The Kenai Peninsula Borough Assembly tweaked its budget, increased supplemental funding to borough employees’ health insurance fund and agreed to dismiss a high-profile lawsuit Tuesday.
At its regular meeting in Soldotna, the assembly hosted the first of two public hearings on Ordinance 2012-19, which appropriates $73.1 million in expenditures and estimates $71.3 million in revenues for the borough’s fiscal year 2013 budget.
No members of the public testified to the assembly about the budget. A final hearing is scheduled for June 5.
The assembly gave unanimous approval to Resolution 2012-044, which decreases the amount of funding to the Kenai Peninsula Borough School District by $500,000 from the borough’s original allocation. The borough will now give the district $43 million.
Borough Mayor Mike Navarre said the change was in response to the Alaska State Legislature making changes that reduced the minimum local contribution level and increased the amount of state funding by the same amount.
“Overall (the school district’s) budget is bigger this year than it was last year and over the last several years what we are seeing is a growth in the fund balance on the school district side and a reduction on the borough side,” Navarre said.
Assembly president Gary Knopp said after the meeting he was pleased with the budget Navarre presented.
“This is my sixth year sitting up here and I think it is the cleanest, smoothest budget I have seen,” Knopp said. “I think it is about as fair and equitable as we could have possibly asked for in the budget.”
Knopp was also pleased, he said, with the direction the budget takes the borough’s fund balance. After the change in funding for schools and lapses from last year’s budget, the reduction of the fund balance would total $500,000, which is down from the $1.7 million deficit the budget originally outlined.
Knopp said he was continually concerned about the amount of fund balance being spent in budgets formed under previous mayoral administrations.
“Somewhere you have to stop that swing,” he said. “We were fortunate in the sense that we had a lot of state dollars coming into the coffers that we didn’t plan on and it has sustained us. Now we have an administration that is responsible enough and has flattened out that slide.”
Navarre hasn’t proposed any “pet projects that are not realistic,” Knopp said. The assembly president will also support the mayor’s request for a new administrative assistant position, he said.
“It is hard for me to dispute that ... because as you can recall a few years ago I proposed putting a ballot question out to the voters to go to a manager form of government because it is too large of a job for one person,” he said. “So when (the mayor) asks for a special assistant and his argument is it is too much for one guy, I whole-heartedly agree.”
The assembly also unanimously approved Ordinance 2011-19-82, which increases the amount of supplemental funding to the borough’s health insurance fund to cover increased costs from its health care plan. The additional money allocated totals $849,000.
Navarre spoke about the issue and said he had heard a lot of “mis-interpretation of information” about what the money would be used for. He said the increase was due to the amount of health insurance claims borough employees had filed. The borough budgeted for $17,000 per participant in this year’s budget, but the actual is about $19,850, according to the ordinance.
Navarre said the borough saw a number of expensive health service requests this year, but there is a possibility all of that money might not be expended. A number of residents testified against the increase in funds.
“The borough is self-insured for their health insurance plan, which means we don’t buy premiums,” Navarre said. “Instead we put money aside and in years that claims aren’t as high, money will lapse back into the general fund at the end of the year. When that happens nobody talks about the savings to tax payers because it is something that you don’t see.”
Navarre said he is concerned with the increase in health care costs and is working to find solutions to lower that cost to borough employees and the public. He said he hopes to keep the assembly apprised of his progress periodically.
“There is no magic bullet for this,” he said. “There is a lot of work to fix a health care system that’s gotten out of control.”
The assembly also unanimously approved a memo of authorization to allow Navarre to settle a lawsuit brought by Kahtnu Ventures against the borough regarding Central Peninsula Hospital and its fourth operating room.
Kahtnu, which was recently denied a Certificate of Need request for building an ambulatory surgery center in Kenai, had taken issue with development and completion of CPH’s fourth operating room, specifically about whether CPH needed to obtain a CON for the project.
According to the memo, Kahtnu, Central Peninsula General Hospital, Inc., and the borough tentatively agreed to dismiss the case with prejudice.
Brian Smith can be reached at firstname.lastname@example.org.