Behind the scenes of City Government By Rodney Dial June 24, 2014
As you may remember, late last year City Manager Karl Amylon continued with his three year crusade to increase sales and property taxes, water and sewer rates. Amylon…pulling a page from the Obama world to end if Sequester is passed play book… told the City Council that without another tax increase, on top of two years of property tax increases; Ketchikan as we know it would end. Amylon claimed that nearly a dozen city employees would be laid off, there would be drastic cuts in city services, police officers would be demoted…and on, and on. It was mentioned repeatedly by Amylon that the previous years of tax increases were needed just to cover the City’s rising debt from the new Library and Fire station bonds. This was in December of 2013. In the months that followed the City Council went back and forth on what type of sales tax increase they wanted. Some wanted a larger seasonal increase while others wanted a smaller year around increase. During this time numerous citizens attended City Council meetings and begged the council to not raise taxes yet again. Local shop owners told the assembly the tax increase would push more people to buy on the internet and not buy locally, that jobs would be lost… the assembly didn’t care. Tourist related business owners told the assembly that their contracts with the cruise lines were locked in for the year and they would be unable to pass the increase on to the customer, it would cost them money…. the assembly ignored them. Others claimed that the sales tax increase would hit the poor the hardest, make food more costly and make Ketchikan an even more expensive place to live… the assembly was unmoved. Citing the need to prevent all the bad Amylon claimed would happen without a tax increase the City raised the sales tax to the second highest of all communities in Alaska. The tax increase was passed at the City Council Meeting on February 20th, 2014. Amylon was quoted in the paper saying the tax increase would bring in $965,000 extra in 2014, and slightly more in the years that follow. FOUR DAYS later on February 24th, Amylon wrote a memo to the City Council providing input as to how the assembly could renovate the Museum at Centennial Building WITHOUT going through a voter approved bond. In his memo he said that although reconstruction or renovation would require a significant expenditure of funds, renovation could be phased in over the next five to seven years and be paid through the city’s annual operating budget. Amylon advised that the cost estimates ranged from $6.8 to $9.5 Million (source March 6th Ketchikan Daily News' article). So if you are following along at this point… a sales tax increase was passed on February 20th, bringing in roughly 1 million per year in new revenue and four days later City Manager Amylon “FINDS” millions in the budget over the next seven years to renovate the museum. Based upon his estimates to renovate the museum of $6.8-9.5 million, divided by seven years = $9,714,285 to $1.35 million per year. Now if you’re the suspicious type the first thing you would notice is that the sales tax increase generates nearly exactly what it is estimated to renovate/replace the museum. Keep in mind that we have been repeatedly told over the last three years that those tax increases were needed to pay the costs of the new Library and Fire Station. What we are not being told is that the latest tax increase was planned for the museum. The fact is that Amylon’s City budget included renovation/replacement of the museum and that is why he claimed the third year of tax increases was necessary. However, Amylon implied to the public that the tax increase was necessary just to maintain the status quo, when in fact it he is padding the budget to generate extra revenue to fund a project the public would not likely approve additional debt for. Here is a recent example of how this game works: A few years ago the City Manager/Assembly believed the public would vote for bonds for the Library and Fire Station projects, especially if the taxes to pay for the bonds were only increased in the following years. They were correct, the public voted for the projects and the taxes to pay for them didn’t start until the issue was largely forgotten by most voters. Three years after these projects were started they are still being used as a justification for year, after year of tax increases. The difference with the museum is this: 1. It has low public support, largely because very few in the community have ever been to the museum and almost no one goes there more than once. Talk to people on the street and most have no idea that we have TWO… yes TWO museums, open year around. In the winter our museums primary attraction is the “Surface of Mars Exhibit” because just like the planet the museum is devoid of human life. It’s only in the tourist season that anyone stops by and even then not many. 2. The public is debt weary after the Dock Projects, Berth III & IV, Pool, Library, Visitors Center, Fire Station, Water Treatment Plant, etc. We have RECENTLY added millions in debt our children will be paying off for decades. Those two primary reasons mean that approval for millions more to build a new museum… when we already have two… is likely DOA with the voters. So, just like our local governments did with Berth IV and Whitecliff (Borough Offices) they will likely do again for the museum; deplete reserves and “do it anyway” and then pass additional tax increases down the road. In the meetings