Council votes to keep city sales tax

Posted: Monday, September 09, 2002

The city of Kenai isn't taking any chances when it comes to the Kenai Peninsula Borough ballot initiative to exempt nonprepared food items from sales taxes. Council members voted unanimously Wednesday to pass an ordinance that will allow the city to continue to collect its sales tax, even if the initiative is passed in the upcoming election.

Kenai has the authority to do this because it is a home-rule city. If the initiative is voted in, the borough's 2 percent sales tax would no longer be levied on nonprepared foods, but the city's 3 percent tax still would, due to the ordinance the council passed. If the city did not collect that sales tax, it would lose an estimated $1 million in revenue.

Council members have voiced their discontent at the thought of losing that revenue. Mayor John Williams has stated the million-dollar loss would work out to a 3 mill increase in the property tax. The council is not in favor of levying that tax.

"Quite frankly, I am not interested in burdening the taxpayers in either (city budget) debt or more red ink or 3 more mills of property tax to make up for that shortfall," said council member Duane Bannock.

"I voted against a half mill increase (in the 2002-03 budget sessions), so I certainly wouldn't be in favor of 3. For me to decide we could just whack a million out of our budget would be incredibly irresponsible."

Before the vote was taken at the Wednesday meeting, the council heard comments on the issue from Kenai resident Blaine Gillman.

"I commend the city for coming forward with this ordinance," he said. "This ordinance basically will give the city the ability to see if their constituents really want this thing. ... I applaud you for doing this ordinance, I think it's the right thing to do. (Although) I think you may get some political flack on it."

Bannock spoke out against the borough initiative in the meeting, saying he disagreed with it on the grounds that it challenges local control.

"I take serious offense to a group outside our home-rule municipality attempting to establish what our local tax rates will or will not be," he said.

"The people in the city of Kenai are who should be asked. I am not interested in what people in the rest of the borough have to say about what we do and do not tax."

James Price, chair of Peninsula Citizens Against the Grocery Tax, took issue with the comments Bannock made.

"He said this is from a group outside the city," Price said.

"(But) we had approximately 1,000 signatures from people who resided in the city of Kenai. I don't understand how Duane would say that this is from people who are outside. While I do reside in Nikiski, many who signed the initiative were from the city of Kenai. Most of the signatures were collected during the Fourth of July parade and at establishments within the city of Kenai."

Bannock responded that he did not know how many signatures the initiative backers collected or where they got them from, but he did question some of the methods used in gathering the signatures.

"If you ask someone if you want your taxes to go up or down, I think that's terribly misleading," Bannock said.

"It's along the lines of 'if you ask a stupid question, you get a stupid answer.' I think that is incredibly irresponsible to ask that question, and I know for a fact they asked that at the petition gathering."

Price also did not agree with the council passing its ordinance. The council disregarding the initiative before people had a chance to vote on it is against the spirit of the law, if not the letter of the law, he said.

"When the council votes to disregard the initiative, I think that the only reason they are doing that at this early juncture is to influence the vote, and that is a very improper action by the city of Kenai," Price said.

"They know that they're not supposed to try to influence the initiative vote. They're supposed to remain neutral."

According to Carey Graves, the city attorney, the council can choose to reevaluate its decision after the election, if it so chooses.

"If people were to vote overwhelming in favor of this, is that a statement that they want the city's rate to go down as well as the borough's?" Bannock said.

"If that were to happen, obviously we would have to reevaluate (our) position, but I'm going to hope that people say (through the vote) very loud and clear, 'No, leave our taxation alone and let us decide what our taxation rate should be.'"

In other action Wednesday, the council:

Voted 5-1, with council member Joe Moore's absent, in favor of an ordinance appropriating $3,000 in the Airport Special Revenue Fund for airport advertising. The money will be used to pay for an ad placed in "The Milepost" publication which will promote the airport and the city of Kenai.

Council member Jim Bookey voted against the ordinance. In past council discussions on the subject, Bookey said he didn't think the publication was an appropriate place to advertise the airport, as it is mainly geared toward drivers.

Voted unanimously to pass an ordinance increasing estimated revenues and appropriation by $6,250 in the city's general fund for a library grant from the state. The grant money will be used to buy books for the library.

Voted unanimously to pass an ordinance increasing estimated revenues and appropriations by $2,370 in the general fund to buy a microfilm reader and printer for the library. The money was donated by the Friends of the Library group.

Voted 5-1 to amend the city code to provide for the limited use of recreational vehicle in recreation zones. Previously, the code allowed recreational vehicles to be utilized as living quarters or sleeping accommodations for a maximum of 30 days on private property. The new ordinance passed allows two RVs per lot to be used as living quarters in areas zoned recreational from May 1 to Sept. 1 without requiring a conditional-use permit from the Planing and Zoning Commission.

There was some concern brought up by council member Pat Porter that the change might allow bed and breakfast owners to rent out RVs on their property. It was explained that those operations are subject to other considerations and regulations, so it is not likely to happen. Council member Linda Swarner voted against the ordinance, while the others voted for it.

Voted unanimously to pass an ordinance changing the zoning of a portion of Lot 1, Yragui Sub-division, off Candlelight Street, from suburban residential to general commercial.

Unanimously passed a resolution awarding a $79,788.90 bid for an airport dump truck to Hutchings Chevrolet Cadillac Inc.

Unanimously passed a resolution awarding a $19,759.20 bid to North Star Paving and Construction for a paving job at the waste water treatment plant.

Unanimously passed a resolution supporting an amendment to the Kenai Peninsula Borough code clarifying emergency communications authority and revising membership on the E-911 board. In the past, all 911 calls were answered first by a borough dispatcher, who got the information and location and routed it to a dispatcher in the appropriate city and station.

With new technology in the 911 system, calls are automatically routed to the appropriate station without a borough dispatcher answering first. The resolution passed by the council simply supported this change to the 911 system.

Unanimously passed a resolution awarding a janitorial contract for the Kenai Municipal Airport to Marcie's Janitorial for Sept. 5 through June 30, 2003.

Scheduled a board of adjustment hearing for Oct. 16 for a Planning and Zoning Commission denial of an application for a conditional-use permit for a retail business to operate a pet grooming business at 1802 Fourth Ave. in the Spruce Grove Subdivision.

The next council meeting will be Sept. 18 at 7 p.m. at Kenai City Hall.

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