City Manager
AN ORDINANCE OF THE CITY
COUNCIL OF HOMER, ALASKA APPROVING AND SUBMITTING A ONE ONE HALF OF ONE PERCENT INCREASE IN THE CITY SALES TAX TO THE VOTERS FOR VOTER APPROVAL
AT THE OCTOBER 5, 2004 MUNICIPAL ELECTION. AND PROVIDING FOR A MAXIMUM
PROPERTY TAX RATE IN 2005 OF 4.25 4.50 MILS IF THE SALES TAX INCREASE IS APPROVED BY THE
VOTERS.
WHEREAS, The Homer City Council recently adopted a Long Range Fiscal Plan, and
WHEREAS, During the planning process, the Council recognized that significant General Fund budget increases will be necessary beginning in FY 05 due to inflation, expanding population and infrastructure, rapidly rising insurance and PERS costs, new depreciation funding requirements, and projected capital construction costs and the associated increases in the costs of maintenance and operations, and
WHEREAS, The City Council wishes to be proactive and plan ahead so that it can adequately provide for a basic level of public services and meet the needs and desires of Homer residents, and
WHEREAS, Appendix D of the adopted Long Range Fiscal Plan identified a potential fiscal gap of $1,030,303 in FY 05; an estimate that the Council considered to be conservative, based upon sound assumptions, and focused upon essentials, and
WHEREAS, The City’s General Fund budget must be balanced and the Council recognized that it must either make significant budget reductions, increase revenues, or some combination of both, and
WHEREAS, The Council concluded during the planning process that although some budget reductions are still possible, the demand for the services the City provides is strong, all Department budgets are already very lean, the City could not make substantial reductions without eliminating entire programs, and that increases in revenues will therefore be necessary, and
WHEREAS, The Long Range Fiscal Plan identified nine short term options for raising revenues that the Council considered to be feasible and prudent, and
WHEREAS, Raising the annual sales tax while simultaneously lowering the mil rate is an option that has been identified by the Council as desirable, and
Page Two
Ordinance 04-32(A)
City of Homer
WHEREAS, The advantages of this option include the following:
NOW THEREFORE, the City of Homer Ordains:
Section 1.
The City Council finds that at the present time it is in the best interest of
the City to raise the City Sales Tax rate of levy by ½ of 1 1 percent
from 3.5 to 4.5 percent and to simultaneously lower the property tax mil
rate by .75 .50 mils from 5 mils to 4.25 4.50 mils.
Section 2. Homer City Code Section 9.16.010 is hereby amended to read as follows:
9.16.010 Levied. a. A consumer’s
sales tax in the amount of two three two and one
half percent is levied by the City on all sales, rents, and services
within the City except as the same may be otherwise exempted by law.
b. An additional consumer’s sales tax in the amount of three-quarters percent (3/4%) is hereby levied by the City of Homer on all sales, rents, and services within the City except as the same may otherwise be exempted by law, for the purpose of funding debt retirement of the sewer treatment plant improvements, and to the extent revenues from such tax exceed such debt retirement obligations, for the purpose of funding water and sewer systems.
c. An additional consumer’s sales tax in the amount of
three quarters percent (3/4%) is hereby levied by the City of Homer on all
sales, rents, and services within the City except as the same may be otherwise
exempted by law, for the purpose of funding street reconstruction improvements
and related utilities. . (Ord. 99-14(S), Ord. 91-19 section 1, 1991; Ord. 90-29
sections 1 and 2, 1990; Ord. 87-19 section 1, 1987; Ord. 85-37 section 2,
1985).
Section 3.
For property taxes levied and assessed in calendar year 2005, the property tax
rate of levy set by the City Council under Homer City Code Section 9.04.040
shall not exceed 4.25 4.50 mils.
Page Three
Ordinance 04-32(A)
City of Homer
Section 4. The City Clerk shall submit the following question to the voters at the next regular election to be held on October 5, 2004. The ballot proposition shall read as follows:
PROPOSITION 2
Shall the City of Homer Sales
Tax rate of levy be increased by 1 ½ of one percent (from 3.5% to
4.5%)?
_____ YES NO______
Section 5.
The City Manager and City Clerk are authorized to provide an explanation to the
voters regarding the Council’s finding that the new revenues generated if this
proposition is approved by the voters are needed to provide for construction
and operations costs associated with the new Homer Public Library, maintenance
and operations costs associated with the new animal shelter and new ice rink,
and other priorities identified by the recently adopted Long Range Fiscal Plan.
Section 6. If the ballot proposition set forth in this ordinance is approved by the voters, sections 2 and 3 of this ordinance shall take effect on January 1, 2005. If the proposition is not approved by the voters, sections 2 and 3 of this ordinance will not take effect.
Section 7. If the ballot proposition set forth in this ordinance is approved by the voters, section 2 of this ordinance shall be of a permanent and general character and shall be included in the City Code. The remaining sections of this ordinance are not of a permanent nature and as such, shall not be codified.
PASSED AND ENACTED by the Homer City Council this ____ day of ______, 2004.
Page Four
Ordinance 04-32(A)
City of Homer
Introduction: June 28, 2004
Public Hearing: July 26 and August 9, 2004
Second Reading: August 9, 2004, Reconsidered same meeting.
Effective Date: August 10, 2004
Ayes: 5
Nayes: 1
Abstain: 0
Absent: 0
Reviewed and approved as to form and content:
Walt Wrede, City Manager Gordon Tans, City Attorney
Date: Date:
Fiscal Note: A projected net
revenue increase of $470,000.00 $645,494.