City Council proposes a year-around sales tax to fund a new police station

Apr 24, 2018

Credit Image Courtesy of the City of Homer

The Homer City Council’s plan to fund a new police station changed course Monday. The council wants to implement a .35-percent year-around sales tax instead of a seasonal sales tax. It also plans to ask voters to approve spending $5 million on the project during a special election in June.  

The council introduced three ordinances related to the police station project and spent the majority of its time Monday focusing on its $5 million bond proposal, which would fund most of the $7.5 million project.  

The council previously leaned toward a seasonal sales tax to pay for the bond. But council members unanimously spoke out against the idea. Council member Tom Stroozas said that it would make remitting sales tax too complicated for local businesses.

We're looking at a tax that's bridging two quarters—June July and August, which is somewhat burdensome as far as the collection process is and recordkeeping is concerned,” he said.

Instead, the council settled on a .35 percent year-round sales tax.

I think that would fare well with the public in that it is a much smaller amount,” he said. “It's like 35 cents for every $100 you spend. Look what we get for it— a  little bit easier to swallow than a larger percentage during a shorter period of time.”

Council members previously agreed to keep a portion of the tax on the books after the bond is paid off in order to pay for ongoing maintenance costs. But the year-round tax could bring in more than the city needs to pay for maintenance and annual bond payments, which may pay the bond off before its 20-year term is through. 

The council introduced another measure that would appropriate about $100,000 for a 10-percent design of the building and a site survey. But the council amended the ordinance to remove the design component.  During a work session earlier this month, council members wanted to complete 10 percent of the design prior to the vote and use it as part of the public education process leading up to the regular election in October.

But council member Heath Smith, who previously advocated for moving forward with the design prior to the vote, said Monday that doing so would put cart before the horse.

“I would want to wait before we do anything else because if the voters are on board, then we can just go from point A to Z,” he said. “It’s a done deal.”

Smith suggested a special election on June 26 so the city can keep the construction process on track without spending too much money before the vote.

“There’s not much of an appetite for us to proceed without their approval for the project in its conceptual state as is,” he said. “So if we can do this, then it gives us the benefit of being able to just kind of do it instead of wait until October and kind of bide our time.”

The council agreed to move the election from October to June. But some city council members worry a special election could result in a lower turnout.

City Manager Katie Koester said a special election would also give the council a very short window to get the public on board.

There's really only so much that can be done,” she said. “So we would just be pretty thoughtful and probably put out a mailer, couple ads in the paper and like council member Smith said, rely on outreach by the council.”

The council also introduced an ordinance allocating $5,000 for the public education process. All three measures are due for a public hearing on May 14.