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1999-08-16 Special MeetingKODIAK ISLAND BOROUGH Special Assembly Meeting August 16, 1999 A special meeting of the Kodiak Island Borough Assembly was held August 16, 1999 in the Borough Conference Room of the Kodiak Island Borough Building, 710 Mill Bay Road. The meeting was called to order at 7:40 p.m. There were present: ROLL CALL Mayor: Gary L. Stevens, presiding Assemblymembers: Tom Abell Scott Arndt Tuck Bonney Pat Branson Robin Heinrichs Greg Spalinger Wayne Stevens comprising a quorum of the Assembly; and Linda Freed, Interim Manager Judi Nielsen, CMC, Clerk Patti Kirkpatrick, Deputy Clerk Chris Lynch, Engineering /Facilities Director APPROVAL OF AGENDA HEINRICHS, moved to approve the seconded by ABELL agenda. VOTE ON MOTION TO APPROVE MOTION CARRIED Unanimous voice vote NEW BUSINESS Mayor Stevens said the special meeting would allow the assembly to introduce the KATS ordinances to public hearings on September 2, 1999. Assemblymember Arndt inquired of the necessary steps to repeal and reenact the tax cap ordinance. Clerk Special Assembly Meeting August 16, 1999 SPECIAL MEETING APPROVAL OF AGENDA NEW BUSINESS Volume XXV Page 175 Nielsen clarified that the tax cap could not be repealed or reenacted prior to the end of the two year period. Mayor Stevens directed staff to seek an attorney's opinion. A. ORDINANCES FOR INTRODUCTION 1. Ordinance No. 99 -07 Presented for consideration was Ordinance No. 99 -07 that, if passed by the voters, would establish the Kodiak Area Transit System (KATS) Service Area. BRANSON, seconded by HEINRICHS moved to advance Ordinance No. 99 -07 in first reading to public hearing on September 2, 1999. Manager Freed said the ordinance was drafted in anticipation that the KATS petition would be insufficient. In response to Assemblymember Heinrichs, Mayor Stevens explained that it was better to decide on one or the other, but not both as it would split the public's vote and could defeat the measure. Manager Freed urged the Assembly to advance both ordinances so they could get community comments on both issues prior to deciding which one to place on the ballot. Assemblymember Bonney opposed property tax and favored advancing one ordinance to public hearing. Assemblymember Stevens wanted community input and to then decide which measure to place on the ballot. Assemblymember Branson concurred. She wanted to hear from the community and have time to review their comments prior to deciding on which question would be placed on the ballot. Special Assembly Meeting August 16, 1999 ORDINANCES FOR INTRODUCTION ORDINANCE NO. 99 -07 Volume XXV Page 176 Assemblymember Bonney was tired of property owners carry the brunt of the tax burden. He hoped the property tax ordinance failed and the sales tax advanced to first reading. Assemblymember Arndt opposed increasing property tax. Assemblymember Spalinger opposed increasing property tax as many small businesses in Kodiak would be hurt. Assemblymember Branson did not want the Assembly to favor one or the other ordinance without hearing public comments on both. Manager Freed noted the attorney's opinion made two relevant points: 1) if the Assembly pursues a sales tax then the Borough would need to adopt transportation powers; 2) the attorney identified that in Kodiak a service area could be funded by a tax levy within that service area. It would put two questions on the ballot, one to create a service area, and one to levy a sales tax within that service area. She urged the Assembly to read the attorney's opinion prior to voting on the issues. Assemblymember Bonney said a seasonal sales tax from July 1 to September 30 would provide funds to support KATS and to pay administrative costs. He said the villages, Chiniak, and Pasagshak would be excluded from the sales tax; however, the outlying lodges would charge the sales tax which mirrored the city's sales tax. He noted KATS was costing taxpayers approximately $15- 30,000 a year in interest. He wanted KATS to come before the voters anytime they needed additional funding. He thought that would keep KATS within their budget and provide a firm check and balance system. He hoped a sales tax would keep the mill