Sales tax would tap Talkeetna tourists to improve the water-sewer system, but it’s meeting resistance

TALKEETNA — Colby Coombs guides climbers up North America's tallest peak — and hauls their waste back down.

So sure, the co-owner of Alaska Mountaineering School sees the irony in the new 3 percent sales tax he'll be paying starting Jan. 1 to upgrade Talkeetna's aging water and sewer system.

Coombs supports the bid to fix the system; he volunteered to take a vacant seat on the town's hard-to-fill water and sewer board.

But because the tax legislation didn't include a cap, Coombs estimates his clients would pay an extra $200 to $300 to make a summit attempt once it goes into effect.

"Climbing Denali is expensive, so it's tough — it makes us less competitive," he said. "Thirty dollars you could sort of swallow … (but) especially since we're crapping in a can and melting snow for water, there's a little bit of insult to injury."

His is one of dozens of businesses in downtown Talkeetna that fall under the tax approved Oct. 3 by residents within the water-sewer district. The vote was 52 to 40.

Borough officials pushed the tax as a way to shift the potentially multimillion-dollar burden for fixing the overwhelmed system from local users to the 100,000-plus tourists who flock to Talkeetna in summer.

The wastewater treatment system has struggled for years to meet state standards for bacteria levels. Critics say the wastewater lagoon and sewer system was installed incorrectly in the first place: uphill from town, in the floodplain of the Talkeetna River.

[Mat-Su faces fine over Talkeetna sewage lagoon overwhelmed by tourist deluge]

"The community had been demanding we get the tourists to pay for it through the bed tax," said Randall Kowalke, the borough Assembly member who represents the area and proposed the tax.

But the majority of revenues from that tax, based on room sales including two big lodges near Talkeetna, goes to the Mat-Su Convention & Visitors Bureau, and the rest can't be divided up by community but instead funds winter trail grooming, officials say.

So the burden is falling to those within the water-sewer district.

Kowalke said several borough officials have been working on some kind of exemption that would help Coombs, with his knowledge. It would cap the sales tax at $1,000 in sales for guided mountain climbing businesses in the district.

Coombs requested a $500 cap at an Assembly meeting to certify the election last week.

Critics say the tax puts the businesses that fall under it at a disadvantage if their prices rise while those outside the district stay the same.

Only about 200 accounts fall within the downtown district that's now within the tax zone, 80 of them commercial.

A bigger concern for Kathleen Holden — who with Gerald Sousa owns Kahiltna Bistro, a fishing service and a dog-mushing tour operator — is the fact she and other business owners didn't even get to cast a vote.

Holden and Sousa live outside the water-sewer district.

Holden also echoed others' concerns that the tax legislation wasn't clearly written. Where is the cap? Why isn't there a sunset date once the system is fixed? What guarantee is there that tax revenues, which will go into the borough's general fund, will be used for Talkeetna's water-sewer system?

She wondered why the borough can't instead use bed taxes to pay for the needed repairs, given the amount of revenue coming in from the big lodges near Talkeetna.

"The whole thing is ridiculous," Holden said.

Borough officials say they don't know how much money the new tax will raise.

Public works director Terry Dolan said there is a long list of priorities to spend tax receipts on. They include measures aimed at bringing the sewer system back into compliance, including removing sludge from lagoons; improving treatment for bacteria removal; and lift station equipment.

Priorities for the water system include well pump upgrades and a meter reading upgrade, according to a list Dolan provided.

The borough plans to hold two informational meetings for Talkeetna residents in November and December.