Cordova residents may notice a hike in their June 30 property tax bills, as the Cordova City Council voted on June 7 to increase the city’s 2017 millage rate to 12.35, up by 1.3 mills over last year’s 11.05 millage rate.
Property tax bills went out in today’s mail.
The 2016 property tax revenue was $2,234,000 and the 2017 budget for property tax revenue had stood previously at $2,474,000, said City Clerk Susan Bourgeois.
“With this 12.35 mill rate the billed property taxes will be $2,533,000,” Bourgeois confirmed in an email to The Cordova Times.
City manager Alan Lanning said the increase in property taxes would bring in an additional $63,000 of revenue to the city, which faced severe budget cuts to the 2017 fiscal year’s operating budget.
City management is looking for alternative methods to increase the city’s FY18 operating budget as well.
In ongoing council workshop sessions over the last several weeks, councilors have discussed various ways to bring more revenue back to city coffers.
The latest workshop was held June 21, prior to the regular council meeting.
A split city sales tax is presently an option for raising city revenues, with various winter-summer scenarios suggested, such as an eight percent city sales tax hike in the summer months, targeting tourists, visitors, and summer workers, and a four percent sales tax in the winter, to give locals a break during the slowest time of the year.
Several seasonal sales tax splits, such as 7/6, 8/4, 8/5, and 8/6 percent, and the amount of revenue the increased summer tax could potentially bring into the city, were highlighted at the June 21 workshop.
Although the council has yet to hold specific budget workshops, Lanning said that “the idea through all of the conversations related to the budget, is how we can get the bang for our buck, and that is sales tax. It will bring more money into Cordova.”
The city council has not, to date, voted on the sales tax increase.
“It has not been voted on,” Lanning wrote in an email to The Cordova Times on June 26. “We are simply exploring revenue options moving forward. It would raise an additional $300,000 and would be effective beginning in 2018.”
“Last year for the 2017 budget, we effectively cut the operating budget to a level that is unsustainable. We cut from $2.021 million to $1.399 million. Our goal is to raise the operating budget back to the $2.021 million level, and given state and federal reductions, we are embarking upon a model that does not rely on those sources for our funding. That’s why we need to raise additional revenue, as the $2.021 (million) is a level that allows us to provide the best services to the citizens.”
Lanning, Cordova Mayor Clay Koplin, city council members and city staff are working together to come up with a long-term plan for Cordova’s economic stability.
“Economic sustainability is achieved by reducing our costs to meet our revenues, with the ability to sustain those revenues each and every year, without relying on outside sources. If the outside sources are realized, then they would be used for capital projects or replenishment of the permanent fund,” Lanning said.
A draft of the FY2018 budget is expected to be ready sometime in August, Lanning said, with the goal of passing next year’s budget in October.
The council also heard, at its June 21 meeting, a presentation from Cathy Long, executive director of the Cordova Chamber of Commerce, on the chamber’s contributions to the city.
Long told the council that she realizes budgeting for the upcoming fiscal year isn’t easy and knows the council is working to position Cordova to move the community forward economically, while considering difficult decisions.
“When you’re looking at the city’s budget, increasing sales tax revenues is a good place to start helping the city’s bottom line. The chamber has been making strides in this area,” Long said. “For example, in recent years, the accommodation tax revenue has continually increased: 2014, $114,69; 2015, $119,109; and in 2016, $120,687.”
Long said the chamber made a first attempt to monitor and record the local impact of a chamber festival, in this case, the annual Shorebird Festival, this year.
“With a program we called Birder’s Bucks, (we) showed nearly $10,000 spent with participating local merchants by Shorebird Festival attendees in just a four-day period. That’s a low estimate – just a snapshot of what was spent; and does not include lodging, rental cars, fuel, transportation, purchases smaller than $20, purchases made at businesses not participating, or Birder’s Bucks that weren’t turned into us,” Long said.
The chamber’s impact on the city’s tax revenue is not new, she said. The first three years the ferry Chenega ran in Cordova, the city’s sales tax revenue went up 30 percent, almost entirely because of chamber’s efforts, she said.
“According to the chamber’s 2016 Cordova Economic Impact Survey, 96 percent of local business owners stated that Cordova Chamber of Commerce festivals had a positive impact on their business. The majority also stated that the work we are doing to attract ecotourism is helping their business, and 92.7 percent felt the chamber was a valuable entity in Cordova. These figures speak to what kind of work we’re doing, but not everything we do can be calculated with numbers and charts,” Long said.
Lanning said cutting funding to the chamber is not presently on the table, but there have been dialogs during previous workshops that the funds allocated to the chamber might be a potential source of funding for large events and promotions.
“We have discussed various revenue options,” Lanning said. “My portrayal to council was, if the revenue picture stayed exactly as projected for 2018, with the huge reductions we implemented next year and if they desired to pursue large events and promotions, then funds would be needed for that purpose.
“Of course, we are currently in a hiring freeze and would not have funds to fill such a position,” he said. “A potential source of funding might be the funds provided to the chamber. It was not a reflection of the chamber’s value or work, but a reflection of council desires.”
Cutting funds to the chamber, or changing the way it presently operates “is not on the radar at this point,” he said.
Long told the council that the funds it allocates to the chamber are pretty small. “Eliminating it completely would not have much effect overall on your budget,” she said.
The chamber, said Long, effectively markets Cordova, brings traffic to town, improves the quality of the experience for visitors, and helps keep money recirculating in town as long as possible.
The chamber has built a strong brand that attracts motivated, low-impact travelers, she said. “We build local and visitor tax base by providing reasons to visit and stay in Cordova. Our events and festivals are beneficial to the city’s bottom line and to the community as a whole, and cannot happen without the chamber,” she said.
