Nome Council introduces two-mill property tax hike
The Nome Common Council approached the end of a 30-step calendar on 2020 budget planning at its meeting May 30.
The panel of six voted into first reading a general fund budget based on 13 mills, a two-mill property tax increase, and passed a resolution to contribute $3 million to the public schools 2020 budget.
A two-mill increase adds $2 per $1,000 of assessed value of a property. The tax bill on property assessed at $100,000 would go up by $200. Upcoming property tax collection will increase to $4,298,240, an increase of about 20 percent or $797,553, according to projections. Some of that will go toward school education with the balance slated for public safety and road maintenance.
The Council will hold a public hearing at their June 10 meeting before voting on second reading and final passage. The Council will have another opportunity at the meeting to amend the budget proposals.
The package contains the operating budget for the general fund, the debt service fund, the special revenue fund, the capital projects fund, the construction capital projects fund and two enterprise funds—operating budget for Port of Nome and the Port of Nome capital projects fund.
At a work session May 6, the Council instructed the City administration to prepare the City’s 2020 general fund budget with a $3 million contribution to the Nome Beltz Jr./Sr. High School budget for FY 2020.
The Council made cuts to the general fund budget requests to keep under a $1.5 million dip into the City’s savings account to balance the spending plan.
A deficit of $1.383,039 is projected, according to Julie Liew, finance director.
In preparing the budget, the City combed over budgets from FY 2015 through FY 2019 to make “realistic and conservative,” according to a memo to mayor and Council members from Liew, plus information about local and economic trends.
Based on data, the total projection for the FY 2020 general fund is $14,185, 322, an increase of 938,044, or 7 percent over last year.
Even though the state legislature is in overtime and there could be budget revisions at the state level, local budgets take into account the state cuts to school funding, potential closure of the Nome Youth Facility and zero funding for the school debt reimbursement program.
According to the Alaska Constitution, the state must maintain a system of public schools. The legislature has adopted laws mandating a share of responsibility go to municipalities with taxing authority. The Nome School Board requested municipal funds in the amount of $1,114,206 to satisfy the state mandate plus an additional City of Nome contribution. Following six work sessions on the City and schools budget, the Council decided to add $1,885,794 to bring the contribution up to $3 million.
The City’s administration and Council in drawing up the budget had to consider both projected revenue increases and decreases. Liew shepherded the Council through the process with memos on the Council meeting table and in meeting packets throughout the budget discussions and work sessions.
Again, based on analysis of past years and budgets, as well as news from the Legislature and lobbyist reports, the memo issued May 30 showed highlights and dimmer prospects of the FY 2020 spending plan.
Overall revenue is projected at $12,802,283, an increase of 10 percent over FY 2019. Overall expenditure is projected to increase by $681,987, or five per cent over FY 2019. Utilities to run the City are projected to increase due to higher oil prices. Snow removal is projected to increase from $90,000 to $120,000.
As regards the Port of Nome fund, tariff rates remain unchanged from FY 2019. Overall revenue is projected at $1,735,555, an increase of $115,350 or seven percent from FY 2019. Overall expenditure before depreciation is projected at $1,715,196, a decrease of 50,773, or three percent from FY2019. The budget shows a projected operating surplus of $23,359.
In other business, during citizen comment period people with dissatisfaction concerning the City’s building inspector and building permit services took the podium again to seek resolution of issues with their projects. Colby Engstrom, who is attempting to convert the former Twin Dragon Restaurant building to a public laundry, stated that he had put his financial resources into the rehab of the fire-damaged building, but had received and performed to conflicting requirements from the department. He charged the City with being unresponsive to his predicament. Engstrom received seed money—$50,000— from a Norton Sound Economic Development Corp. small business program for his laundry project. The two-year deadline for him to finish his project or return the money was approaching in October, Engstrom told the Council.
Acting City Manager John Handeland told Engstrom he would have to get an attorney and sue the City. Engstrom replied to the effect that he had hoped to avoid going that route. Handeland said Tuesday that City administration had a plan to meet with Engstrom on June 6 to see if there could be some resolution.
“I have been one of his biggest supporters for his project all along and want to see him succeed,” Handeland said. “We will try to figure out a path.”
Jessica and Howard “Chugie” Farley went to the podium again this meeting to ask for a refund of money spent for building permits they obtained to remodel a house. They had followed building inspector’s requirements, but then had been given differing requirements after conclusion of the project.
Handeland said in a consultation with Brooks Chandler, the City’s attorney, he had been told the City had no obligation to refund the Farleys’ permit fees.
For people rehabbing structures to start new businesses, the City should work with them to be able to comply and move forward, rather than move backward, Council Mark Johnson commented.
“We want new business,” Mayor Richard Beneville commented later in the meeting. “When they are stymied by bureaucracy, they are frustrated. It hurts the town.”
The City has hired David Barron to perform building inspector services as an employee, rather than as a contractor. Handeland expects the department to run more smoothly.
The Council unanimously passed a resolution setting June 29 as Lemonade Day Nome.
A bid awarded to Q Trucking for providing 3,000 tones of aggregate for the City’s roads will be held in abeyance pending negotiation over the proper ratio of fines to gravel, following advice from Councilman Doug Johnson that the ration in the specs would not efficiently accommodate the application of calcium chloride for dust control. Q Trucking bid $56,250; Board of Trade, Inc, bid $69,420.
In a final deed before voting to go into an executive session, the Council approved Mayor Richard Beneville’s selection of Mathew Michels and Carol Piscoya to fill a couple of vacant seats on the Nome Planning Commission. Ralph Ray and Gregory Smith also applied to serve.
The stated purpose of the executive session was personnel, pertaining discussion on the details of hiring a new city manager. Two local candidates who have submitted applications are Kenneth Hughes, president of Nome Planning Commission, and John K. Handeland, NJUS utilities manager and acting city manager.