Arctic Winter Games funding to be divided among repair, upgrade projects

Posted: Thursday, November 18, 2004

Four venues expected to host Arctic Winter Games events in March 2006 will get much-needed repairs and upgrades, thanks to a substantial federal grant accepted and appropriated by the Kenai Peninsula Borough Assembly at its meeting Tuesday night.

Ordinance 2004-19-24 authorized spending the $745,575 U.S. Department of Housing and Urban Development grant secured by Sen. Ted Stevens and will spread those funds among four projects.

Homer's yet-to-be-built ice rink will get $397,640 of the grant to pay for an icing system and dasher boards. Homer will be the site of the curling competition.

Another $149,115 will cover the costs of snowmachines, groomers, signs, timing systems and trail lighting for the Tsalteshi Trails system in Soldotna.

The Soldotna Sports Center will get new scoreboards and a marquee with their $99,410 share, while a similar amount has been set aside to pay for sporting gear and other equipment for athletes boroughwide.

Improvements to the ice rink in Kenai, once part of the grant proposal, have been eliminated from the distribution, but will be funded through other revenues sources, according to borough grants manager Bonnie Golden.

Arctic Winter Games Manager Loren Smith told the assembly that efforts continue apace toward the March 2006 event, including the opening of a store, The Raven's Roost, at the Peninsula Center Mall in Soldotna. A grand opening is planned for Nov. 27. He also announced that software that will register games' volunteers and participants should be up and running by next week.

The AWG Host Society recently announced major cash and in-kind contribution commitments totaling $590,000, bringing the total raised to more than $2.2 million.

The assembly spent the bulk of the meeting hearing public testimony and discussing Ordinance 2004-36, a measure that would have upped the borough's sales tax cap. Currently, consumers pay sales tax on the first $500 of a purchase, which limits the revenue stream to the borough. It has not changed since the 1960s. The ordinance proposed to push that cap to $1,000.

Virtually everyone who testified Tuesday night opposed the proposal, arguing it would drive customers to Anchorage, which has no sales tax, especially those considering large-ticket items like appliances. Dave Phegley, owner of Jensen's Appliance Center in Soldotna, said his business was a case in point.

"Just about all we sell is a big-ticket item. Everything is over $500," he said. "A $1,000 sale lost is $200 out of my pocket. I don't know if any of you can afford to pull $200 out of your pocket, but I can't."

Phegley said he knows that customers go to Anchorage "all the time" to avoid the sales tax, and urged the assembly not to raise the cap.

Homer resident Merlin Cordes, a former hotelier, took a different tack, noting the current sales tax law provided huge loopholes for charter aircraft and charter fishing operations by not requiring per-day, per-rider sales tax payments, but rather permitting charter trips involving groups of anglers over multiple days to pay one bill that included only the minimal tax.

A portion of the ordinance would apply sales taxes for hotel stays to each night's stay. That is, each night would be considered a separate transaction. Cordes said the same should apply to air and boat charters.

"According to a 2001 borough sales tax study, this sales tax loophole allowed nearly $390,321 discount to the tourists who drive off the peninsula," he said.

At that rate, he added, the borough would have lost $5.9 million. Borough cities also would have lost, he said.

"We are missing the boat here," he said.

Cordes urged the assembly to amend the proposed ordinance to consider each day's rental for an individual on a charter boat to be a separate transaction.

After nearly an hour of testimony, the assembly discussed the issue but could arrive at no consensus either to adopt or reject the measure.

Assembly member Dan Chay of Kenai moved to postpone action on the ordinance until March, when the borough will be into its next budget-writing cycle. The assembly agreed.

In the meantime, Chay will act as facilitator for public forums to be held between now and then at which he hopes to hear from borough residents on the sales tax issue. The forums, still to be scheduled, also would provide the borough the opportunity to explain publicly the budget realities currently facing the assembly, such as the effect of the rising cost of personnel health insurance and retirement programs, and the loss of municipal revenue sharing dollars from the state, he said.

The ordinance will be addressed again at the March 1 meeting.

In other business, the assembly:

Adopted Ordinance 2004-19-14, appropriating supplemental funding of $13,618 to cover septic system repairs and workers compensation insurance costs in the Nikiski Senior Service Area;

Defeated Ordinance 2004-19-15, providing funds for a three-quarter-time senior clerk typist for the Coastal Management Program;

Adopted Ordinance 2004-19-16, appropriating a $10,000 state grant for a flashing warning light for the Funny River Emergency Services facility;

Adopted Ordinance 2004-19-17, appropriating a state grant of $7,000 for a sign at the Nikiski North Star Elementary School;

Adopted Ordinance 2004-19-18, appropriating a state grant of $10,000 for distance-learning equipment for the South Peninsula Hospital Service Area;

Adopted Ordinance 2004-19-19, appropriating a state grant of $70,000 for purchase of a tanker truck for the Anchor Point Fire and Emergency Medical Service Area;

Adopted Ordinance 2004-19-21, appropriating $275,000 to purchase heavy equipment for the Central Peninsula Landfill;

Postponed until March 1, Ordinance 2004-35, requiring fiscal notes to accompany future ordinance proposals.

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