An ordinance to remove one of two tax caps in the city of Fairbanks may not advance to a public vote Monday in part because of a City Council member’s concern about the use of a city vehicle by Mayor Jim Matherly and by his predecessors while they were in office.
Councilwoman Kathryn Ottersten made a public statement both on Facebook and to the Daily News-Miner on Friday calling for Matherly to stop using a city vehicle for personal use and blamed the City Council for letting the practice continue.
Ottersten on Friday rescinded her co-sponsorship of the tax cap measure, Ordinance 6109. The ordinance must have the support of all six council members in order to be placed on the October ballot.
Ottersten said she believes it would be inappropriate to “ask the voters to trust (the city) with more taxpayer dollars” with the vehicle issue pending. She also said she believed the ordinance was both complex and rushed and that council needed more time to communicate with the public. She said there is not enough time before the ballot deadline to do so properly.
“Regardless of the merits of 6109, this is not the time for a ballot question regarding taxation,” she wrote in her Facebook post.
The City Council on Monday is scheduled to hold a second reading and a public hearing for Ordinance 6109, which would remove the city’s mill rate cap from the City Charter. Should the ordinance pass, an amendment to remove the cap will go to a public vote in October.
The proposed ordinance has been controversial.
The property tax mill rate cap is what Matherly called a “sub-cap,” or the second of two tax caps. It sometimes called the “cap within a cap.” That second cap presently limits the mill rate to 4.9 mills and is the subject of Ordinance 6109.
If the ordinance should make it to the ballot and be approved, residents of Fairbanks could experience a slight rise in property taxes — equal to about $31 per $100,000 property assessment, when accounting for inflation at 1%.
The greater tax cap, which generally limits the amount of all taxes — property taxes and other taxes — the city can collect would not be affected.
Ottersten publicly supports mayoral candidate Kathryn Dodge but said her support is unrelated to Friday’s statement withdrawing support for the ordinance because of concern about personal use of a city vehicle.
“If Kathy wins, she doesn’t get a vehicle, either. It shouldn’t go to any mayor,” she said.
According to Ottersten, the mayor’s use of a vehicle constitutes a benefit that is unaccounted for in the city’s budget. This, she alleges, may constitute what she called a “violation of federal income tax regulations.”
Ottersten pointed out that the practice was a “lack of oversight” by the City Council over the course of several mayors. The use of a city vehicle must, she said, be approved by the council in ordinance.
As a result, Ottersten called for Matherly to immediately stop using the city’s vehicle for personal use, to reimburse the city for fuel and maintenance costs for his personal use, including for commuting from home. Further, she stated, “it is an unnecessary waste of city funds to pay for a vehicle for only the mayor’s use.”
Ottersten noted that the mayor of Fairbanks North Star Borough does not have a personal vehicle provided by the borough despite the borough’s larger relative size, so she did not think it was necessary for the city mayor to have one.
Citizens have made comments both online and to the council directly expressing their concern over the city’s management of public funds. The proposed mill rate ordinance was previously co-sponsored by the full council and the mayor.
The council will meet for its regular meeting at 6:30 p.m. Monday at City Hall.
Matherly did not respond to a request for comment about Ottersten’s statements by late Friday.
Contact Cheryl Upshaw at 459-7572. Find her on Twitter: @FDNMcity.