Ketchikan borough manager proposes capping city library payment at .6-mill tax revenue

Ketchikan Gateway Borough Manager Ruben Duran is recommending that the Borough Assembly reopen talks with the City of Ketchikan on a library payment capped at what a 0.6 mill property tax raises outside the cities. That is less than the city asked for. The Assembly takes up the proposal Monday at 5:30 pm.

Under a draft amendment written by borough staff, the borough would pay the lesser of two amounts. One is the existing population formula: the share of borough residents living outside Ketchikan and Saxman, times the city library's budget. The other is the revenue from a 0.6 mill tax on nonexempt property outside the cities in the preceding fiscal year. A mill equals $1 of tax per $1,000 of assessed property value.

The city requested $725,107 for fiscal 2027, 8.8% more than the year before. The borough says that equals a levy of 0.77 to 0.78 mills. The 0.6 mill tax raises about $565,000 this fiscal year.

The borough budgeted the full $725,107 and paid the city $352,402 on July 7. Under the amendment, a second payment of $282,295, half of what the tax raises, would come due after Jan. 1. The two payments would total $634,697, more than the levy raises, and the packet does not say what the city would receive for its 2027 budget year. The library fund for areas outside the cities began the year with $152,860. The borough estimates about $88,000 would remain if both sides adopt the amendment.

Agreement ends Dec. 31

Duran notified the city June 19 that the borough would end the 2018 agreement effective Dec. 31, using its 180-day notice clause. He wrote that the notice was "predicated by an apparent intent of the Assembly to seek renegotiation."

The levy stood at 0.7 mills after 2018. The Assembly cut it to 0.5 mills for fiscal 2025 after a fund balance built up. The lower levy and rising library costs then nearly emptied the fund, according to the agenda statement. On May 18 the Assembly raised the levy to 0.6 mills.

Two years of stalled talks

The borough's staff report says the Assembly directed staff in June 2024 to negotiate a smaller rate of increase, but city and borough staff could not agree. After the city submitted its request in March, the Assembly directed staff to negotiate an agreement equal to what a 0.5 mill levy raises, and staff again failed to agree April 20. Talks paused in July, when a citizens' initiative petition on library powers was certified for the Oct. 6 ballot.

Proposition 1 would have given the borough areawide library powers and moved the library's assets, operations and funding from the city to the borough. It failed 1,314 to 1,054. It passed inside Ketchikan and Saxman, 658 to 589, and failed outside the cities, 396 to 725.

Library Director Pat Tully told the Library Advisory Board on July 8 that a lapse would remove about 40% of the library's budget and cut residents outside the cities off from its physical and electronic collections, according to the board's draft notes.

Assembly member Kathy Bolling, the Assembly's advisory board representative, said in July, speaking for herself, that the borough had sought to cap increases at the Anchorage consumer price index and the city declined. At the Assembly's Oct. 20 meeting she relayed the board's concern about a possible loss of library services, according to draft minutes.

The borough packet does not say whether residents outside the cities would keep access if no new agreement is signed by Dec. 31.

City Council's next move

The Ketchikan City Council meets Thursday at 7 pm. The agenda lists an executive session, a closed-door discussion, on the agreement. City Manager Abner Hoage wrote in an Oct. 30 memo that his office "will be meeting with the Borough Manager to negotiate terms for library services to non-areawide Borough residents after December 31, 2026."