Flanked by sons Jake and Mike, Jeff Jabusch bids goodbye to public life at his retirement party on Saturday. His four decades as Wrangell's finance director and city manager conclude on Friday.
The Wrangell Borough Assembly passed on first reading several ordinances related to marijuana, including an additional excise on that cultivated on the island.
Under one proposed code change, a new section would affix a $10 tax per ounce on "the sale or transfer of all marijuana from a marijuana cultivation facility ... to a retail marijuana store or a marijuana product manufacturing facility."
"The cultivator pays the tax," explained city clerk, Kim Lane.
It and the other ordinances were put together by a committee made up of Lane, Mayor David Jack, and Assembly member Patty Gilbert. The city's attorney also reviewed the items, which have been revised to eliminate redundant taxes, levied at multiple stages of production for the same plant.
Producers are already reporting and paying taxes to the state on a per-ounce basis, so Jack explained that calculating what would be owed to the city would be simplified.
"We looked at other municipalities," added Gilbert, explaining how the $10 amount had been reached.
The excise would apply only to cultivated marijuana, rather than adding to the $50 per ounce sales tax currently enforced by the state. That was a decision of expediency, Lane explained, as municipal code requires that any changes to the sales tax would have to go to a popular vote. It would also be a departure from practice, as Wrangell currently does not charge additional rates for specific items, such as fuel or tobacco. The seven-percent sales tax would still apply to retail sales of marijuana, though under the proposed ordinance such products would be exempt from annual tax-free days.
Assembly member Julie Decker questioned whether tax revenue gained from the excise should be specifically set aside for a designated use, such as for school activities. Lane explained that on the advice of the attorney and finance director Lee Burgess, the committee had opted to route funds into the general fund. This would allow the Assembly greater fluidity in allotting the funds come budget time, she reasoned.
"One organization that may be struggling right now is the city," said Jeff Jabusch, the outgoing city manager.
"Or the school," Decker added.
Assembly member Becky Rooney thought it would be wise to wait and see what effects legalization might have on emergency services and enforcement needs, before determining how to spend the additional revenue.
"We just don't know how it's going to play out," she explained.
"I think this is the safest way to do it, at least for now," Lane concluded.
The group agreed, voting unanimously to pass the item on first reading. If modified at the April 11 meeting, Lane pointed out the ordinance would have to undergo another reading with a public hearing before it could be adopted.
Additional ordinances limited business hours for cannabis-related activities to be prohibited between the hours of 6 p.m. and 8 a.m., Monday through Sunday. They also laid out the conditions under which the city would protest application for a license with the state Marijuana Control Board. These are also up for public hearing on April 11.
In other borough business, the Assembly approved a change order in the amount of $2,501 for the city dock lighting project. Contractor Buness Electric won the project bid for $254,440 in December despite a lower bid being submitted, due to a local preference bid. The additional amount would not put the Wrangell contractor's bid beyond the five-percent margin above which the ordinance would not have applied, but Jack wanted to make clear that the error had been on the part of the city.
"The reason for this change order is that the plans were not correct. It was not the contractor's issue," he said.
Assembly members also approved initiation of the first phase of the Wrangell Institute master plan commissioned last year. Prepared under contract by Juneau firm Corvus Design, the plan broke down future redevelopment of the 134-acre property into manageable steps. The first step would be to prepare around five acres for medium-density residential, which under the original plan would encompass 10 lots and cost about $827,576.
At a public planning session held in June, contractor R&M Engineering estimated the total cost for the site's envisioned development could surpass $9,000,000. Even moving forward in small steps, Jabusch explained city staff's proposed first stage was an alternative to the master plan. Rather than start at the southern end of the property and have to extend sewage, road and water access further – which could cost anywhere from $160,000 to $200,000 – a subdivision at the northern, closer side would be developed first at a reduced cost.
"We are looking at a way to start out with the least cost to utilities," he said.
Economic development director Carol Rushmore roughly estimated that to break even, third-acre lots would have to sell for around $30,000. However, covering costs was not the primary consideration in the longer run of things.
"The goal is to get them out, increase your tax base, get people building on them," Jabusch explained.
For capital improvements, the Assembly approved hiring contractor Jensen Yorba Lott to prepare designs for replacing the roofing and siding of both the Public Safety Building and public pool facility. Both buildings are in dire need of an upgrade, and the $17,870 fee would cover preparation of construction plans, to be covered from the FY17 capital line item.
Finally, the Assembly and city department heads wished Jabusch luck on his retirement, with Friday to be his last day.
"I've enjoyed working with the Assembly the past three and a half years," Jabusch told them. He said he appreciated the time and effort Assembly members put into their positions, which are strictly voluntary. "You only get paid in grief, it seems."
In his bimonthly report, he had warned that further cuts to state revenue sharing and education allotments being considered on the Senate side could have a significant impact on the community's finances.
"We certainly have challenges ahead of us," Jabusch said. However, he noted that in the 40 years he's worked at City Hall, that's always been the case.
Jack read the outgoing manager a letter from Sen. Lisa Murkowski (R-Alaska), congratulating Jabusch on a job well done. Jack also presented him with a plaque on behalf of the Assembly. Noting the job was not the easiest, he told Jabusch, "I'm glad you stuck in there, Jeff."
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