At a finance committee meeting in on Jan. 19, two Haines Borough Assembly members were receptive to a loan request from the Haines Senior Village. In the village’s case to the borough, they brought up $30,000 they thought was owed to the village from a past borough tax oversight. But that piece of the argument is in question.
The senior village board has asked the borough for a $350,000 low-interest loan. The non-profit board says it is in over its head with two mortgages that need to be paid off by 2026.
They say without the borough’s help, they may need to refinance the second mortgage and raise rents for residents, many of whom live on fixed incomes.
Doris Peck is one of the 15 seniors living at the village. She asked the assembly members to support them.
“Seniors are not a liability, we are an asset to the community,” Peck said.
While making their case to the borough, the senior village brought up a past property tax issue. The borough charged the village property tax, despite it being tax exempt, for about 20 years. When the mistake was discovered, the borough reimbursed the village about $30,000. That was ten years ago.
The current village board thought there was another $30,000 that the borough did not pay back. And when they approached the borough about the loan, that was one argument supporting the request.
At the finance committee meeting, Assembly member Tom Morphet said because of the tax mistake, the borough had a ‘moral obligation’ to the village.
“I see this as a kind of restitution for non-payment of that other $30,000,” Morphet said.
Borough finance director Jila Stuart cautioned the assembly members against the loan.
“I think the borough needs to stay in its lane,” Stuart said. “The borough provides municipal services, the borough taxes. And I think the borough’s not a bank, they’re not a lending institution, they’re not in that business. There’s lots of other organizations that do lend money, including others in this town.”
After the Jan. 19 meeting, Stuart did some research. She wanted to get to the bottom of whether the borough did only repay half of the taxes it mistakenly charged.
When the village was first built and started operating, Haines was still separated into a city and borough. Records show the borough decided to exempt the village from taxes. But Stuart says records indicate that the city had not exempted the village.
When the city and borough consolidated, the new borough included a property tax exemption for the village. But the borough kept mistakenly charging the village taxes. In 2006, the mistake was discovered. The borough refunded the about $32,000 in overpaid taxes between 1996 and 2005. Minutes from a senior village board meeting show the board did not request interest on the taxes because they accepted some responsibility for not catching the mistake.
In conclusion, Stuart says the village’s statement that the borough did not pay back half of the overpaid taxes is not true, because the city never incorrectly charged them and the borough paid back what was owed.
Village manager Valery McCandless says it’s still not clear that the village wasn’t exempt from city taxes.
“From my reading of the documents, there were some notes from past city meetings, and there was nothing in there that specifically stated that the village was not exempt from city taxes,” McCandless said.
Senior village board member Bill McRoberts said the confusion over the tax payment shouldn’t be the focus of the discussion.
“I don’t know that that, other than being a piece of history about what happened and the confusion it caused, has any influence on what we want to do as far as a loan,” McRoberts said.
McRoberts and McCandless say no matter what happened in the past, their goal now is to persuade the assembly to invest in the village and grant the $350,000 loan. They call it a ‘win-win’ situation, since the borough would be making money through the one percent interest on the loan.
At the finance meeting in January, Assemblyman Mike Case was optimistic about the idea.
“I’m prepared to ask the full assembly to work on this, to see what we can do,” Case said. “Not just write a check right away, but see what we can do to help you out. And I think there will be a way.”
Whether the disagreement about the ten-year-old tax issue factors into the assembly’s decision on the loan remains to be seen.
The village has requested a spot on the Feb. 28 assembly agenda.