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06/24/1968KWDIAK Id AND BO UdH 4 1 1 SPECIAL PUBLIC HEARING - June 24, 1968 I CALL TO ORDER The meeting was called to order at 7:30 p.m. by the Presiding Officer, Jo Hajdu in the Courtroom, Donnelley Building, Kodiak, Alaska. II ROLL CALL Roll call was dispensed, and Mrs. Hajdu introduced the nesnbers of the Borough Assembly and the members of the School Board. Present were as follows: Sam Best, Chairman; Jo Hajdu, Presiding Officer; Jim Barr and Don Arndt. Absent were Mrs. Betty Springhill and Don Bullock. School Board members present were as follows: Ivor Schott, Supt.; Carl Rodli, Eanil Norton, Marion Johnson and Beverly Horn. Also present: Douglas Preston, Clerk/Treasurer; Jim Stansbury, Building Inspector; Pete Deveau, Mayor; Dr. Bob Johnson; John Welch; Edith Longmire; Roy Madsen, Borough Attorney; Representative Chuck Powell; Senator Bill Poland; At. Summers, Assistant City Engineer; Ruth Croney taking minutes and approximately 110 people in the audience. IV PUBLIC HEARING OF SCHOOL AND BOROUGH BUDGET Mrs. Hajdu read the introduction of the meeting listing the order in which each item will be discussed, and expressed that all people concerned try to hold to the items as listed: 1, Borough Budget; 2, School Budget; 3, Proper type of Tax; 4, Sales Tax Ordinance provisions; 5, Other audience comments. A. BOROUGH BUDGET. firs. Hajdu stated that the largest increase in the Borough budget was due to the increase in the School budget. Mr. Rodli explained the reason for this. It was necessary for the School Board to undertake the upgrading in the areas of the Village Schools and the raise in the teachers pay this year. He said that with the Vocation]. School in Kodiak, it takes more to operate than the usual schools. It was explained by Mrs. Hajdu that copies of the Preliminary Borough budget were in the Courtroom for the audiences review and pointed out that the Assembly members have not discussed or reviewed the budget as of this time. There were no other comments on the Borough budget. B. SCHOOL BUDGET. Mr. George Hajdu asked what the overall Village School monetary increase was this year compared to that of last years budget. Mr. Gregory was kind enough to give this information. He said the increase was $105,117.00 over the previous year, about a 50% increase, of which a large amount of this is for mainte- nance in the Village Schools which had been neglected in the prior years. Mr. Norman asked what the projected increase through the next years will be, and if the increases will continue to grow. Mrs. Hajdu answered this by saying that as long as the people continue to demand facilities in this community, the increase will continue to grow. Mr. Norman also asked if there would be an additional sales tax later on and if there is any way to put a limit on this increase. Hr. Best stated that the Borough is limited to 3% sales tax, and the proposed draft Ordinance does have a $500.00 limit,' and does not apply to real property, ownly personal property. Mr. Tam Sweeney asked if this would be an ever ending tax. Mts. Hajdu stated that it is highly unlikely that the sales tax would be a one year item. She feels that with the growing of the Community and its needs, more money will be needed. However, she personally feels that the sales tax had the added advantage of being a little nibble every day, rather than having to same up with a large amount twice a year. Mr. Guy Powell asked if last years budget was adequately funded. Mrs. Hajdu stated she felt it was be- cause the School Board is showing a surplus of $37,000.00 to start off this years budget. Mr. Rodli explained that the School Board had to cut expenses in some area because the anticipated revenue was not as great as they had forseen, and in a sense, since they did not come up with a deficit, the budget was adequate. However, he stated that some of the expenses that should have been put on last years budget, will have to carried over to this years. Mr. Guy Powell asked for the explanation of the item on line 12 of the budget. Mr. Schott said that in regards to that item, there have been twelve new positions and an increase in teachers pay. He said these are the largest items in the increase. The added positions include, Guidance to High School, Vice Principal, one shop teacher, one commercial teacher, a Social Science teacher, English teacher, Health Nurse, Vocational Director, one 7th grade teacher, Speech Therapist, and a teachers aid for one of the large village schools. The 32% increase was listed by Mr. Schott as follows: One of the school's personnel who was working partly for the office, but was engaged mostly to class roam duties, has