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HomeMy WebLinkAboutOrdinance No. 3542-2026KENAI CITY OF KENAI ORDINANCE NO. 3542-2026 Sponsored by: Knackstedt, Kisena AN ORDINANCE PROVIDING FOR THE SUBMISSION TO THE QUALIFIED VOTERS OF THE CITY OF KENAI, AT THE REGULAR ELECTION TO BE HELD ON NOVEMBER 3, 2026, THE QUESTION OF ENACTING KENAI MUNICIPAL CODE, SECTION 7.05.031- RESIDENTIAL PROPERTY TAX EXEMPTION, TO ESTABLISH A RESIDENTIAL PROPERTY TAX EXEMPTION IN THE AMOUNT OF $75,000. WHEREAS, Alaska Statutes 29.45.050(a) provides that a municipality may exclude or partially exempt residential property taxation by ordinance ratified by the voters at an election; and, WHEREAS, Alaska Statute 29.45.050(a) also establishes that exemptions authorized under this section may not exceed the assessed value of $75,000; and, WHEREAS, this ordinance proposes to amend Kenai Municipal Code to establish a residential property tax exemption in the amount of $75,000 in the City of Kenai subject to voter approval, for residents receiving the same exemption for Kenai Peninsula Borough property taxes; and, WHEREAS, the proposed code change and ballot language will grant the City's residential real property tax exemption only to those residents that apply for and receive the Kenai Peninsula Borough's residential real property tax exemption; and, WHEREAS, if approved, the exemption will provide additional property tax exemption to Kenai residents currently receiving the mandatory $150,000 senior or $150,000 disabled veteran exemption per Alaska Statute 29.45.030(e); and, WHEREAS, an estimated 1,421 property owners will be eligible for the proposed exemption exempting an estimated $99,743,700 in property value, including $3,346,500 of disabled veteran exemptions (49), $36,221,900 of senior exemptions (551), and $60,175,300 of eligible property exemptions that do not qualify for the senior or disabled veteran exemption (821); and, WHEREAS, the total financial impact to the City, at its current tax rate of 4.35 mills, is estimated to be $433,855 annually with the maximum savings to an individual property owner of $326.25 annually; and, WHEREAS, it is intended that this exemption if approved by the voters incentivizes primary home ownership in Kenai; and, WHEREAS, if approved by the voters, the exemption will take effect January 1, 2027, for Fiscal Year 2028. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, AS FOLLOWS: Section 1. That the following proposition shall be submitted to the qualified voters of the City of Kenai at the November 3, 2026, City of Kenai Regular Election in substantially the same form as set out hereafter: PROPOSITION NO. 2026-C RESIDENTIAL PROPERTY TAX EXEMPTION New Text Underlined-, [DELETED TEXT BRACKETED] Ordinance No. 3542-2026 Page 2 of 3 Enacting Kenai Municipal Code to Establish a Residential Property Tax Exemption in the amount of $75,000. Shall Ordinance No. 3542-2026 enacting Kenai Municipal Code Section 7.05.031 - Residential Property Tax Exemption, be ratified to establish a residential real property tax exemption of $75,000. YES [A YES vote means you approve enacting Kenai Municipal Code 7.05.031 to establish a residential real property tax exemption of $75,000.] NO [A NO vote means you oppose enacting Kenai Municipal Code 7.05.031 to establish a residential real property tax exemption of $75,000.] Section 2. That following the November 3, 2026, City of Kenai Regular Election, if the proposition substantially in the same form as set out above in Section 1 of this ordinance is ratified by the voters, the following section of Kenai Municipal Code would become effective on January 1, 2027. 7.05.031 - Residential Property Tax Exemption The first $75,000 of assessed valuation of a single parcel of residential real property, owned, or partly owned and occupied as a primary residence and permanent place of abode by a City resident, may be eligible for this residential real property exemption from the City's tax levy on real property within the City of Kenai. Only City residents that apply for and receive the Kenai Peninsula Borough's residential real property tax exemption under the Borough's code of ordinances as now enacted or amended in the future, will receive the City's residential property tax exemption. The Borough Assessor's determination of whether property in the City qualifies for the Borough's residential real property tax exemption will be determinative of whether the property qualifies for the exemption under the City's code of ordinances. Section 3. That the following proposition summary shall be submitted to the qualified voters of the City of Kenai in substantially the same form as set out hereafter: Proposition No. 2026-C: This proposition would enact a new section of Kenai Municipal Code establishing a residential property tax exemption of $75,000. Ballot Language: PROPOSITION NO. 2026-C RESIDENTIAL PROPERTY TAX EXEMPTION Enacting Kenai Municipal Code to Establish a Residential Property Tax Exemption in the amount of $75,000. Shall Ordinance No 3542-2026 enacting Kenai Municipal Code Section 7.05.031 - Residential Property Tax Exemption, be ratified to establish a residential real property tax exemption of $75,000. YES [A YES vote means you approve enacting Kenai Municipal Code 7.05.031 to establish a