Office of the City Manager
710 Mill Bay Road, Room 219, Kodiak, Alaska 99615

MEMORANDUM

To:Mayor Branson and Councilmembers

From:Mike Tvenge, City Manager

Date:October 24, 2017

Subject:Work Session Continued Budget Discussions

At the September 26, 2017, work session, Councilmember Whiddon proposed and Councilmembers briefly discussed additional budget balancing options for further discussion at a future work session. These options include the following:

  1. Feasibility of a hiring freeze for non-essential personnel

The City currently has 8 positions advertised.

Public Works: Maintenance Technician $18.78/hr; Heavy Fleet Mechanic $22.10/hr Library: PT Library Assistant $15.46/hr

Finance: Finance Director: $85-105K; Fiscal specialist $19.89/hr

Kodiak Fire: Two- Firefighter/EMT $14.13/hr

Kodiak Police: Police Officer $22.10/hr

  1. Increase mil rate by 1 point

The currentCity property tax mill rate collected by the KIB is 2 mills. An increase of 1 mill(One mill equals 1/1,000 of $1, or $1 of tax for every $1,000 of value)is estimated to raise $500K in additional revenue at the current assessed property value determination.Article V-8 of the Kodiak City Charter states that the City has the authority by ordinance to levy property taxes, and per AS 29.45.560, the Borough has traditionally asked us each May if we are planning on making any changes to the mill rate.

  1. Re-examine current tax exemptions to determine if there are any additional mechanisms for collecting tax

An attorney opinion is being sought as some exemptions are required by law

  1. Discuss health care contribution by the City to determine any savings potential

The City like many Alaskan municipalities is in a statewide political subdivision pool with Aetna. This policy Plan III has certain requirements which include all permanent part-time and full-time employeesand if desired their dependants. Minimum employer contribution is 50% for full-time employee and dependants, and 50% of the part-time employee’s premium. The City’s health care premiums for October were $267K.

  1. Discuss deferring installation of the Oscar's Dock crane

The dock site has been engineered and holes drilled to mount the fabricated base. The Request for Proposal is scheduled to advertise October 30th. The base and the 1.5 ton crane purchaseare estimatedat$125K.

  1. Review all existing service and consulting contracts to determine cost/benefits and need to retain the contracts: i.e. Fisheries Analyst; Juneau lobbyist; DOWL Group Near Island

Heather McCarty and Associates agreementamendment #1 approved a one year extension expiring February 28, 2018.Current monthlyfee is $ 4,584 shared evenly with the KIB or $2292 each, plus travel expenses.

Gillespie & Associates contract expires December 31, 2017. Current monthly fee is $4,061.25 plus travel expenses.

DOWL has completed the Pedestrian Pathway Plan funded with State of Alaska grant funding. This grant was for the design phase only.

The Near Island Land Use plan is nearly complete with Council’s latest suggested revisions and will soon (TBD) come back for Council’s approval.

Lift stations 3 & 4 replacement is at 90% design stage, engineering cost is $244K, total replacement cost is estimated at $1.9M.ADEC has approved this design with solicitation for bids expected in December. Council must first approve the $1.9M assignment of funds from the sewer capital fund by resolution.

CH2M has completed the $61K design for the WWTP centrifuge installation andis contracted for $76K to review contractor submittals and provide project management.

  1. Discuss combining City and Borough DC lobbying costs

Hoffman Silver Gilman & Blasco P.C. has a letter of engagement approved by Council in 2010. There is no expiration date associated. Brad Gilman is our primary contact at an annual fee of $28,200.

I am unaware of the KIB DC lobbying costs. The individual lobby costs are not readily available. Budgeted political lobbyist line item is $75K.

  1. Outreach to our legislators to determine viability of enacting an online tax plan

This will require the State of Alaska to establish a state income tax allowing for an online tax option.

  1. Review benefit of initiating a City business license

This has been discussed during public work sessions. The local businesses do not have city business licenses but they have a city sales tax registration form. A business license would help the city keep mailing addresses up to date; keep track of businesses no longer operating; assist with building and fire inspections; a modified license could be used for casual events, such as craft shows. A city business license would assist with delinquent sales tax collection and potentialrevocation of license.