that followed Amylon's revelation of finding millions for this project; the assembly, fearing a community backlash, formed a museum committee. The primary purpose of the committee is to provide political cover for the assembly to spend city reserves on yet another project and then raise taxes as a result. A quick look at the museum committee reveals that it is a mix of government officials, liberals, historians, realtors and a few token average “joes” to make it seem legitimate. Here is what is going to happen around October: If the museum can be replaced without “bonding” using only revenue from the general fund the committee will recommend demolition of the old museum and building a completely new one. They will cry that the building is too old to renovate, the wiring is brittle and starts fires, the roof leaks, not ADA compliant, etc. etc. I give this an 80% or better chance of occurring. This is what supporters want and if they can get it without a public vote this will happen. Maybe the City will do what the borough did with Whitecliff… they will simply sell the building to a contractor, and do a lease to own back, or something similar. The problem with this scenario is that it always doubles or triples the price. If they can’t find a way to build a new museum without bonding they will piecemeal renovation of the facility. If they choose this option it will be a long drawn out mess lasting years, with overrun after overrun costing millions. I give this a 15% chance. They will not likely take that risk, so I only give this about a 5% chance. An efficiently run City Government would have one seasonal museum, not two year around museums. This is what we should do: Renovate the old Fire Station into a quaint seasonal museum open during tourist season. Fund the renovation with the sale of the Centennial building (current museum). Here is why you should care. City residents and businesses are the highest taxed of all communities in SE Alaska, more than double other communities such as Sitka. This is costing us jobs and making Ketchikan too expensive for our young people to live here. Without our young people, taxes will continue to rise to the point where it will further damage our economy and require the City Assembly and Borough Council to eliminate the senior citizen sales tax exemptions. If you don’ think this can happen, keep in mind that local government tracks this expense every year and has discussed its elimination many times. Not enough young people to pay and too many seniors not paying anything and the exemption will go away. Another reason to hold the line on additional spending is that we need to maintain emergency reserves and the ability to repair the facilities we have now. Recent needs include repair to bridges, roads, seawalls, docks, etc. The City is currently in a pissing match with the EPA over the water supply and is close to being required to spend 58 million on a water filtration plant. This is separate from the water purification system recently constructed. To put this amount in perspective: There are roughly 8980 people served by the water system in Ketchikan. According to the City the water division has been operating at a loss for years and is a primary reason water rates have been increasing at several times the rate of inflation each year (another increase recommended for next year). If these 8980 people were to share the cost of a water filtration plant, they would each owe $6458.00. Considering the number of housing and business units, the cost per household of a $58 Million dollar water treatment plant is over $16,000. Of course this is before interest. Should this come to pass, hopefully the state would contribute towards this expense, however the community could be on the hook for the entire cost and massive rate/tax increases would result. If you have been following the local news you’ve heard about how our new pool already needs major work due to defective design/construction and a contractor I talked to about the Library recently told me water is permeating the walls and foundation already. We have major expenses in store just to maintain what we have. Now is not the time to add millions in new expenses to rebuild our second museum. Of course the argument(s) to everything in my letter will be emotion based or greatly exaggerated reasons for why we should spend millions more and go even deeper in debt. My take is that the average voter expects government to build these buildings as efficiently as possible. This means not using imported tile from India to wall the library or spending ½ million in design and construction fees to build a life size display case for the Fire Station. We must demand our elected officials stop adding debt and stop raising taxes while we still can. Tell our local leaders no renovation or replacement of the museum without voter approval. This is yet another example of why city taxes are so high. The Ketchikan Fire Department's display case will need to be heated and maintained for as long as the building exists and serves no functional purpose except to store an old fire truck. ps: To my fellow citizens who keep asking me why the Local News Paper never writes an objective and/or investigative story on what is going on in local government…. I will simply say this. Ask yourself what our primary elected official and the newspaper have in common and you will have your answer. Rodney Dial
Received June 23, 2014 - Published June 24, 2014 Viewpoints - Opinion Letters:
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