now been put on the Office Staff full tine, an increase in the Superintendent's salary, school board expenses, travel time, clerical work, operation of plants, and fixed charges, student body activities, and Community Services. Mr. Schott explained the Capital Outlay by stating that it could be handled two.ways, either vote more bon& or the School Board could work it out piecely each year on the school's budget. K BOROUdH 4 1 SPECIAL PUBLIC HEARING - June 24, 1968 2 The School Board has allowed in this budget adequately enough to pay for the Larson Bay Schools improvements. It was explained by rir. Schott in answer to Representative Pawell's question that the School Board has never had a contingency fund. The surplus is the amount that is left in the total revenues anticipated after expenses have bee. cleared. Mts. Pat Stoway asked the Assembly if the money collected by the Borough inside the City limits is the same as that of the Cities. Mts. Hajdu explained that the money collected by the Borough goes into the same fund, however, money that is collected by the Borough for the City, is returned to the City. C. PROPER TYPE OF TAX. Mm. Owens asked the Assembly who had the right to vote. Mrs. Hajdu explained that every one whether property owners or not has the right to vote.. Senator Poland said that there were several things that disturbed him in regards to the sales tax. He felt that the tax election should be put off to give the people time to study it to determine how to handle this situation. He felt he was confused as to whether it is a permanent or atemperary Senator Poland also feels that the basic problem is whether or not there is something wrong with our government, be it City, Borough, State, or School system, and said that until this is corrected it is hard to know which direction to go. He further stated that rather to go into an end- less sales tax, he would like to see it defeated or the election upheld, and if a tax increase is needed, he would personally_ would like to see a property tax for one year and in the meantime come up with another solution. He stated that he felt the need of a merger between the City, Borough and the School budgets. Chairman Best said as far as any consolidation, he feels the only reasc*'a."Chafter•Carelseion has-not set up as yet is because every one is waiting to see what Juneau does in this matter, since they are in the process of merging. Pits. Hajdu explained to the Senator that the reason there is no Sales Tax Ordinance is because the people have not yet voted: and given the Borough the authority to do this. If the vote for the sales tax is passed, then the Ordinance will be drawn up by the Borough Attorney, it will then be reviewed by the Assembly, be read twice, advertised, and then a Public Hearing is held. The Ordinance will then be modified to reflect the wishes and desires of the Community. Mr. Guy Powell asked Mrs. Hajdu if the Kodiak Island Borough people are over taxed in caparison with other Boroughs of the State. Mr. Barr gave sane g4gures based on 1967 taxes throughout the state. North Star and Fairbanks, 14 mil and 2% sales tax; Juneau, 12 mils and 2% sales tax; Sitka, 14 mils and 2$ Bales tax; Kenai, 7 mils and 3% sales tax; Anchorage, 12.5 mils and no sales tax; Gateway Ketchikan, 8.0 mils and 1.5% sales tax; Bristol Bay, 9 mils and no sales tax; and Kodiak, 3.3 mils and no sales tax. Mr. Franklin made the statement that even though the mil rate is only 3 now, it will certainly be in line with the other Boroughs with the present budget. Mr. Barr stated that with the budget as presented, if it is done entirely with property taxes, will be 7.3 mils which still leaves Kodiak with the lowest mil rate in the State. Mr. Franklin said that it seems to be the general opinion that there is two alternatives, sales tax or property tax increase. He suggested another alternative, namely that the budget as presented could not be afforded. Mr. Branson wanted to know the expenditure per pupil in the Kodiak School system. Mr. Carl Rod1i stated that he had done some checking in regards to this, and the comparisons that he has are as follows: Valdez, $300.00; Anchorage about $500.00, and Kodiak with the proposed budget is $178.00. Senator Poland said that he was concerned about the overall picture of the sales tax and asked Mr. Best to give him the total amount of taxes that the citizens are going to be faced with. Chairman Best stated that if the sales tax passes, there would be about 21 mils. Mr. Geroge Hooper asked what the advantages would be for him as a property owner to vote for the tax. Mr. Begnexplained to him that at the present rate a property owner is paying $33.00 pernthousand dollars, and �'f sales tax does not pass, the property owner will be paying about $73.00 permthousand, a difference of $40.0( Mrs. Hajdu said that another advantage would be that a person could pay small sums rather than two large amounts per year. Mr...Schott stated that the State will make up r: sane of the money that was lost because of the Federal cut back, to the extent that if the foundation program has to be bonded, then the State will make up one fourth, of that loss to the local support. D. SALES TAX ORDINANCE PROVISIONS. Mrs,. Hajdu stated that the opinion of the Tax Appraisers Manual is that for taxes to be fair, equitable and born equally, all three types of taxes are needed. She felt that the Borough needed a tax on real property, personal property and sales tax to insure that every segment of the Community is bearing its share of the tax burden. Mr. George Hajdu expressed that if the sales tax does pass, he would like to see such items as medicine, etc. exempted. Mrs• Hajdu stated that under the present proposed Ordinance, these items are exempted. Mr. Deveau asked the Assembly why the property at Karluk is not sold. Mr. Best said that to complete the sale of this property would take at least a year before any proceeds would be coming into the Borough. It would be a good solution, but it • could not be implemented in time for this years budget said Mr. Best. Mr. Barr feat that it is unwise to take something tangible such as real property and sell it to use for operating expenses. Mr. Frank Peterson asked exactly who would be effected by the 2% sales tax. Mrs. Hajdu stated that all people would be effected by the tax. It would effect all the citizens of Kodiak Borough, including the Villages and the transit population or anyone who makes a purchase in the Borough area. K O D I A K ISI D iortani 0 A 1 1 SPECIAL PUBLIC HEARING - June 24, 1968 3 Mr. Tom Sweeney wanted to know if any one thought of a head tax per pupil in school, Mrs. Hajdu explained that since the poor people are the ones who generally have the most children, this would be unwise since it would cost about $500.00 per child based on the present enrollment. E. OIIER AUDIENCE COMMENTS. 1r. Swartz asked the Assembly Members if the sales tax election was delayed, who would have the authority to delay this. Mr. Madsen informed Mr. Swartz that the Borough Assembly could delay the election, however, it was noted that the meeting held tonight was a Public Hearing only, and that the Assembly could not take action at this time. Mrs. Hajdu stated that the election could not be delayed because the Borough has to pass a budget for the School and the Borough for the caning fiscal year. She further stated that an Ordinance is passed to establish the approval of these two budgets, and in the same time, establishes the mil rate for the year to came. In order to know what the mil rate will be, the Assembly has to know in advance as to whether or not there will be a sales tax revenue. If the sales tax is not passed, then there will be a higher mil rate. This information is needed before the Assembly can pass the Ordinance on the budget said Mrs. Hajdu. Mayor Deveau stated that if the City could c e up tiith the money equivalent to the sales tax revenue, the City could give the Borough this and there would not be a need for the increased taxes. Senator Poland felt very strongly in regards to not knowing what he would be voting on, because there was not an Ordinance drawn up. Fors. Hajdu explained that there could not be an Ordinance drawn up until the people gave the Assembly the authority to do so. Guy Powell felt that it is important to supportthe school and that nothing is more import- ant than education, and since it is obvious that the school does not have a proper budget, it is necessary to vote for the sales tax. He felt, however that to make the property owners pay for it would not be an equitable situation. Mr. Owens stated that he had heard through some of the prominent people in Kodiak, that if the people voted no on the sales tax, it would be illegal for the Borough to raise the property taxes'. Mrs. Hajdu said this of course is not true. It was explained by Mr. Icen that the only thing that is going to be on the ballot is whether or not the people are in favor of authorizing the Borough to collect the 2% sales tax for schools and school purposes. If the sales tax is passed, he further stated, then an Ordiance is adopted. There -- was no other discussion except that Mrs. Fostine Johnson expressed her gratitude to the Assembly for all the labor and the time they had put in on this project. V. ADJOUFNEMENT The meeting was adjourned at 10:15 p.m. ATTEST: APPROVED: _ G. S. Best, Borough Chairman