residential real property tax exemption of $75,000.] NO [A NO vote means you oppose enacting Kenai Municipal Code 7.05.031 to establish a residential real property tax exemption of $75,000.] Proposed Code Enactment: 7.05.031 - Residential Property Tax Exemption The first $75,000 of assessed valuation of a single parcel of residential real property, owned, or partly owned and occupied as a primary residence and permanent place of abode by a City resident, may be eligible for this residential real property exemption from the City's tax levy on New Text Underlined; [DELETED TEXT BRACKETED] K I N City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 907.283.7535 www.kenai.city MEMORANDUM TO: Mayor Knackstedt and Council Members FROM: Terry Eubank, City Manager DATE: August 21, 2026 SUBJECT: Ordinance No. 3542-2026 Requested Amendment This memo requests an amendment to Ordinance 3542-2026. During calculations of exemption amounts, minor discrepancies were discovered in the amounts included in Ordinance 3542-2026 as introduced. The updated estimates of the number of eligible properties for the residential exemption is 1,421 rather than the 1,435, exempting an estimated $99,743,700 in property value rather than $101,655,600. The estimated number of senior exemptions is 551 rather than 533, exempting an estimated $36,221,900 in value rather than $35,037,400. The estimated number of eligible property exemptions for properties that do not qualify for a senior or disable veteran exemptions is 821 rather than 853. The estimated value of eligible property for properties that do not qualify for a senior or disable veteran exemptions is $60,175,300 rather than $63,271,700. The estimated total financial impact to the City is $433,885 rather than $442,202. The proposed amendment is requested to correct these discrepancies. The following amendment is respectfully requested. Motion Amend the sixth whereas clause to change the total number of eligible property owners from 1,435 to 1,421, the estimated exemption amount from $101,655,600 to $99,743,700, the estimated number of senior exemptions from 533 to 551, the estimated senior exemption amount from $35,037,400 to $36;221,900; the estimated number of eligible property exemptions for properties that do not qualify for the senior or disable veteran exemptions from 853 to 821, and the estimated exemption amount for properties that do not qualify for a senior or disable veteran exemption from $63,271,700 to $60,175,300. After amendment the sixth whereas clause would read: WHEREAS, an estimated 1,421 property owners will be eligible for the proposed exemption exempting an estimated $99,743,700 in property value, including $3,346,500 of disabled veteran exemptions (49), $36,221,900 of senior exemptions (551), and $60,175,300 of eligible property exemptions that do not qualify for the senior or disabled veteran exemption (821); and, Amend the seventh whereas clause to change the total financial impact to the City amount from $442,202 to $433,855. After amendment the seventh whereas clause would read: WHEREAS, the total financial impact to the City, at its current tax rate of 4.35 mills, is estimated to be $433,885 annually with the maximum savings to an individual property owner of $326.25 annually; and, Thank you for your consideration. l�KFNAI City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 wwwLenai.city MEMORANDUM TO: Mayor Knackstedt and Council Members FROM: Phil Daniel, Council Member DATE: August 21, 2026 SUBJECT: Ordinance No. 3542-2026 Requested Amendment This memo requests an amendment to Ordinance 3542-2026, to better define for voters, the fiscal impacts to the City of ratifying Ballot Proposition 2026-C that is proposed by this ordinance. The information to be communicated is included in the sixth and seventh WHEREAS's of the ordinance and this amendment will include that information in the Fiscal Impact section of the proposition summary to be present to voters. Inclusion of this amendment will provide voters with the estimated fiscal impact when casting their vote. This amendment includes revised amounts provided by the City Manager in his requested amendment. Alternative language can be provided should the City Manager's requested amendment not be moved or approved. The following amendment is respectfully requested. Motion Amend Section 3, Fiscal Impact paragraph by inserting the maximum property tax savings each property owners could receive "up to a $326.25" in the first sentence and adding a second sentence identifying the total estimated value of property exempted and the estimated annual revenue impact to the City. After amendment the Fiscal Impact portion of the proposition summary would read: Fiscal Impact: Eligible property owners could see up to a $326.25 reduction in their annual property tax liability due to a portion of their permanent place of residence assessed value being exempt from taxation. If approved, an estimated 1,421 property owners may be eligible, resulting in the exemption of $99,743,700 in property from taxation and reducing the City of Kenai's real property tax revenue by $433,885 annually based on the City's currently adopted mill rate of 4.35. New Text Underlined; [DELETED TEXT BRACKETED] Thank you for your consideration. Ordinance No. 3542-2026 Page 3 of 3 