City Council Rejects Ordinance Asking Voters to OK Easing Limit on Property-tax Hikes

Jul 9, 2019

The Fairbanks City Council soundly rejected an ordinance Monday that would’ve asked voters this fall to approve easing the city’s restrictions on property-tax hikes. All six council members and Mayor Jim Matherly supported the measure when it was introduced two weeks ago, as a means of raising revenues to offset a dropoff in state funding. But their consensus fell apart after two members withdrew their support.


The ordinance drafted by Councilman Jerry Cleworth would’ve asked voters to allow the city to exceed its property-tax base rate limit of 4.9 mills. The proposal was intended to help the city raise revenues to pay for services that are increasingly in demand at the same time the state is slashing funding to municipalities.

Cleworth is perhaps the council’s most fiscally conservative member, but he agreed to the council’s request to write the ordinance.

“I wasn’t terribly enthusiastic about it,” he said, “because I believe that the council has not done the best job of being great fiscal stewards.”

In remarks before the council voted on the ordinance, however, Cleworth said he would no longer supports his own proposal.

“I’m voting no, because I’m embarrassed to bring it forward,” he said.

Cleworth said he can’t support the tax cap ordinance  because the council had just voted to “permanently postpone” consideration of another measure that he’d also written. That resolution raised concerns over a state House bill that would re-establish a defined-benefit plan for some public employees. He said he couldn’t ask voters to consider higher property taxes if the council won’t back a resolution that’s points out the high cost of re-establishing the Alaska Public Employees Retirement System, or PERS, benefit for some state and municipal workers.

“I encourage you to vote no on Ordinance 6109,” he said, “and I wrote the darn thing.”

Cleworth did vote against the ordinance, along with three others; Valerie Therrien and Shoshana Kun voted yes. But by then the tax-cap ordinance was already effectively dead, because one of the other council members, Kathryn Ottersten, said she no longer supports it. City Code requires approval of all six members to place the question on the ballot. But Ottersten said it’s unfair to ask property owners to go along with a tax hike, while Mayor Jim Matherly uses a city vehicle for unofficial purposes. She says she found out about it last year while campaigning.

“It was the Number 1 thing people asked me about, of anything when I went to their door to introduce myself as I was running -- was your vehicle,” she said.

Ottersten says it’s another example of what she calls the council’s failure to adequately oversee city assets.

“There’s a lot of things as I started to research that this council has not done proper oversight on, over the years,” she said.

Matherly conceded during the meeting that he, like the past few mayors, does sometimes drive the city vehicle for personal use, especially on busy days when he’s traveling from one event to another.

“I’m not hiding anything,” he said. “I drive this car. I have. And I am using it for personal use, at the same time.”

The mayor says he believed personal use of the vehicle was part of his benefit package. But he says he now understands that he must report that vehicle use as taxable income.

“And now I’ve directed my chief of staff and the finance department to determine the tax bill and the liability,” he said. “And when I have that number, I will report it back to this body, so you will know.”

Matherly said he regretted that Ottersten pulled an “I gotcha” by accusing him of the impropriety in social-media posts last week, which resulted in the story showing up on the front page of the Sunday Fairbanks Daily News-Miner.  He encouraged council members who have complaints about him to talk to him first, before going public.