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Property taxes set to increase

Daily News Staff Writer

A city compensation study, negotiations with local unions, and property taxes. All three are inextricably linked and are at play at the Ketchikan City Council meeting Thursday.

The city is poised to pass a resolution raising the property tax mill rate from 6.6 mills to 7.4 mills, or $7.4 for every $1,000 of assessed property. For a property assessed at $300,000 that's an annual increase of about $240.

Property taxes are due by Sept. 31.

When the Ketchikan City Council passed the 2019 City of Ketchikan General Government and Ketchikan Public Utilities budget at the end of December, it passed tentative rate increases for Ketchikan Public Utilities and a city-wide increase in property taxes.

These budgets were passed "with the assumption that the mill levy and utility rates would be increased in anticipation of implementing the compensation plan update," according to a memo to the mayor and City Council from City and KPU Manager Karl Amylon.

The water and waste water rate increases went into effect April 1. The electric rate increase has been deferred because of a diesel surcharge.

For the rate increases, a change in city ordinance was required and two public readings of the change were held. As far as property taxes go for the city, a resolution showing a change in the mill rate has to be given to the Ketchikan Gateway Borough on or by June 15, according to Alaska Statutes. As per state law, the borough collects all city taxes. A bill for property taxes will go out to taxpayers July 1.

On Oct. 18, the City Council passed a motion approving a compensation study between the city and Ralph Andersen & Associates for $57,500. The study is considered an update from the compensation study the firm did in 2014. Following the release of that study no formal action was taken.

"I guess my concern is," said Council Member Judy Zenge at the Oct. 18 meeting, "We get this study, and we do what, the same thing we did in 2014? I mean it's not fair to our (city) employees — we're bleeding people right now. And I just get the feeling that all we're doing is kicking it down the road again and that's not fair to our people. And we're having trouble recruiting, we're having trouble retaining, we don't have any succession planning, we really need to — if we're going to do this study, we need to be committed to do something."

Maintaining full staffing has been a continual issue for the city.

According to a memo on May 24 to Amylon from City Human Resources Manager Marie Miller, there are 20 job vacancies city-wide.

For this most recent study, the majority of the jobs within the city are below market median, on average city salary ranges are 6.4% below the market median and have an average ranking of the 37th percentile.

City staff is also recommending that the council schedule a special meeting with representatives from Ralph Andersen & Associates to go over the compensation study update before implementing any such plan. Ralph Andersen & Associates has indicated it is available any time after June 24 for such a meeting.

According to numbers from City Finance Director Bob Newell, raising salaries to match the market median would cost the city and KPU $1.86 million annually, including benefits.

If the mill rate was 7.4 mills, and the electric rate increase of 3.5% went into effect alongside the already implemented water rate increase of 5.5% and waste water increase of 6%, the city would generate roughly $2 million more in a calendar year than last year, according to city documents.

"What action the City Council takes with regard to the mill levy and compensation plan update will have definitive impacts on the negotiation of successor collective bargaining agreements and should be considered before any final determination is made," Amylon wrote in a memo, adding, "the mill levy and the updated compensation plan are inextricably linked," and "I agree with the finance director's observation that the increase in the mill levy is a prerequisite to the implementation of the compensation plan update."

As a result, city staff is recommending that the council have an executive session on collective bargaining agreements with several local unions.

These include the collective bargaining agreements between the City of Ketchikan, the Internationals Brotherhood of Electrical Workers, Local 1547, the Ketchikan Professional Firefighters Association, IAFF, Local 2761 and the Public Safety Employees Association. These agreements will expire either on Dec. 31, 2020 or June 30, 2021.