real property within the City of Kenai. Only City residents that apply for and receive the Kenai Peninsula Borough's residential real property tax exemption under the Borough's code of ordinances as now enacted or amended in the future, will receive the City's residential property tax exemption. The Borough Assessor's determination of whether property in the City qualifies for the Borough's residential real property tax exemption will be determinative of whether the property qualifies for the exemption under the City's code of ordinances. Implementation Date: If approved by the voters at the November 3, 2026, City of Kenai election, Kenai Municipal Code Section 7.05.031 - Residential Property Tax Exemption will be in effect on January 1, 2027, for Fiscal Year 2028. Fiscal Impact: Eligible property owners could see up to a $326.25 reduction in their annual property tax liability due to a portion of their permanent place of residence assessed value being exempt from taxation. If approved, an estimated 1,421 property owners may be eligible, resulting in the exemption of $99,743,700 in property from taxation and reducing the City of Kenai's real property tax revenue by $433,885 annually based on the City's current adopted mill rate of 4.35. Summary of Amendment: If approved, the first $75,000 assessed value of qualifying residential real property would be exempt from municipal property taxes, reducing the taxable assessed value of eligible residence by $75,000. Section 4. Severability: That if any part or provision of this ordinance or application thereof to any person or circumstances is adjudged invalid by any court of competent jurisdiction, such judgment shall be confined in its operation to the part, provision, or application directly involved in all controversy in which this judgment shall have been rendered, and shall not affect or impair the validity of the remainder of this title or application thereof to other persons or circumstances. The City Council hereby declares that it would have enacted the remainder of this ordinance even without such part, provision, or application. Section 5. Effective Date: That pursuant to KMC 6.05.080, sections 1, 3 and 4 of this ordinance shall take effect immediately upon enactment. Section 2 shall only take effect if approved by a majority of eligible voters of the City of Kenai who vote on the question during the November 3, 2026, City of Kenai Election. ENACTED BY THE COUNCIL OF THE CITY OF KEI 2026. ST: Michelle . Sa",C, City Clerk Introduced: August 19, 2026 Enacted: September 2, 2026 Effective: See Section 5 New Text Underlined; [DELETED TEXT BRACKETED] KI 1A1 City of Kenai 1 210 Fidalgo Ave, Kenai, AK 99611-7794 1907.283.7535 1 www.kenai.city MEMORANDUM TO: Council Members FROM: Mayor Knackstedt and Council Member Kisena DATE: August 11, 2026 SUBJECT: Ordinance No. 3542-2026 - Providing for the Submission to the Qualified Voters of the City of Kenai, at the Regular Election to be Held on November 3, 2026, the Question of Enacting Kenai Municipal Code, Section 7.05.031- Residential Property Tax Exemption, to Establish a Residential Property Tax Exemption in the Amount of $75,000. During the August 5, 2026, City Council meeting, public testimony was provided requesting the City Council consider implementation of a $75,000 residential property tax exemption. After Council discussion a work session was scheduled for August 19, 2026, to discuss the issue further. We requested the administration prepare, for Council's consideration and discussion, the necessary legislation to place the issue on the ballot for voter consideration. Alaska Statutes (AS) 29.45.050(a) authorizes a municipality, by ordinance ratified by the voters, to exclude or partially exempt residential property from taxation up to a maximum of $75,000 of assessed value. Under the proposed code provisions within the Ordinance, the first $75,000 of assessed value of qualifying residential property would be exempt from the City's property tax levy. The proposed exemption would apply in addition to the mandatory $150,000 senior citizen or $150,000 disabled veteran property tax exemptions authorized by AS 29.45.030(e). The proposed exemption will provide tax relief to qualifying taxpayers who occupy the property as their primary residence. An estimated 1,435 property owners will be eligible for the proposed exemption exempting an estimated $101,655,600 in property value, including $3,346,500 of disabled veteran exemptions (49), $35,037,400 of senior exemptions (533), and $63,271,700 of eligible property exemptions that do not qualify for the senior or disabled veteran exemption (853). The total annual financial impact to the City, at its current tax rate of 4.35 mills, is estimated to be $442,202 with the maximum savings to an individual property owner of $326.25. In order to qualify for the exemption, residents must apply through the Borough for its residential property tax exemption, this includes those that are receiving the senior citizen or disabled veteran property tax exemption through the Borough that may not have previously applied for the residential property tax exemption. The Borough assessor's determination of qualification for its residential property tax exemption would apply to the City's residential property tax exemption.