Voters to weigh in on city manager, sales tax cap

The decision to put the measures on the ballot was approved at Tuesday’s assembly meeting.

Voters will get to weigh in on two measures — one changing the borough mayor’s role and another increasing the sales tax cap — in October’s municipal election.

The decision to put the measures on the ballot was approved at last Tuesday’s Kenai Peninsula Borough Assembly meeting.

In a narrow five to four vote, the assembly passed an ordinance that would establish a manager form of government, which would shift chief administrator duties to a manager. According to the ordinance, the form of government is used in 12 out of 19 Alaska boroughs.

Sponsored by assembly members Hal Smalley and Kelly Cooper, the ordinance would allow the assembly to appoint a borough manager through a majority vote.

In a June 20 memo from Cooper and Smalley to the assembly, they said the mayor would still be elected area wide, but would no longer be the chief administrator.

“The mayor would serve as chair of the assembly, still be able to participate in assembly discussions, may vote on assembly actions in the case of a tie and may veto assembly actions,” the memo states.

This form of government can be initiated either by a petition or by a motion adopted by the assembly.

If approved by the voters, the assembly would adopt a manager plan after the next mayoral election in 2020.

The ordinance received criticism at Tuesday’s meeting, with many who spoke saying they wanted to see a plan for the transition.

Duane Bannock of Kenai said he believes the ordinance will fail at the election, which is just over 50 days away, because there is no plan.

“What’s your plan?” Bannock asked the assembly Tuesday night. “It’s not in the ordinance or in the memo. What are the qualifications for new manager? What will recruitment and selection and hiring processes include? Who will be in charge of the process? What’s the salary range and benefit package being offered?”

Stormi Brown, Kenai resident and former human resources director for the borough, said she doesn’t think the additional salary should scare people from the idea of a borough manager.

“That borough manager will go through an interview and recruitment process,” she said. “An elected strong mayor doesn’t have to be qualified to know anything. They don’t have to know how to manage money or staff or contracts or anything at all, and they get just under $100,000 in salary.”

Others who spoke expressed concern about the people of the borough being unable to vote a manager out.

“We have no way of getting rid of this borough manager if he keeps five people on this assembly happy,” Wilma Hanson of Nikiski said. “We don’t need a borough manager and that’s a fact.”

A similar ordinance failed in 2010, assembly member Dale Bagley said at the meeting, and he suspects this ordinance will again.

If approved by the voters in October, the assembly would have one year to prepare a plan for a borough manager form of government.

Sales tax cap

An ordinance increasing the sales tax cap increase from $500 to $1,000 will also be going to the voters in October.

The ordinance was introduced by Mayor Charlie Pierce and assembly member Kenn Carpenter and is aimed at maintaining future fund balances, according to the ordinance document.

“Due to the continuing uncertainty about state and local revenues, the decline in state assistance to municipalities, the increasing loss in property tax revenues to the borough from exemptions on real property, and increasing reliance on borough funding for the school district, the borough must take steps to maintain its unrestricted fund balance into the future within financially prudent and responsible parameters to enable it to fund the services and public education programs as desired by borough residents,” the document said.

“I just ask the people that come in here and ask for more education money, to get on the street corners and do their part to pass this measure,” assembly President Wayne Ogle said at the meeting.

In a July 25 memo to the assembly, Borough Finance Director Brandi Harbaugh said estimates indicate the increase would generate approximately $3.1 million to $3.4 million annually in borough revenue.

The ordinance passed the assembly seven to two, with assembly member Brent Hibbert and Bagley voting against sending the question to the voters.

“This has been in front of us before,” Hibbert said. “I think we had a great plan with the bed tax. I think it would have passed … I don’t think this is going to make it. I’m going to vote no on it.”

“I think we did have a good plan there with the bed tax and I hate to see this thing trump the bed tax,” Bagley said. “I strongly believe this will get shot down when the voters vote on it.”

Other assembly members were reluctant to pass the ordinance to the voters, including assembly member Norm Blakeley.

“After being on this body for awhile, it seems like we have a real problem spending money constantly,” Blakeley said. “We’re going to get another $3.4 million out of this and I know its going to be spent, somehow somewhere, and that’s my problem with it. But, I think the people have a right to vote on it but I’m not crazy about doing it.”

Tyson Cox, a current council member in Soldotna, urged the assembly to pass the ordinance to a vote of the people.

“The argument of whether it should be $500 or $1,000 is not really he argument we should be having right now,” Cox said at the meeting. “It’s should we bring this to the people and let them decide? I personally believe so. I would like to vote on that and I’m sure there’s a lot of people that would.”

Currently, the borough’s sales tax is only applied to a maximum of $500 per sale, rent or service transaction. This sum was enacted in 1965, and never adjusted for inflation or otherwise. The ordinance states the value of $500 in 1965 would have been equal to $3,195 in 2018, according to the Alaska Department of Labor Anchorage Consumer Price Index inflation.

The ordinance would keep the sales tax cap to $500 on rents, since an increase in the overall cap would disproportionately affect tenants.

“Affordable rental housing is important for the borough and its residents, and the borough’s best interests would be served by keeping the cap on residential rentals at $500 per month,” the ordinance document states.

If approved by voters, the increase would be effective Jan. 1, 2020.