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CITY OFSEVVARD <br />CITY COUNCIL VVC}RKSESS|ONRE: ROAD PROJECT FUNDING <br />Monday, December 19,2O1G <br />$3,000,000 Road Bond <br />Shall the City of Seward incur debt and issue general obligation bonds monamount not to exceed <br />three million dollars ($a000,000) to/npncethe planning, design and construction of road improvements <br />mthe City? The bonds shall be secured byopledge of the full faith and credit of the City. Ithexpected <br />that annual payments of principal and interest on the Bonds will be Two Hundred Thirty Thousand <br />dollars ($23400V),mro0.7zincrease /nthe mill rate (from 3.z3mills m3.B4mills, equal monincrease <br />of $72 per $100,000 in property value) or the approximate equivalent of a one-fifth of one percent (0.005) <br />sales tax (from 4.0%m42x). <br />Resolution 2016-045July 25,2016, providedfor submission mvoters, the question of whether to <br />authorize $3million inGeneral Obligation Bonds for the Rood Improvement Project. <br />Election Results ofzV/4/2Oz6: <br />Yes: 297 <br />No: 108 <br />Resolution 2016 -03S - May 9, 2016, authorized matching funds of$50,O00 toward State of Alaska <br />eappmmiaUonof$Bz,443for the Seward Area Paving Improvements Project. <br />Resolution 2uz*-0n7'January z3,onz4-defined the Scope nfWork for use nf$Z.7million <br />federal earmark monies as part of the Statement Transportation Improvement Program for <br />road improvement projects, anticipating local matching funds of $300,000 (not yet appropriated). <br />Funding Ideas: <br />[property Tax - <br />Requires 0.72 mill increase in property tax: <br />Represents I3.1%increase inonly the Seward share ofproperty tax rate (from 3.12mills to3.84mills) <br />Represents 8.6% increase in total property tax rate (including City, KPB and Flood Service Area); from 8.37 mills to <br />9.09 mills). <br />Pros: Easiest option toadminister <br />Property taxes are considered a standard way ofpaying for road improvements. <br />Seward's property tax valuations are fairly stable, so consistent revenue source. <br />Cons: Impacts anestimated fewer than 7OOunique property tax payers. <br />Does not affect numerous government-owned and non-profit owned property. <br />Sales Tax - <br />Requires o.2mincrease )nSales Tax Rate: <br />Represents increase in sales tax rate from 4.0% to 4.2%, (a 5% increase in Seward -only portion of sales tax) <br />Represents increase in total sales tax rate from 7.0% to 7.2% (a 2.86% increase in total Sales tax rate, including City <br />and Kenai Peninsula Borough) <br />Pros: Spreads cost over locals and visitors. <br />Easy to administer <br />Cons: Sewan]'ssales tax rate isalready among the highest. <br />Does not affect numerous govern ment-uwned and non-profit owned property. <br />Sales tax is largely dependent on visitor industry and subject to more variability. <br />Road improvement Fee per pa�� <br />Requires anannual $14B/year($zZ.39/momh)ifassessed asper-parcel fee <br />Assumes 1'4ZZparcels inTAF (4V) and zZDparcels ioTAF (41) <br />Pros: May be a viable means to spread costs among all parcels in Seward, including non-taxable. <br />Assesses costs to properties which is a standard way of paving for road improvements. <br />May bepossible toinclude onutility bill toreduce administrative burden. <br />Cons: May be subject to challenge by government and non-profit entities. <br />