Property tax rates will shift after hospital boundaries move in 2019

Oct 4, 2018

South Peninsula Hospital.
Credit Photo Courtesy of South Peninsula Hospital

The final vote count isn’t in quite yet, but Kenai Peninsula Borough voters overwhelmingly approved two bond propositions Tuesday that will shift both the Central Peninsula and South Peninsula hospitals’ service area boundaries.

The CPH service area will move about 15 miles south to Barbara Drive in Ninilchik. SPH’s boundary will expand to include all communities on the south side of Kachemak Bay except for Seldovia.

Property owners across the southern peninsula can expect mill rates to shift, some more than others. However, SPH spokesperson Derotha Ferraro said the hospital will not suffer any financial loss after the new boundaries take effect in 2019.

“So the departing property owners, they take with them 1.18 mills,” Ferraro explained. “The new property owners across the bay, the anticipated mill rate is 1.13 mills. For the people in the existing [boundary], theirs goes down from 2.3 to 2.29.”

Those projections are based on last year’s assessed property values and those figures could shift slightly. Property owners leaving the SPH service area will see their mill rates decrease over the next several years as SPH bond debt is paid off.

Tuesday’s vote settles a two-year long argument on the assembly. Property owners between Ninilchik and Clam Gulch have argued that most residents in the area utilize CPH to the north and therefore they shouldn’t pay the higher property tax rate in the SPH service area. The assembly took up the issue in 2016, but declined to put it on the ballot due to the significant financial impacts it would have on SPH.

After some back and forth on the assembly earlier this year, members compromised on the issue by adding the proposition to expand SPH’s service area.

“We really appreciate that they took the time to find a compromise that had the least amount of negative affect to the least amount of people and presented that to the voters to make a decision,” Ferraro added.\

Ferraro hopes Tuesday’s vote settles the issue for property owners near Clam Gulch and Ninilchik.