Memorandum 16-066 Revenue Discussions

Memorandum 16-066

TO:                       Honorable Mayor Wythe and Homer City Council

FROM:                 Katie Koester, City Manager

DATE:                  April 13, 2016

SUBJECT:         April 18, 2016 Revenue Worksession

Council has dedicated one worksession a month to finding revenue solutions for the City of Homer. This memo outlines the goals and questions Council articulated at the last worksession:

GOALS:

No sacred cows: everything is on the table
Timeframe (see attached calendar)
List of things Council can do without voter approval

Increase property taxes (though HCC 9.16.020 states that the mill rate cannot exceed 6 without the abolishment of sales tax, the Council could amend that by ordinance). 1 mill equals approximately $660,000.
Eliminate the property tax exemption for primary residence, currently first $20,000. This is $94,000 in missed revenue.
Increase code violations and fees for service. The City has little room to do this with great impact. Furthermore, during the 2016 budget cycle fines and fees were increased in camping, animal control, and ambulance billing.

How to approach the Kenai Peninsula Borough?

The Borough Administration is working on a list of items to present to the Assembly for reviewing the tax code. Some of these could have a positive impact and the City should consider weighing in by resolution, in addition to networking with our assembly representatives and Borough Mayor. I will share the list with Council as soon as I receive it, I am anticipating in the next few weeks.

How to approach City residents

Understand their pain. The state is struggling, the City needs funding to survive – we must remain cognizant of these pressures on pocketbooks.
Come up with a plan and coalesce around a common message. What will increased (and possible decreased) taxes look like. This is one of the reasons the suspend HART campaign was so successful- everyone was on the same page and singing the same tune.
Direct outreach. This could take the form of attending membership and board meetings of various organizations around town (see attached spreadsheet). Keep in mind that many of these organizations have their speakers lined out many months in advance, if they even have speakers, and it may be difficult to get on an agenda. Another approach Councilmember Smith has suggested is bringing the conversation to residents through neighborhood meetings. For example, a councilmember could ask a friend to organize a small coffee or tea in their home and attend to explain the revenue plan and answer questions.

Enc:

Calendar for next 3 months

Spreadsheet of area member organizations and meeting schedule

Sales and property tax rates for the Peninsula

Fund balance spreadsheet

Memo from  Attorney Klinkner RE: Dedication of sales tax to fund HART