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Bayside Fire Department asks for a mill rate reduction, Kodiak Fire Protection Area No. 1 Service Area Board sends request to Borough

Bayside Volunteer Fire Department, located off Rezanof Drive in the Kodiak Island Borough.
Bayside Volunteer Fire Department, located off Rezanof Drive in the Kodiak Island Borough.

The Kodiak Fire Protection Area No. 1 Board [also known as the Bayside Fire Department] is seeking to cut their area’s property tax rate or mill rate by 10% from 1.5 to 1.35 mills. That decision was a point of contention during the Board’s meeting last week on March 12.

Residents across Kodiak Island Borough saw their property values increase up to 40% in some instances after this year’s assessments went out in the mail at the beginning of the month. Fire Protection Area No. 1, which includes the areas north and east of Kodiak city limits out to the end of Monashka Bay Road, was not immune to the increase.

Board member Paul VanDyke proposed a motion to amend the service area’s budget before sending it to the borough for a final decision. He requested the board adjust its mill rate based on the unexpected additional revenue coming in from increased property assessment values.

“Because even though people ranted and raved on Facebook, the tax cap provides that the Borough will not have a windfall when assessed values are raised either,” VanDyke said. “And I don’t think it’s fair for us to take that windfall when we’ve been good about building this budget and we can live within our means.”

A mill rate is used by the borough to determine how much property tax is owed based on the property’s assessed value. For example, a mill rate of 10 means $10 in tax for every $1,000 of the property’s assessed value.

Out of the five present board members, half were opposed to VanDyke’s motion. Scott Arndt, one of the board members against it who is also the mayor of Kodiak Island Borough, suggested that an open lawsuit against the Bayside Fire Department could impact the board’s finances.

“I think we need to leave the mill rate the same, we have a liability,” Arndt explained. “We have a lawsuit and the deductible of the Borough is $100,000. And as we know from the past, that’s come on to the fire district.”

He was in favor of lowering the mill rate for the Fire Protection Area No. 1 next year, but said he didn’t want to potentially take funds out of savings to cover costs associated with the lawsuit.

Arndt was referencing a civil lawsuit accusing the fire department and the Borough of discrimination brought forward by former firefighter Rebecca Nelson. Nelson claims the department violated the Human Rights Act and she was discriminated against when she applied for the vacant Fire Chief position three separate times during 2020 and 2021.

VanDyke’s motion to decrease the mill rate and adjust the service area’s real property tax revenue to $700,000, a $4,000 increase, and increase the contingency by $4,000 on the expense side to $101,007, was approved in a split vote, three to two. Board Chair Richard Carstens and Arndt voted no, while Vice-Chair John Parker, Mike Dolph and VanDyke voted yes.

The service area’s updated budget now goes to the Kodiak Island Borough Assembly which will make its final decisions on fiscal year 2025 numbers. But the Borough doesn’t have to finalize the budget until June.