Kenai PERS plan put off again

Council cuts assisted living land donation to 25 acres

Posted: Monday, May 08, 2006

Even in his absence, a Kenai City Council member managed once again to forestall an attempt to exclude elected Kenai officials from the state retirement system.

By e-mail, council member Mike Boyle, who did not attend Wednesday’s city council meeting, asked council member Bob Molloy to enter a motion postponing action on the proposal.

Resolution 2006-20 would exclude all elected officials from participation in the Public Employees Retirement System (PERS).

In January, Boyle asked the council to delay action on the matter, suggesting it would be better to bring it up during budget work sessions. The council conducted its sole budget work session Tuesday.

In a memo from Kenai Finance Director Larry Semmens in January, an analysis by state Rep. Paul Seaton shows the city’s liability for one elected public official with 10 years of service who retires and collects benefits for 22 years as being more than $434,000.

While people vest in PERS after five years of service, those entering the system after July 1, 1996 must accrue a minimum of 10 years of credited service to have system-paid retirement medical coverage at age 60.

In Seaton’s analysis, the bulk of the PERS liability is for medical coverage.

On the Kenai Peninsula, the cities of Homer and Seward have opted out of providing PERS benefits to elected officials, and in Soldotna and Kenai, some individual council members have opted out.

Kenai council members on Wednesday voted unanimously to postpone action on the resolution.

In other business, the council voted to rescind a previously approved donation of 77 acres of city-owned land near the Mommsen Subdivision to Frontier Community Services and the Kenai Senior Connection, and instead agreed to donate only the front 25 acres of the parcel.

The city-owned land is bounded by California Avenue on the north, Nightingale Street on the east, Redoubt Avenue on the south and Fourth Avenue on the west. Some of the streets are not yet built.

The land is to be used by the nonprofit organizations for a senior assisted-living facility and for a Frontier Community Services administration building.

Initially the Senior Connection project was to involve 49 acres and the Frontier project was to use 24.8 acres.

The two organizations joined together to gain an edge in applying for grant funding and reduced the amount of land requested due primarily to the high cost of replacing aging water and sewer line infrastructure at the rear of the site.

James McConnell, project coordinator for the Senior Connection group, told council members acquiring the 25 acres for both projects “shows the grant agencies we’re doing this together,” which would give the group a more favorable rating.

He also said the combined group would pay the $18,000 in back taxes owed to the Kenai Peninsula Borough on the entire 77 acres, and asked the council to forgive $20,000 in back city taxes and $87,000 in owed water and sewer assessments.

Kenai acquired the land through foreclosure for overdue taxes and assessments.

“Then I can show the grant agency the city has a $100,000 commitment to the project,” McConnell said.

He said he would like to submit a development grant application by May 15.

The original land donation request included plans for Senior Connection to develop independent senior housing on the back portion of the property, but that aspect of the plan has been postponed.

The council also approved an ordinance setting fees and establishing procedures for administering grants.

The grant fees charged by the city are designed to recover administrative costs, loss of interest income and ineligible expenditures and cover costs if the organization receiving the grant fails to perform under the terms of the grant.

After some discussion about the fees, the council agreed to set the fees, but also state the fees could be waived by the council upon request.

The next city council meeting, May 17, will be conducted at the Kenai Senior Citizens Center because a new elevator is being installed in city hall.

The May 24 Planning and Zoning meeting also will be at the senior center, and the Social Security representative visiting Kenai on May 24 will be at the senior center that day from noon to 4 p.m.

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