Kenai Peninsula Borough residents will see another tax cut if Mayor Dale Bagley gets his way.
Bagley told the Soldotna Chamber of Commerce on Tuesday that he will propose cutting the boroughwide property tax by at least one-half mill, equivalent to $50 for each $100,000 in assessed value. There also may be tax cuts for borough service areas that provide fire and ambulance, recreation and other services.
Bagley said the boroughwide tax cut is possible largely because in December the borough paid off the last of $10 million in school bond debts dating to the 1980s. The payments on those bonds were about $1 million per year, requiring about 1 mill in property taxes, equivalent to $100 in taxes for each $100,000 in assessed property values.
The tax relief actually began with a half-mill boroughwide tax cut this fiscal year. City residents saw the entire benefit, but residents of areas outside the cities saw a corresponding half-mill increase in the borough Road Service Area tax. Essentially, city residents took the boroughwide tax cut home, while rural residents used it for better road maintenance.
This year, Bagley said, even rural residents should feel the jingle of an extra half-mill in their pockets.
"There may be even more depending on what the service areas come in and what their boards recommend," he said.
Bagley said voters' recent approval of $7.4 million in new bonds to pay for school repairs should not preclude a tax cut. As long as the Legislature appropriates the money, the state is to pick up 70 percent of the cost of repaying the new bonds. Bagley said the borough's payments will be about $250,000 per year, just a quarter of its payments on the earlier bonds. That leaves room for the tax cuts.
Meanwhile, the Road Service Area is rebuilding its savings.
That is not the result of this year's lack of snow, Bagley said. The service area has spent as much money in sanding and scraping icy roads as it generally spends on clearing snow.
However, the recent half-mill hike in service area taxes added $1.2 million to service area revenues, he said. Roughly $500,000 of that went to rebuilding dwindling savings. The remaining $700,000 went for road maintenance and improvements.
The Road Service Area had been drawing down savings by about $150,000 per year, he said, but during last year's big snows, the draw was $400,000. Service area savings had been expected to dwindle to just $67,000. However, the Federal Emergency Management Agency reimbursed $200,000 in costs of clearing last year's heavy snows, and service area spending in some areas fell short of projections. With $500,000 from the tax hike, Bagley said, service area savings now total $900,000. So next year, the additional taxes all will go for road maintenance and improvements.
"Next year, the full $1.2 million will be going to fund different projects," he said. "So, I think you'll see even better service, especially next year. ... If your road service isn't getting better, I do want to hear about it. I think we've been doing a better job this year, and we'll keep trying to improve that service as we get more funds."
Bagley said he also plans to propose an ordinance that would allow the borough to pay up to a quarter of the cost when landowners organize local improvement districts to fund major improvements to subdivision roads, such as adding gravel, installing culverts or paving. He said he envisions budgeting roughly $150,000 from the Road Service Area fund to pay the borough share.
Several subdivisions are considering road improvements but finding the work too expensive, he said.
"By doing the 25 percent match, we're hoping that will make it more in the range of what people can afford to do," he said.
In addition, Bagley said, the borough will work aggressively to clean up borough roads and rights of way.
Borough workers again will pick up trash after the cleanup organized by local chambers of commerce.
"That's the first phase," he said. "In the second phase, we'll work with industry or anyone with guys and trucks to identify cul-de-sacs where trash has been dumped and clean it up. In the third phase, we'll try to get abandoned vehicles out of borough rights of way."
Bagley planned to ask the borough assembly Tuesday night for $75,000 to pay the costs of having abandoned vehicles drained of oil so they can be crushed.
"What we envision right now is that people who want to get rid of junked vehicles in their yards can get rid of up to five. They've got to pay to get them to where we store them. We have three different areas where we're going to let people store them -- Seward, Soldotna and Homer," he said. "To get the crushers out here, you need at least 150 vehicles, and I don't think that's going to be a problem."
If private parties pay the cost of towing junked vehicles to borough disposal sites, the borough will pay the cost of draining the oil and crushing them, he said. The borough also will tow and crush vehicles abandoned on borough rights of way.
"This $75,000 will not go far, but it is a start," he said. "Next year, we can do it again."
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