After it was estimated that property taxes would roughly double for Cooper Landing residents under a proposed service area for the region, the Kenai Peninsula Borough is going back to the drawing board on the best way to support emergency services in that area.
The Kenai Peninsula Borough Assembly in June approved legislation that started the process of creating an emergency service area for the town of Cooper Landing. The resolution, accompanied by a petition in favor of the move signed by about 50 residents, was also strongly supported by the volunteer organization that currently provides emergency services in the area.
Cooper Landing Emergency Services, which operates as a 501(c)3 nonprofit organization and was established in 1973, is responsible for fire and EMS services in the area, which includes a key thoroughfare for people traveling by vehicle to and from the Kenai Peninsula from Anchorage.
In looking to create a borough service area for emergency services, the agency would be able to levy taxes on residents that would provide a reliable source of funding. Currently, CLES is a volunteer organization that is supported by community donations and grants.
The proposed service area would expand the agency’s coverage area to include a buffer zone around the footprint of the future Cooper Landing Bypass Project, which will add 10 miles of new road off of the highway and aims to reduce traffic congestion through the area.
Approval of the resolution by assembly members in June was the first of many steps to actually creating that service area. After that came a report written by Borough Mayor Peter Micciche and a public meeting in Cooper Landing with residents.
Assembly member Cindy Ecklund, who represents the eastern peninsula including Cooper Landing, told assembly members this month that it was clear at that meeting that not all residents had the same information. Some were unaware the process to create a service area was underway, and others balked at the proposed tax increases needed to cover services.
Rising mill rate
A Cooper Landing emergency service area, if created, would, like other borough service areas, be funded with property tax revenue collected from residents of the area. Micciche’s report estimated that the service area’s budget would be between $490,000 and $527,000 annually, based on service information and the agency’s employee structure.
Using that estimate, he said the service area would need to implement a mill rate between 3.7 and 3.95, which would provide sufficient funding for staff and basic agency needs. Mill rates are used to figure out how much someone will pay in property taxes during a certain fiscal year.
“These personnel costs, capital replacement needs and required minimum fund balance, in addition to other items required by the KPB structure, demonstrate that a ‘3.0 or below’ mill rate is unsustainable under the KPB structure,” Micciche wrote. “The expected mill rate for the new service area will likely be between 3.7 and 3.95.”
At 3.95 mills, people who pay property taxes in Cooper Landing would pay $395 per $100,000 of their property’s taxable values. That would be in addition to what the borough, which has its own mill rate of 4.3, collects in property taxes, bringing the total mill rate for Cooper Landing residents to 8.25.
Multiple staff from Cooper Landing Emergency Services, including Chief Dan Osborn and Deputy EMS Chief Clay Adam, spoke in support of a new service area during the assembly’s June 6 meeting. Demand for services, they said, is going up, and the agency is increasingly in need of a stable funding source.
The agency has previously said it responded to more than 130 calls in 2022, up by 30% from the previous year, and that is only expected to grow, particularly when the bypass project is completed.
This year, Adam told assembly member Cooper Landing Emergency Services’ budget was around $233,000, not including capital projects. The agency recently replaced an aging firetruck for $350,000, as well as an ambulance, using grants and donations from the community.
Ecklund and Micciche told assembly members that residents were against the near-doubling of their property taxes, especially if a service area would only maintain the level of service currently being provided to them for free.
Further, Micciche’s report to the assembly found that the service area would end up collecting more taxes per resident than other borough service areas, at roughly $1,600 per person, per year in Cooper Landing. The next-highest amount is the Nikiski Fire Service Area, where roughly $890 in tax revenue is collected per resident each year.
Assessing options
Assembly members received multiple letters from Cooper Landing residents who said they either weren’t aware the emergency service area process was occurring, or who protested the proposed mill rate of 3.95.
“While the fact that this would more than double my current property taxes is startling, even more startling is the fact that, as reported by the mayor, the level of service would remain essentially the same,” wrote Vince Beltrami. “Twice as much tax for the same level of service is absurd.”
David and Martha Story, of Cooper Landing, said creation of a service area for Cooper Landing would put “an untenable financial burden” on Cooper Landing’s taxable residents, and said they support maintaining the status quo while the borough explores a bigger, eastern peninsula service area.
“Establishing a broader service area that can distribute the financial load of servicing a corridor that is important to all Kenai Peninsula residents and visitors across a broader base of taxpayers seems to us to be the most reasonable path forward,” they wrote. “There is growing evidence that the connection of emergency response resources across the peninsula leads to better service and more efficiencies which, in our opinion, makes Option 3 an opportunity worth pursuing.”
“Option 3” refers to three paths forward for the community that Micciche outlines in his June 12 report to the borough assembly.
When it comes to the future of emergency services in Cooper Landing, he said there are three options: maintain the status quo, create the new service area, or start the process of looking at a larger, eastern peninsula emergency service area.
If there is interest in creating a larger emergency service area that covers the eastern peninsula, Micciche wrote in the report, the costs of creating a new service area could be spread more thinly across a larger population. There is also the potential for existing service areas in that region to expand and become more comprehensively organized.
“What I began looking at was the sustainability of service areas and gaps in service throughout the borough,” Micciche told assembly members. “We started looking at what they’re doing in other places — they’re combining tiny service areas. Do you know why? Because they’re completely unsustainable. There has to be a bottom line of taxpayers to spread the costs.”
It was that third option presented in Micciche’s report that ultimately prevailed.
Ecklund during the assembly’s July 11 meeting had brought forward legislation that would have put before voters the question of whether or not to establish the emergency service area and levy a mill rate of 3.95. During the meeting, she withdrew the ordinance entirely, with the understanding that Micciche would begin researching what it would look like to create a big, eastern peninsula service area.
“There is no way that we can get that mill rate lowered for a Cooper Landing service area, even if we took another year to address it and I’ll work with the mayor on finding other routes to provide funding for that area,” Ecklund said.
The assembly’s July 11 meeting can be streamed on the borough’s website at kpb.legistar.com.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
