State claims the number of people in town continues to go down
The number of people living in Valdez continues to shrink according to state - and city - estimates.
Last January, the State of Alaska notified city officials that its population estimate for Valdez is 3,939 people - 72 less than last year.
While this is bad news for the city's budget, Lisa Von Bargen, director of the economic development department, recommends that Valdez not follow through with an appeal to the state to submit it's own population data because it appears the city's estimate is also short of expectations.
Von Bargen said in a report to council Tuesday that the city's own population estimates have continued to shrink since at least the year 2012.
"The total number of residents identified in the households qualifying for the EAP (Energy Assistance Program) is 3,181. Please remember this number does not include any household where electric and heat is included in the rent," Von Bargen's report said. "The number also does not include our group quarters population. Some examples of group quarters are the US Coast Guard, Crowley Crews, Providence Long Term Care, the Senior Center, etc."
Before the 2010 census, the city routinely - and successfully - appealed the state's population estimates each year.
Von Bargen says the city's current estimate does not warrant an appeal.
"The local numbers over the past year indicate a decrease," she said. "In December 2015 the number was 3,268. From December 2016 the number is 3,181 - a decrease of 87 people."
The numbers are important for Valdez due to the fact that the amount of property tax a municipality is allowed to collect for general spending is limited by its population according to state law. An exemption allows municipalities to collect over the state-imposed cap if the revenue is restricted to paying off debt.
On February 9, Mayor Ruth Knight notified the state's commissioner of economic development, Chris Hladick, that the City of Valdez intended to appeal the state's population determination and asked for additional time to gather more data.
The population will restrict how much property tax the city can collect for general fund revenues, and how much it must use for debt service.
Last year, the city received windfall revenues after issues surrounding past tax lawsuits against oil property within the city of Valdez.
"The majority of general fund revenues (80 percent) are driven by the TAPS legal settlement executed in March of 2016. Since 2006, 90 percent of the City's General Fund revenues have been comprised of property taxes, and 90 percent of this figure represents taxes on the TAPS," the city's 2017 budget statement said. "These proportions continue in 2017, and will extend through 2020, pursuant to the settlement reached in 2016. TAPS tax revenues reflect an $8.5 billion total TAPS value, and the 2017 budget assumes a continued twenty-mill levy."
The budget also spelled out the current state statute governing how excess revenues may be spent:
Administration anticipates continued excess revenues in 2017, as defined in State statutes (see AS 29.45.080). Statues stipulate that excess revenues be either applied to debt service or remitted back to the State of Alaska. The City has sufficient outstanding debt to comply with this statute, and will therefore retain these excess revenues in 2017.