In a split vote, Sitka’s Assembly has decided to share $1 million in excess sales revenue with the public, in the form of utility credits. The move comes after a record summer tour season left local government with an unusual decision: how to best spend the extra cash.
Sitka had 585,000 cruise visitors last summer, many of whom likely purchased a tour, a meal, or a souvenir while in town – resulting in a sales tax windfall for local government. In September, the assembly put $4 million of the surplus into a sinking fund for future infrastructure repairs and replacement. More recently, sponsors of the ordinance proposed taking another $1 million of the surplus and distributing it to Sitkans this winter through one-time $300 utility credit for residential customers.
Assembly member Kevin Mosher wanted to show Sitkans appreciation after an unusually busy summer.
“In my mind, as one of the sponsors, it was to provide a one time benefit to say thank you to the community. Because although tourism is bringing a lot of benefit, it also brings some things that are uncomfortable and difficult,” Mosher said. “
“There’s a lot of people downtown in the summer, and in other ways. So it was an attempt to say thank you.”
But the move was concerning for Klaudia Leccese, who worried about drawing down the city’s reserves.
“It’s, to me, really difficult to think that you would want to just give away the tax dollars that we earned in a high year, knowing that we may not earn that again,” Leccese said. “We don’t know what’s going to happen in the future.”
City Finance Director Melissa Haley said that the city held adequate savings which would not be jeopardized by the draw. But assembly member Thor Christianson felt if the $1 million credit was truly excess, it should also go back into the infrastructure sinking fund.
“Every year we’ve had some sort of emergency spending we’ve had to do every year, something to varying degrees,” Christianson said of his years on the assembly. “Last year, it was probably it was the heat pumps in Blatchley…It’s usually more than one thing, you know, so the idea of bringing down reserves to the low end of the range makes me very nervous.”
Mayor Steven Eisenbeisz said he felt like the city’s reserves are where they should be, and while the assembly periodically raises utility rates to keep up with inflation and maintenance, Eisenbeisz was excited, after 10 years on the assembly, for a rare opportunity to cut those bills down.
“I’ve never had an opportunity to reduce costs to the citizens. It’s talked about, almost as a pipe dream that, you know, once government has an appetite for your cash, it’ll never go away,” Eisenbeisz said. “I understand that sentiment, and this is an opportunity we have to help reduce costs for our citizens.”
It was the second time the one-time utility credit had been on the agenda, and most assembly members still favored the plan. But while Scott Saline had approved the measure on first reading, on the final vote he said he felt like the money could be better spent elsewhere:
“I got a pink slip last month. I could use it but I’m gonna vote no, because we could get some morale back into the electrical department,” Saline said. “This money could be used for the future. It sounds good. I love it. I’m torn too, but get some leadership in that electrical department. There’s a lot of stuff that could help the city make next year better in the future.”
The $300 utility credit passed on a 5-2 vote with assembly members Scott Saline and Thor Christianson opposed. The one-time payment will be applied to qualifying residential utility accounts this December.
