Property tax rate remains 11 mills
The Nome Common Council in several work sessions has hashed and rehashed the City’s spending year 2017 general fund budget. Monday night they talked it over again.
Should they adopt a budget requiring a 12-mill or an 11-mill property tax to back it up? Four Councilmembers—Stan Andersen, Louis Green Sr., Tom Sparks and Lew Tobin favored cuts to keep the budget lower to maintain this year’s 11 mills. That would reduce the take from the fund balance, some said. Councilman Jerald Brown and Councilman Matt Cully liked lower taxes they said, but they also felt the City needed to keep building a savings account, more likely with a 12-mill property tax. Twelve mills would make a big dipper going into the fund balance less likely than when the 11-mill revenue fell short. Eleven mills won.
“I want 12 mills,” Culley said. “It’s more responsible. I want to support preschool.”
“I think we can live with 11 mills,” Andersen said, suggesting that the City put a summer season sales tax increase to a public vote and sell some property, such as the former library-museum site on Front Street and sell the blue childcare building on the east end of town to Kawerak, operators of Head Start.
Sparks has been a proponent of an increase in sales tax during tourist and mining season.
“It’s an easy shot to get the property owners,” he observed. “Put a seasonal sales tax before the voters and if we are forced, look at property tax next year.”
“I’m comfortable with these cuts after hearing more,” Brown conceded, adding that the figures seemed to have been revised with more information. Brown had been opposed to 11 mills, mentioning a need to fund Nome Preschool Association among other reasons. Based on an assessor’s most recent valuation of Nome properties, a mill would equal around $288,000.
Julie Liew, finance director assisted the discussion by putting on paper list of suggested cuts to tailor down an earlier 12-mill budget to fit 11-mill money. For keeping an 11-mill property tax, total revenue decreased by $291,354 (from $10,915,135.50 to $10,623,781.50).
The cuts featured deferring new purchases of vehicle/equipment and major building replacement costs, and re-adjusting utilities costs by about $50,000, based on current fuel prices to reduce expenditures by $291,354. Out went a floor replacement at the public works building along with reduced maintenance, a reduction of $188,000; out went some workout equipment and men’s sauna updates at the Rec Center—projected saving, 19,000; out went $16,000 in administrative costs and also a combined $14,000 at the library, museum, Richard Foster Building Katirvik Culture Center and police department, $6,984.
These, among the 20 or so pared down items decreased expenditures by $291,354, taking the general fund expenditures from $$11,053,073 to $10,761,719.
What about preschool? Kawerak, Inc. has been voicing a need for about $190,000 to fund two certified Early Childhood Education teachers for Head Start. Nome Preschool Association needed $90,000 for one teacher.
Currently, the money has gone back into Gov. Bill Walker’s budget. However, that money could be dropped from state funding again, leaving the two organizations knocking on the doors at City Hall again.
Nome Public Schools by law can legally fund only K through 12 educations. One way the City could fund the little kids’ teachers would have to take money back from money provided the school over the state-- required amount and give it to the toddler programs or allow NPS to administer the money as a grant. Nothing doing, Andersen has maintained.
“For myself, it’s too expensive. We’re not paying $250 for those teachers,” he said; the school would have to figure forward year-to-year a cheaper way to do it, “if you’re going to get my vote.”
With the cuts necessary to maintain 11 mills, he didn’t know where the City would get even $90,000, Tom Moran, city manager said.
“I agree with Culley on this,” Brown said. “I want to see money in the budget for preschool.
“I agree Kawerak has a little more money to play with than Nome Preschool Association,” said. He then introduced a motion to insert $40,000 into the general fund budget for Nome Preschool Association to use as they saw fit.
Sparks wanted to wait a couple of weeks to see how the governor’s budget came out. There was no plan for the $40,000, Andersen said. “I want to see more. I would like to see the whole plan.”
Nome Preschool had a plan and had presented it at an earlier work session, Culley said. Parents volunteered. “Nome Preschool fundraises like no other organization in this town,” he said. “It’s not like they are going to waste [the money],” he said.
Tobin wanted to know the source of the $40,000. Brown’s motion failed. However, he succeeded in getting a commitment to insert the $40,000 in the Special Revenue Fund Budget through the Norton Sound Economic Development Corp Community Benefit Share, stemming from tie vote of 3-3 with Mayor Richard Beneville breaking the impasse with a yes vote.
All in all, the Council achieved second reading and final passage of seven City of Nome budget measures:
General Fund Budget $11,053,073.
School Debt Service Fund Budget, $590,626.
Special Revenue Fund Budget, $280,650.
Capital Projects Fund Budget, 41,384,619.
Construction Capital Projects Fund Budget, $20,000.
Port of Nome Fund Budget, $1,888,000.
Port of Nome Capital Projects Fund Budget, $3,893,300.
In other business, the Council turned down another appeal from Norton Sound Health Corp. to waive failure submit its annual sales tax exemption application by the Jan. 1 deadline and to refund any sales tax the corporation paid so far this year. As a result, NSHC lost its sales tax exemption on purchases. The application fell through the cracks as the corporation had employee turnover exacerbated by leaves of absences by a couple of employees working in the finance division, Angela Gorn, CEO and president, said in her letter.
Because most vendors assumed NSHC still had the exemption, NSHC had paid no sales tax in the first three months of this year. Therefore, the Council had ruled the organization would have an exemption for the first half of the year and as a penalty, pay sales tax from July 1 through Dec. 31. The Council reaffirmed that decision taken at its May 23 meeting.
Mayor Richard Beneville nominated candidates for a pair of vacancies on commissions. The Council ratified his choice of Rob Cahoon for Nome Planning Commission and Doug Johnson for the Nome Port Commission. Both are incumbents who refiled for their terms expiring this month. Judy Martinson had applied for the NPC after the deadline; Beneville also considered applications from Thomas Okleasik and Patty Lillie whose applications had been submitted earlier this year for other vacancies. He cited Cahoon’s three years’ service on the NPC and “doing a good job.”
A group from the U.S. Coast Guard, along with representatives from state Department of Environmental Conservation and Alaska Chadux previewed a seminar concerning seasonal operations in the region slated for June 14 and 15. The seminar was to feature a day in the classroom and then an outing to see the placement of a containment boom near Hastings.
Citizen Pearl Johnson in a letter expressed displeasure with littering in Nome and the absence of a public restroom downtown.
Citizen Rodney Jones took the podium during citizens’ comment period and registered indignation concerning what he deemed rude and aggressive behavior by a City employee directing him to move cars in the RJ’s Auto neighborhood. The situation would be handled in house, Tom Moran, city manager said.