MEMORANDUM

TO:                Ron Long, Assembly President 

                        Members, Kenai Peninsula Borough Assembly

THRU:           John J. Williams, Borough Mayor

                        Tim Navarre, Chief of Staff

FROM:          Colette Thompson, Borough Attorney

                        Craig Chapman, Finance Director

DATE:           September 27, 2006

RE:                 Proposed amendments to Ordinance 2006-35, Setting the Sales Tax Rate at 2 percent if Proposition 2 is Defeated.

               The following amendments are proposed to clarify that if Proposition 2 is defeated, this ordinance is not intended to limit the assembly’s authority to increase the sales tax rate to 3 percent to the extent allowed by law:

1.         Insert a new “Whereas” clause after the existing eighth whereas clause as follows:

WHEREAS,  this ordinance levies 2 percent instead of the maximum 3 percent sales tax authorized by the voters but is not intended to relinquish the authority to increase the sales tax rate to a maximum of 3 percent at a later date by ordinance without voter approval to the extent such increase is allowed by law; and

2.         Amend Section 1 as follows:

SECTION 1.  That the first sentence of KPB 5.18.100(A) is hereby amended as follows:

A. Without affecting the authority granted by the voters to levy a sales tax of up to 3 percent, [T]there is levied by the borough a consumer’s sales tax of up to 2 percent maximum rate on all retail sales, on all rents, and on all services made or rendered within the borough, measured by the gross sales price of the seller.