Editor's note: This article has been corrected to clarify that the borough administration's plan to fix the boilers in the George A. Navarre Borough Administration Building in the meantime is estimated to cost $50,000.
Another budget cycle is barreling down on the Kenai Peninsula Borough, renewing the challenge for the assembly and administration to either cut expenses or convince the public to accept new taxes.
Or, in some cases, it may be a middle ground. Borough Mayor Charlie Pierce, who took office in November 2017, is working with the borough’s various department leaders on a plan to present a balanced budget to the Kenai Peninsula Borough Assembly this spring. The major challenge is to find a solution to the estimated $4 million gap in the budget the assembly approved for fiscal year 2018.
Pierce said he and Chief of Staff John Quick have been going through the budget looking for ways to save money through efficiencies like going paperless — which they say will happen this year — as well as talking to the department directors about where they can cut some costs.
One of the items Pierce repeatedly mentioned in his campaign speeches was his idea to identify spending priorities and consider reducing or stopping some of the lower-priority services in times of budget cuts. The borough administration is also working closely with the school district administration and trying to plan two years’ budgets out ahead of time, Pierce said.
“Not only are we trying to balance the current year’s fiscal budget but we’re looking at 2020 as well, and we’re doing some forecasting so should we not get the favorable news in regards to a new LNG plant and a pipeline in the state and having anticipated revenue from that, then we’ll be able to go through the 2020 year and as a community talk about other revenue sources (through) some form of taxation and develop a plan,” he said. “What we will always do when I’m mayor is look for ways to consolidate and cut costs.”
Leadership from the Alaska Legislature will be a major part of helping the state’s economy recover, Pierce said. Though he didn’t have any firm plans yet to send anyone to Juneau to advocate for the Kenai Peninsula, he pointed out that former mayor Mike Navarre and former chief of staff Larry Persily both work in state government now and can advocate for the borough there.
Decisions at the state level are going to impact the borough’s budget decisions through reduced contributions. During the finance committee meeting before the Kenai Peninsula Borough Assembly’s Jan. 2 meeting, auditor Joy Merriner from auditing firm BDO said decreased state contributions to public employee retirement funds have been impacting local governments statewide.
“Just generally speaking, the state of Alaska contributions are decreasing statewide,” she said. “They’re cutting funding for all sorts of different things but it’s hitting everybody, and we’re seeing that with a lot of our clients.”
Pierce said his administration is working through meetings with department directors and plans to be done in late January or early February. They’re still working toward balancing the budget with no increased taxes but are looking to draw some additional revenue out of the land trust bank.
“We’ve sold land over the years and we’ve built up a fund balance by that process, so we’re going to ask the assembly to transfer some of those dollars over to the general fund to help pay the bills,” he said.
They’re also operating without three department heads at present — E911 director Tammy Goggia, Office of Emergency Management Scott Walden and Road Service Area Director Pat Malone have all resigned in the last few months. Pierce said some other department heads have stepped in as interim directors until they can fill those positions. In other areas, they’ve identified seven other positions they can leave empty for savings, Pierce said.
They’re considering a new approach to the various public safety departments within the borough in the future as well, Pierce said. Currently, borough residents’ public safety needs are met based on service areas with separate departments for emergency management and for dispatch services.
“Public safety is a high priority of mine and (Quick’s),” he said. “We’re looking at it from a public safety perspective and looking at trying to do some reorganization of the leadership in the emergency services sector of our borough … there are nine different islands, and what we’re trying to do is build bridges to each of those islands.”
The borough is also in the midst of a review phase for its comprehensive plan, which the borough’s hired consultants expect to be finished by fall 2018. Pierce said he saw it as an administrator’s responsibility to take comprehensive planning into account and take a long-term view at the borough, both financially and in strategic planning.
Pierce and Quick have also been working on a plan to patch up the heating system in the George A. Navarre Borough Administration Building in Soldotna. During the last election, borough voters rejected a bond proposition designated for a $5 million overhaul of the heating, ventilation and air conditioning system in the building, as well as a number of other technical upgrades. With the problem still there, Pierce said he and Quick are looking at purchasing two new boilers for approximately $50,000 to replace two antiquated ones there and evaluating another fix for an air circulation system to help distribute warm air throughout the building.
Pierce said he didn’t think the administration building is worth the $5 million in resale value, so it didn’t make sense to pour repair money into it when the borough could move and either sell or rent the building for additional revenue.
“This building is almost 50 years old,” he said. “We’ve got a building that has probably met its life purpose. We have electrical issues in the building, you have the ventilation issues … I would rather spend (the money) to fix the problem on an almost 50 year old building and save my other millions of dollars, and not debt ourselves as residents on something perhaps we need to talk about being more futuristic.”
Reach Elizabeth Earl at firstname.lastname@example.org.