FAIRBANKS — Fairbanks city residents get to choose in October what to do with roughly $700,000 in potential savings from paying off bonds early.
The money could be used to lower property taxes (by about $40 per $100,000 value of a home) or to pay for additional city services. Either way, taxes would not go up.
“It’s to maintain the status quo,” said Mayor Jerry Cleworth.
The Fairbanks City Council voted unanimously Monday to ask voters to approve using the money for city services. The item will appear on the Oct. 4 ballot.
Under the mayor’s plan, the city would use general fund dollars to pay off almost $1.9 million in bond debt on the $7 million police station, which was approved by voters in 2000. The general fund holds roughly $11 million, about 40 percent more than the minimum required by code.
Paying off the debt early would save the city nearly $700,000 annually, Cleworth said. Because of the city tax cap, the savings would automatically push the mill rate down.
Instead, Cleworth wants to maintain the mill rate and use the money to keep up with the city’s rising costs. Voters would have to approve that idea.
“The city has to have some money to grow. My thought is that you take small pieces as you go,”
The money wouldn’t be used for long-term fixed costs but rather to keep programs or staff that would otherwise be cut, he said.
Contact staff writer Molly Rettig at 459-7590.