City and Borough of Juneau

Assembly Finance Committee Meeting

Wednesday, December 12, 2007
5:00 p.m., Assembly Chambers

 

 

 

I.    Call to Order

II.   Roll Call

IIIApproval of Minutes

 

IV. HUB Funding

The Juneau Christian Center is near completion of a new youth center, the “HUB”.  As noted by Benjamin Rose, Acting Director for HUB, the facility will provide young people a consistent, safe and positive atmosphere to encourage them to succeed.  The total HUB project cost is $1.2 million, of which the Juneau Christian Center has invested $600,000.  The Juneau Christian Center is seeking an additional $600,000 in corporate, community, state and federal grants and is requesting $50,000 from the CBJ to be used for capital expenditures.

 

Enclosed in your packet is a letter from Benjamin Rose, Acting Director – HUB Youth Center, which contains further information on the project.  Mr. Rose will present the Juneau Christian Center’s request.

 

V. Port Development Fee Extension – Resolution 2423

This resolution will extend the Port Development Fee at a rate of $3.00 per arriving passenger.  The current $3.00 Port Development Fee will sunset on March 8, 2008.  This resolution extends the existing rate and fee structure without a sunset provision.

 

The Port Development Fee was reviewed by the Committee of the Whole on September 10, 2007.  The Committee approved a motion to draft the appropriate legislation, Resolution 2423, to extend the fee structure and bring that legislation to the Assembly where it can be directed to the Assembly Committee for further discussion and review.  On October 15, 2007, Assembly directed this resolution to the Assembly Finance Committee for further review.

 

A copy of Resolution 2423 is included in your packet.

 

VI. Port Maintenance Fee

On December 6, 2007, the Docks and Harbors Board amended the Port Maintenance Fee current $0.05-1/2 rate structure to the following –

 

John Stone, Port Director, will present information to the AFC on the Port Maintenance Fee.

 

VII. Senior Citizen Hardship Exemption, Good Cause Definition and Exemption Thresholds

The City and Borough currently elects to provide the optional Senior Citizen Hardship exemption allowed under State Statutes.  Each year the Assessor’s Office receives a number of late filed hardship exemption requests.  Under State Statutes, only the governing body, the Assembly, has the authority to accept late filed hardship exemptions.  The Assembly, for good cause shown, may direct the Assessor to accept the late filed hardship exemption application. 

The CBJ has no provisions in place defining “good cause” or how far back late filed applications can be accepted.  The Assembly has requested that staff review this issue and make a recommendation for a good cause definition and the period late filed application can be accepted.  Enclosed in the packet is a draft ordinance identifying a definition for “Good Cause” and the period that a late filed hardship exemption can be granted, up to one year from the application due date.

 

The following is a discussion of the current hardship exemption 2% qualification threshold.  While the state law sets out local governments’ tax exemption options, the statutes do not detail the specific hardship requirements.  The hardship requirements are set out in state regulations.  The current regulations require us (all governments opting for this exemption) to exempt all qualifying senior citizen property taxes in excess of 2% of the taxpayer’s household income.  For senior citizens with more expensive homes, the 2% threshold results in hardship gross income levels that are quite high.  For example:

 

Senior Citizen property owners with $200,000, $300,000, $600,000 and $800,000 assessed value residences.

 

Assessment

$200,000

$300,000

$600,000

$800,000

Mandatory Senior Exemption

$150,000

$150,000

$150,000

$150,000

Assessment after Senior Exemption

$50,000

$150,000

$450,000

$650,000

Property Tax Levy (2007 mill levy)

$518

$1,555

$4,666

$6,740

2% Gross Income Threshold

$25,900

$77,750

$233,300

$337,000

Attached in the packet is a chart showing the 2% gross earnings threshold in relationship to property assessed values.

 

Recently the State Assessor, Steve Van Sant, has indicated that there is interest in reviewing the regulation and potentially changing the exemption provisions.  He has indicated if we would like to see changes to the exemption, we should forward our recommendation to him for review.   There are a number of recommendations that could be proposed.  For example, we could propose having a progressive scale rather than a flat 2%.  An example of progressive scale could be as follows –

 

Assessment

$200,000

$300,000

$600,000

$800,000

Mandatory Senior Exemption

$150,000

$150,000

$150,000

$150,000

Assessment after Senior Exemption

$50,000

$150,000

$450,000

$650,000

Property Tax Levy (2007 mill levy)

$518

$1,555

$4,666

$6,740

Gross Income Rate

1.5%

2%

2.5%

2.75%

Gross Income Threshold

$34,533

$77,750

$186,640

$245,090

 

If the Assembly Finance Committee has interest in reviewing and making recommendations for possible Senior Citizen Hardship Exemption regulation changes, staff will develop potential options and bring them back to the Finance Committee for review.

 

VIII. Avalanche Forecasting

Rod Swope, City Manager, will provide an update on the results of the avalanche forecasting RFP process.

 

IX.    PERS

The PERS rate for FY09 has been set at 37.11%, up from 22% in FY08.  The impact on operations funded with general tax dollars will be approximately $3.6 million for FY09 alone, which means over a $7 million impact on the biennial budget.

 

X.      Adjournment