At the request of City Staff, the Assembly approved a comprehensive re-write of Sitka’s credit and debt collection policies (Photo by Brennan Clark)

At their regular meeting Tuesday night (07-12-16), the Sitka Assembly passed – on second and final reading – a comprehensive revision of Sitka’s credit and debt collection policy. The vote was 4-1, with Tristan Guevin voting against. Assemblymen Bob Potrzuski and Steven Eisenbeisz were absent.

See new credit and debt collection policy here: Ord 2016-06S

Chief Administrative Officer Jay Sweeney approached the Assembly in February about the city’s uncollected debt snowball, totalling $1.2 million, and an increase in shut-off notices.

The new language says it if a utility bill is more than 120 days old, the finance department has a few options. They can write off the debt entirely or set up a payment plan, which the already do. Or, on a case-by-case basis, the city can place the debtor on a cash-only basis, meaning in order to receive city services, the debtor must pre-pay.

Furthermore, the policy lays out a series of progressive steps for when debts are owed. Those include forwarding debt to a collections agency, publishing names on the city’s website or the Sitka Sentinel, and even filing civil suit.

Assemblyman Tristan Guevin worried the new policy lacked a proper safety-net for low income Sitkans, commenting, “I would be opposed to any comprehensive collection policy that doesn’t have that built in.” Earlier this summer, Guevin and Assemblyman Bob Potrzuski put forth a plan to subsidize the utility bills of low-income Sitkans. That idea failed to pass.

The city has implemented, however, a donation program for utility bills. Sitkans now have the option to pay a little extra, every month, to support low-income customers. City Administrator Mark Gorman, who was the second person to sign-up after IT Director Ron Duvall, said, “I think we have approximately 6000 utility accounts. If we could get half of those individuals to give $5, we could start making an impact.”

The Assembly also passed two ordinances – on first reading – that would alter how the city manages Sitka’s Permanent Fund.

See ordinance for “Annual Transfer to Permanent Fund” here: Ord 2016-23

See ordinance for “Assets Mix Policy” here: Ord 2016-24

Sitka’s Charter mandates that every year, 6% of the Permanent fund’s average market value is transferred to the General Fund. The purpose of the transfer is to give the General Fund some annual nourishment, while keeping the tax burden low.

But over the past six months, the Investment Committee determined that a 6% transfer is too big to maintain. They want to inflation-proof the permanent fund, by reducing the annual drawdown from 6% to 4% and giving the larger corpus more of a chance to grow. Otherwise, the committee found, the fund will continue to lose purchasing power when adjusted for inflation. The committee advised this change from 6% to 4% not happen all at once, but in increments of half a percent over the next four years.

Assemblyman Matthew Hunter liked the ordinance, calling it a “responsible move.” “It’s going to make our budget harder in the next few years, but after 10 or 15 years, we should be taking more about 4% than we should at 6%. Long term it’s a great idea,” Hunter said.

The Assembly also passed an ordinance providing new guidelines for how the assets of the Permanent Fund are mixed. The portfolio’s manager, Alaska Permanent Capital Management, or APCM, suggested equity assets make up 55% to 75% of the fund’s market value and debt and cash equivalent investments make up 25% to 45%.

The Assembly also granted Aaron Bean a marijuana cultivation facility license for his business, Green Leaf, Inc. This is the second marijuana license the Assembly has awarded, acting as the Local Regulatory Authority. Bean’s application was over 70 pages long and the Assembly voted it through unanimously. Hunter and Mayor Mim McConnell were at ease with the process.

Hunter: I think the thing that makes me most comfortable about these license applications is the depth of detail that the applicants must go into on their state license applications. Down to the point of how they are going to position their doors and windows on the building. What kind of filters? Will they have an alarm system? So, I have no objection.

McConnell: Also, the different levels of approval that are required before it comes to our table. It sees a lot of eyes.

The Planning Commission granted Bean a conditional use permit for the facility in May and the state issued him a license in June. The Green Leaf facility will be located across Old Sitka Dock, and will also include a retail shop.

And finally, city clerk Sara Peterson announced the filing period to run for municipal office opens Monday (07-18-16) and closes August 5th. The mayor’s seat is open, as are two Assembly seats – from Ben Miyasato and Aaron Swanson –  and one seat on the school board, from Jennifer McNichol serving out Lon Garrison’s term. The Municipal Election is October 4th.