A proposed one percent sales tax increase for payment of the future aquatic wellness center has quickly become payment for all current and future debt retirements, including the Public Safety Facility.
While talks of a six-lane pool, with hot tub and therapy pool are new to the table, Skagway is no stranger to large and expensive ventures. Requested projects include a floating dock, recycling facility, senior center, RV park, and more. The municipality’s non-committed revenue equates to $2,100,000 yearly.
During a Dec. 3 borough assembly meeting, Borough Manager Scott Hahn said the municipality is in its best financial condition ever, and the best in the entire state when it comes to Skagway’s future. Yet the borough cannot afford to do everything it wants to and still be financially strong.
“We are right now very financially fit,” he said. “But that doesn’t mean that tomorrow we couldn’t push ourselves too far. You don’t want to live from paycheck to paycheck, you don’t want to get so much debt or expense that you have nothing left over for incidentals or things that come up.”
The design proposed by North Wind Architects includes a six-lane pool, hot tub, therapy pool and recreation center expansion, totaling between $5 million and $20 million. After discussions with David Moore of Architects Alaska, it looks like the price could be brought closer to $14 million. With a bond of that size, the annual payment would be $742,000.
Raising the sales tax one percent would bring in an extra $1.417 million annually. If used solely for the aquatic center, it would take 15 years to pay off the bond. But there are still maintenance costs to think about, which have been rumored to be very high. Under the municipality’s current code, the money collected from the sales increase could not be used toward the pool’s maintenance. However, code could be amended to allow it.
[quote_right]“It seems like it’s turned into trying to pay down debt for the city and the pool’s getting totally removed from it, and it’s just a sales tax increase, which I would not be for,” Burnham said.[/quote_right]
“First, there is no bond currently that’s authorizing money to be taken out for a pool. Secondly, we do currently have debt in other areas that we are currently paying,” Assemblyman Steve Burnham Jr. said. “We have debt for the public safety facility that will be decently substantial soon. There’s nothing saying that this tax increase, if we adopt this amendment, couldn’t be used toward paying some or all of a pool bond, should it be approved.”
The amendment to put the sales tax increase toward current and future debts was made during a Dec. 3 borough assembly meeting, with only Assemblywoman Angela Grieser and Assemblyman Jay Burnham voting against it.
Both agreed that the revenue from the increase should be put toward the pool, as that’s what it was originally meant for.
A sales tax increase to pay off the Public Safety facility was sent to the voters last year and failed.
“It seems like it’s turned into trying to pay down debt for the city and the pool’s getting totally removed from it, and it’s just a sales tax increase, which I would not be for,” Burnham said. “I’m for a rec center expansion and it seems like a large majority of the town is too.”
And much of the town is, but when and how the tax increase is implemented is concerning.
Tour operators are required to submit their prices in the summer. If a tax increase were applied in 2016, the tours would have to eat that cost. One percent could be very expensive. But Assemblyman Dan Henry said it would likely not begin until 2017.
Resident Jeremy Simmons said he wants a pool and agrees with the one percent increase, but thinks the two should be separate issues.
“I think that method of covering our obligations and expenses needs to be divorced from the projects that we’re doing,” he said.
Originally the increase was suggested to take place in only the second and third quarters, but many say that would be wrong, as it is the locals and not the tourists who will be the main users.
“It’s unethical. It’s inappropriate. If we want a pool, we have to pay for it,” resident Tim Bourcy said, adding that the municipality has created a welfare mentality in the community. “If we want something that is a health and wellness thing for the community, we need to pay for it.”
The ordinance was amended on Dec. 3 to make the increase year-round and passed second reading, with only Grieser and Henry voting against it.
Mayor Mark Schaefer established an ad hoc committee to focus solely on the pool, comprised of rec center board members, assemblymen, school officials and members of the community.
The third and final reading and public hearing will take place at the next assembly meeting. If passed, the proposed sales tax increase would be sent to the voters.