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02/27/1969 RM1 WORK SESSION KODIAK ASSEMBLY & CITY COUNCIL FEBRUARY 27th, 1969 Present Sam Best, Borough Chairman Roy Goodman, City Manager Absent Don Bullock Wil o t °!bite Jo Hajdu Emil Norton Betty Springhill Pete Resoff Don Arndt Jim Barr Dick Berg Jerry Tilley I. lir. Best briefly discussed the letter from Olsen & Sands the construction of the Staff Residence and it was agreed that an attempt will be made to get another architect for the Staff Quarters. II Mr. Best will be making a trip to Juneau for the State Legislative meeting concerning the Public Service Ctmr.+ission Bill. II The purpose of this work session was to discuss the tax situation at present. There are three methods available for taxing - real property, personal property and sales tax, and it is possle to use either part of or all of these methods. The members of the Assembly are not opposed to exempting the fishing boats and gear as suggested by the City Council, however it was pointed out that there must be an alternate source of revenue. It will not be possible to build the new high school without an alternate source of revenue to take the place of the revenue brought in by personal property taxes. It was suggested that the Borough go on ballot to see if the people wish to get rid of the personal property tax altogether and institute a sales tax or exempt a certain type.of property and keep the personal property tax on othere. It was noted that it probably won't be possible to pass the sales tax without eliminating the personal property tax. Mrs. Springhill was concerned about the wording of the. ballet - the sales tax was defeated before because there was no ceiling. Mt. Barr felt the voting would be emotional and would depend on which group has the best publicity. He thouc.::t the Assembly should decide this issue and Mrs. felt that the people should decide it. Mr. Bullock was concerned about getting the information across to the people. Mrs. Hajdu stated that if there is no voting there should at least be a public hearing. It was pointed out that the real preperiviowners are the main stay of the community and must bear the burden as compensation must be made if other taxes are released. I1r. Barr stated that the City has every right to terminate the Pa4mer± in lieu of the personal property taxes if the City Council desires, and felt this move was long overdue; however it is a mistake to subsidize personal property tax with the real property tax. The fact that an ordinance is hard to write and collect should not be the reason for backing away from a desirable sales tax program. He stated further that about one and a half million dollars worth of boats outside the city paid their taxes and there were-- no complaints; this compares to six and a half million dollars worth inside the City. It was felt that the collection of the tax on boats was good because the canneries pay these, but it was pointed out that many of the people own their own boats and are willing to pay the tax. Nr. Tilley said that about 60% of the people do not own the boats they operate. It was mentioned it is possible to get the records from Fish & Game to where the boats fish for Salmon and crab and they are registered for that area, and so could be taxed there. They must fish in the area in which they register. The tax on inventory was discussed at this time and it was pointed out that the merchants will be inclined to let their stock go way . down at the first Of the year. This provides less services for the area and encourages people to buy more from the mail order houses, thus sending money that should be here in the community to other areas. A tax on average inventory over the year Pict also keep the inventory low and would be a bookkeeping burden for the business. The need here is for more small type businesses tied in with the local banks. If consigned goods are taxed the canneries could have their building cleared within one hour to avoid the tax. By exempting the inventory of tax the canneries would stay open longer and thereby employ more people, as it is they shut down about the 15th of December and do not open until the 4th or 5th of January. It was suggested that perhaps the will ten the boats and return sane of the revenue to local governments, but it was felt that it was better for the taxing to be local because the State will keep too mulch. 071 WORK SESSION ASSEMBLY & CITY COUNCIL FEBRUARY 27, 1969 The members were of the general concensus that there should be something worked out on the taxing of boats and gear - perhaps a tax on boat tonnage rather than the boat and gear and this would include all outside boats. Also felt that a solution could be worked out on the inventory and consigned goods. It was pointed out that there are contractors here with equipment that should be taxed, the telephone company for one. It was brought out that the sales tax is costly in man hours and bookkeeping especially if the clerks have to figure two sales taxes, one for the Borough and one for the City. The City does not want to penalize the people coming here from the outer areas to shop but rather encourage them to shop here instead of the mail order houses. Its. Hajdu stated that she had received many telephone calls and they were running about 50/50 on taxing the fishing boats -- some said that as long as the fish are here the fishermen will stay and they will leave when there are no longer any fish to be caught. It was brought out that each body should be able to have a discussion and decide some mutually acceptable way of setting up sources of revenue. The City and The Borough must cooperate. It was also pointed out at this time that the Assembly would like very much to have all available information on a subject to be discussed, particularly the ones brought up by the City Council, at least a week before the Assembly meeting in order to have some background information available and not go into the meeting without any fact concerning the subject. As far as the weighted votes goes, either Councilmen or outside Assemblymen feel threatened. Mrs. Hajdu felt the City should have four representatives on the Assembly instead of the weighted vote, one man - one vote. Meeting adjourned 1:30 p.m. ATTEST: APPROVED: _Ze-tf_571— Sal B. d rix, Clerk/Preasurer — G. S. Best, Borough Chairman