The Anchorage Assembly passed an updated budget with more spending Tuesday night and also raised property taxes in the city by 5.3 percent, in part to pay for legal settlements, rising medical costs and hiring more police.
The new tax rate translates into a $243 property tax increase for a $300,000 home. City treasury employees start preparing tax notices next week.
Part of the tax increase is due to a one-time legal settlement the administration of Mayor Ethan Berkowitz reached with Eklutna Inc. in January.
The city agreed to pay nearly $6 million to end a long-running dispute with Eklutna's Native village corporation over the sale of methane gas from the Eagle River landfill. Legal settlements don't fall under the city's tax cap, a legal restriction on how quickly Anchorage taxes can rise.
[Want to see the changes to the budget? Here's the original document.]
Bond debt, costs associated with city contracts, utility bills, rising medical expenses and a boost in the number of Anchorage police officers are among the other forces behind the higher tax rate. The rate also reflects taxes being collected on behalf of the Anchorage School District.
In all, Anchorage's general government budget grew by $5 million, or just under 1 percent, to $509 million.
The Assembly vote on the revised budget and the new tax rate was 9-2, with members Amy Demboski and Fred Dyson the "no" votes.
The Assembly revises the budget each spring to reflect the actual amount of money coming in and out of Anchorage's government.
The 2017 budget that passed in November — marked by more money for police officers and less for snowplowing and other services — was built with budget officials looking at projections of expenses and revenues, not actual amounts.
Other budget changes reported to the Assembly on Tuesday night:
* A $70,000 loss in revenue at Sullivan Arena due to the demise of Alaska Aces hockey.
* $244,955 more in ambulance fees from a higher volume of transports.
* $1.2 million in proceeds from the sale of an old fire station on Huffman Road.
* $500,000 to pay legal expenses in an ongoing lawsuit brought by a fired Anchorage Police Department lieutenant, Anthony Henry.
The Berkowitz administration also reduced money for the city transit department by $376,000, which budget director Lance Wilber said reflected a newer vanpool program costing less than expected. He said there would be no effect on transit service.
The change provoked a strong response from Jed Smith, the chair of the Public Transportation Advisory Board.
Smith wrote in an email Tuesday night that the board opposed any reduction to the budget. Smith said the cut would make it "impossible" to enact a sweeping redesign of city transit services and bus routes in October. He said he was worried about unintended consequences.
City manager Mike Abbott said the administration disagreed. He said the city expected the redesigned transit service would be successfully launched through the revised budget.
Mayoral administrations and Assembly members sometimes add money for new programs during spring budget revisions. Last year, the Assembly approved nearly half a million dollars for the Berkowitz administration to launch a spate of programs intended to reduce homelessness.
There's little along those lines this year, except for $300,000 to study the possible creation of a stormwater utility in Anchorage. City officials say the proposed utility could help solve problems with aging, clogged drains that lead to water pooling on city streets and roadways.
\Demboski tried to direct the utility study money to a new fire academy instead. After the failure of a bond proposal that would have paid for more firefighters to staff ambulances, Demboski said the city should be focusing on adequate staffing in the Anchorage Fire Department to curb overtime costs.
But Assembly member John Weddleton said a stormwater utility could substantially cut the cost of local development in the future, and the idea should be explored.
More than half of Anchorage's $509 million budget comes from property taxes. Wilber said this year's tax rate increase is lower than the average since 1996. The rate is more than five times higher than the official cost of living increase for 2016.
The Assembly has talked about raising revenue in other ways to reduce the amount shouldered by property taxpayers. The ideas bandied about include a new sales tax, a boost in bed taxes and a local alcohol tax.
None of those measures has made it past the Assembly to the ballot, where new taxes must be approved by voters to take effect.
The Assembly also formally created a new service area along Turnagain Arm on Tuesday night. Residents of communities in Rainbow, Indian, Portage and Bird Creek will see a higher property tax bill that creates a fund for police protection.