we felt was going to be the probationary review,” she said. “The people from Petersburg and Ketchikan, if they had any questions, or we had any questions on some of SEAPA’s infrastructure and operation … we could have set it forth to us and send it to an independent contractor if needs be.”
The next meeting of the Assembly is set for June 25 at 7 p.m. at City Hall.
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