The Fairbanks City Council on Monday voted not to increase property taxes to recoup the first $3 million it paid in the settlement with Fairbanks Four member Marvin Roberts.
But how the city will fund the rest of the multi-million-dollar legal bill remains a question for future councils to grapple with.
The council’s move countered city administrators’ original proposal, which would have bumped up this year’s levy by about one mill, to just under 6.8. Instead, the 2025 mill rate will be about 5.8. One mill is equal to $100 owed per $100,000 of a property’s assessed value.
Councilmember John Ringstad said he thinks the lower rate is the right call – even if it means the city won’t recover the money it has paid so far.
“We are where we are. We gotta pay the bills. That’s what we’re doing, ” he said. We’re paying the bills. We’re not arguing the case. We’re not doing any of that.”
The council’s decision comes about a week after the city’s chief financial officer presented a plan to fund and budget for the $11.5 million legal agreement with Roberts.
He was the final member of the Fairbanks Four to drop his wrongful arrest and conviction lawsuit against the city and four of its former police officers. The other three men settled with the city’s insurer about two years ago for $1.6 million apiece.
The insurer is also covering part of the sum in the Roberts settlement, but the city is responsible for $9.5 million and is paying it in three separate installments – the last of which is due in October of next year.
Spreading out the payments allowed for budgeting over three fiscal years. The city paid the first $3 million from its general fund just after the settlement was announced in March, and city leaders proposed a commensurate tax bump this year as a way to recover that money.
Monday’s vote staves off an increase to the mill levy for now, but the current council can’t establish future property tax rates.
That means there’s still a question as to how future councils will choose to fund the remaining $6.5 million bill over the next two fiscal years.
And Councilmember Jerry Cleworth said, barring cuts, he thinks there won’t be as much wiggle room in the city’s general fund next time around.
“We have the luxury of doing it now. We will not in year two or three,” he said.
For some on the council, those fiscal concerns are a thing of the present. Councilmember Valerie Therrien cited dwindling spendable funds in the city budget and the ongoing contract negotiations with the Fairbanks Firefighters’ Union that could drive up expenditures, saying the more responsible choice would be to protect city savings by recapturing the $3 million through property taxes.
“I think that we’re really looking at having a problem being able to balance our budget and have enough money to pay for that arbitration,” she said.
The amendment dropping the proposed property tax rate by about one mill passed 4-2. Councilmembers Ringstad, Cleworth, Lonny Marney, and Sue Sprinkle were in favor; Councilmembers Crystal Tidwell and Valerie Therrien were opposed. The same 4-2 split repeated in the follow-up vote adopting the final version of the resolution to establish the 2025 mill levy.