rate from having to be raised and allow the funds received from the mill rate to be applied towards mandated services, i.e. roads, maintenance, and education. In response to Assemblymember Abell, Clerk Nielsen said that should Ordinance No. 99 -07 be placed on the ballot, then the petitioner would need to file with Special Assembly Meeting August 16, 1999 Volume XXV Page 177 APOC on September 3. She clarified that the Assembly could not dedicate funds. Assemblymember Abell noted the Assembly raised property taxes and then the voters approved a tax cap. He urged the Assembly to heed the taxpayers. Assemblymember Heinrichs noted that funds would be dedicated if a service area was created. Assemblymember Abell agreed; however, he noted that when KATS was originally brought before the Assembly it was suppose to last eighteen months. He never intended for the community to pay for those services. Assemblymember Arndt noted KATS had failed to support itself and he cited empty buses despite reports that ridership was up. He felt the transit service was too large for the community. He thought KATS should look at how they were doing business before asking for additional funds. Assemblymember Branson said the system could be modified at any time. She noted that whether or not the buses were empty, there was documentation that ridership was up 57 %. She felt that capping the amount of funds at $150,000 would force them to look at the service being provided and make changes. VOTE ON MOTION TO ADVANCE Ayes: Branson, Heinrichs, Stevens Noes: Abell, Arndt, Bonney, Spalinger MOTION FAILED 3 Ayes, 4 Noes 2. Ordinance No. 99 -08 Presented for ORDINANCE consideration was Ordinance No. 99 -08 that, NO. 99 -08 if passed by the voters, would allow the Kodiak Island Borough to levy and collect a consumer's sales tax not exceeding one per cent (1 %) of the sales price on all retail Special Assembly Meeting August 16, 1999 Volume XXV Page 178 sales, on all rents, and on all services made within the confines of the Kodiak Island Borough and the revenues derived therefrom may be used for the Kodiak Area Transit System (KATS) Operations. BONNEY, seconded by HEINRICHS moved to advance Ordinance No. 99 -08 in first reading to public hearing on September 2, 1999. Assemblymember Bonney did not support KATS; however, due to the number of citizens who signed the petition he felt he was obligated to pursue a fair tax for the community. Assemblymember Heinrichs favored consolidating the two ordinances to create a service area in which the Assembly would levy a sales tax which would be dedicated to that service area. Assemblymember Bonney agreed stating it would be clear what the funds would be used for. Assemblymember Arndt opposed creating a service area. He noted that service areas were designed to meet the specific needs of a small area, not one as large as the one proposed by KATS. He opposed raising taxes whether property or sales. Assemblymember Abell noted the Assembly would not be raising taxes by placing the question on the ballot, that it would be up to the vote of the people. He did not agree with a sales tax but felt it was a way to see if the community supported KATS. Mayor Stevens said it was important to hear from the public and they could adopt any changes at the next meeting. Assemblymember Stevens felt obligated to place the question on the ballot in lieu of the 500 signatures received. He encouraged the Assembly to research combining the sales tax and creating a service area. Special Assembly Meeting August 16, 1999 Volume XXV Page 179 Assemblymember Spalinger opposed raising taxes; however, he favored advancing the ordinance to public hearing to hear from the community. Assemblymember Branson urged the Assembly to advance the ordinance to first reading and to let the community vote on the issue. VOTE ON MOTION TO ADVANCE Ayes: Noes: Arndt Bonney, Branson, Heinrichs, Spalinger, Stevens, Abell MOTION PASSED 6 Ayes, 1 No There being no further business to come before the ADJOURNMENT Assembly, the meeting adjourned at 8:35 p.m. ATTEST: diff.e—AU i orough Clerk dith A. Niel , CMC Special Assembly Meeting August 16, 1999 G ry L. Leven M:yor Approved: 09/02/99 Volume XXV Page 180