City grapples with funds for big projects

Some residents object to supplementing bonds with property tax

Posted: Monday, November 25, 2002

The Juneau Assembly is exploring new ways to pay for harbor and utility projects approved by voters in a $15 million general obligation bond package in October.

Since the election, criticism from local residents who object to funding the projects with property tax has grown. And the Assembly is trying to figure out how to pay for other large community projects such as a swimming pool and high school in the Mendenhall Valley, improvements at the Juneau Airport, and upgrades to the Capitol complex downtown.

The $15 million bond package would pay for harbor improvements in Douglas, Aurora and Harris harbors and a loading facility for commercial boats in Auke Bay. It also would fund a new water line to Tee Harbor, fix a sewer line in Douglas, pay for upgrades at the Eaglecrest Ski Area, design a West Juneau Park, and install water and sewer lines at the airport.

William Field, an Auke Bay resident and contractor, has been circulating a letter suggesting the city fund the projects with sales tax instead of property tax.

"That's mainly because all the voters got to vote on it and only property owners have to pay the bill," he said. "I think we need to look at sales tax as a more equitable way to fund these things."

Field also objects to the fact that all the bond projects were lumped together instead of giving voters a chance to pick and choose.

"There needs to be more public discussion on it," Field said. "And I'd like to hear some of the other sides of it, too."

Voters approved the $15 million measure in October by 118 votes with 4,191 people voting yes and 4,073 voting no.

Since the vote, Assembly member Dale Anderson said he's been inundated with calls and e-mails from people who are concerned the new projects "were placed on the backs of property owners."

"I think we have to be very careful in the future. There are a few bond issues coming up and we need to take note of the dissatisfaction," he said at an Assembly meeting Monday. "It's an issue that's going to be very vocal in our town."

Instead of using property tax, the city could choose to fund the projects with sales tax, user fees or cruise ship passenger fees, Anderson said. A local improvement district, where property owners who benefit from improvements help pay for them, is another option, he said.

Assembly member Marc Wheeler said some of the utility projects could be funded through the city's capital improvement projects list, which is partly supported by sales tax.

"I don't know if it will go anywhere, but I think we need to talk about it, especially with the vote being so close and not having huge support for bonding all those projects," he said. "I think we're going to have to issue some bonds, but maybe not all the bonds."

Wheeler said he's concerned how the city is going to pay future large projects such as a Mendenhall Valley swimming pool and new high school. Anderson adds to that list airport improvements, the Capitol complex, downtown revitalization, the cruise ship dock and port improvements, a new middle school, a transit center, and the city's participation in a federal fisheries research center.

The issue came up at a Finance Committee meeting Wednesday. The Assembly didn't make any decision, but agreed to keep talking.

"We don't want to hold anything up, but I think we want to look at all the options," Wheeler said, "to do the projects people want, but in the most fiscally responsible way we can."

City Finance Director Craig Duncan said the city doesn't have to issue all the bonds if it can find a better way to pay for the projects.

"The Assembly does have flexibility to decide what the best way is to get the projects done," he said. "Maybe the best way to go is general obligation bonds, or maybe in hindsight there's something that's better."

The city isn't required to issue full bonding if a project costs less than expected, if other sources of revenue are available, or if the plans don't make sense, he said.

Most local property taxes go to support city and school operations, but a portion pays for debt. Currently, the tax rate sets aside $103 per $100,000 in assessed value for debt. When the $15 million bond and payments for a $46.9 million new high school are added, the amount should grow to $173 per $100,000 by fiscal year 2007 and then decrease, according to information presented to the Assembly last week.

Joanna Markell can be reached at joannam@juneauempire.com.



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