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Memorandum 16-079 Revenues for 2016
Memorandum ID:
16-079
Memorandum Status:
Information Only
Related Meetings
Details
Memorandum 16-079
TO: Honorable Mayor Wythe and Homer City Council
FROM: Katie Koester, City Manager
DATE: May 11, 2016
SUBJECT: May 16, 2016 Revenue Work session
The purpose of this memo is to inform the Council’s conversation on potential revenue options for funding a bond for the public safety building and ongoing operational costs at the City of Homer once the suspension of HART ends in 2019.
Timeline
The timeline is tight for a tax increase to make in through the public process before the October election and needs to be put on the next Council meeting agenda.
May 23rd: Last date to introduce a property tax increase for 2016
June 13: Last date to introduce a ballot proposition to increase sales tax and question for the regular election in October 2016.
Follow-up from the last meeting
What is the history of the Permanent Fund? See attached chart.
Can you tie a bond question to a tax increase on the ballot (2 questions in one)? Yes. Attorney Klinkner proposed several ways to approach this. The City could tie a tax increase to repayment of the bond. Any and all proceeds from that would go to pay off the bond (for example, if a sales tax increase passed and sales were strong, it would get paid off early). If the Council wanted to dedicate the increase to bond payments but have the ability to spend any excess of the annual payment on general government, the question would need to specify that.
Was the 6 mill limit on property tax in HCC 9.16.010 implemented by voters? Yes. An election in 1985 set the sales tax at 2% and mandated that the sales tax would go away if the property tax exceeded 6 mills.
When do we start paying back the PS building bond? 6 months after date of issuance.
When was the last time we decreased property taxes? A 1 mil reduction was done in December 2004, effective for 2005. On March 22, 2005 at a special election the voters approved a 1% sales tax increase.
The revenue needs spreadsheet I prepared for the last meeting has multiple of assumptions making it difficult to predict what future actual needs will be. Council ended the last work session working towards filling a $1.7 million gap in operating costs in 2019 and $759,000 annual bond payment for the public safety building, which equals a total need of $2.5 million.
Enc:
Permanent Fund History
Property tax draft resolution
Ordinance 04-30, voter approval for authorizing financing the Homer Public Library
Memo to Public Safety Building Review Committee on financing options for Fire Hall improvements
Chart on potential revenue options (updated)