Amid another round of budget discussions Wednesday night, the Kenai City Council narrowly passed a budget amendment that charges the city's administration with cutting the estimated budget deficit by half over the coming fiscal year.
The council introduced a budget ordinance at its 7 p.m. Wednesday meeting. Introduction of the budget ordinance did not mean the budget was going to be voted on, it just gave the council another opportunity to discuss the matter.
The proposed fiscal year 2002-2003 budget facing the council Wednesday had an estimated $335,000 budget deficit. The council has been split on what to do about it. Council members have been debating whether they should increase the mill rate to balance the budget, pass the budget as is and use money from the general fund to cover the deficit next year, cut the budget to reduce the deficit or use some combination of those options.
Once the budget was opened for discussion, council member Duane Bannock presented an amendment to the proposed budget that was a combination of the latter two options. The amendment gives the budget back to the city manager with the directive that the administration cut the estimated deficit by about half, $165,000, during the year through budget cuts, spending limits, increased user fees and whatever other means it believes are necessary.
"The fact is we couldn't get it done," Bannock said, referring to the council's disagreements over budget cuts. "Collectively, we chose not to do it. I've offered up that responsibility to the city manager. I'm done going through (the budget) line item by line item."
In past budget meetings, council members Amy Jackman and Pat Porter have disagreed with this sentiment, saying they believed it was the council's responsibility to make those cuts. During the citizen's comment portion of Wednesday's meeting, Kenai resident Bob Peters voiced his discontent with the amendment.
"If (the city manager) is going to present the budget, what would make you think she would give you a budget with something to cut?" Peters said. "If you think you can whittle $335,000 out of the budget, then it's for you guys (on the council) to whittle it. You guys should be the ones doing it, not (the city manager)."
Bannock's amendment did not include a mill rate increase and charged the administration to lower the deficit without making negative adjustments to life, health or safety issues. Bannock also challenged the administration to reduce the deficit in a way that affects the community the least, saying that the success of the administration in this task would be how many residents could not see or feel a difference in service.
"Our red ink is not because of a tax problem, our red ink comes from one place -- the fact that interest revenues are down," Bannock said. "It is still my opinion that (the) shortfall can be made up with cuts, and cuts that can pass (the test) of how many residents cannot see or feel it."
When asked if the administration could do what Bannock's amendment proposed, Kenai City Manager Linda Snow said it could.
The proposed amendment met with mixed support from the council but passed by a 4-to-3 vote, with Bannock and council members Jim Bookey, Linda Swarner and Jackman voting in favor and council members Joe Moore and Porter and Mayor John Williams voting against it. Porter and Williams both said they were not in favor of deficit spending for another year.
"For the last six years we have been deficit spending," Williams said. "I am no longer willing to start a budget session out in the red."
Williams strongly supports a mill rate increase to balance the budget.
"I don't believe the community is paying what this city is worth in the area of property tax," Williams said. "... We depend on others to pay our bills. If you're going to live here and enjoy these amenities we have, you're going to have to pay for it, and I'm not willing to pay for it with red ink."
Peters also supported a mill rate increase.
"I, personally, as a citizen, think we've had a free ride in this community for a long time," he said. "I get a lot of nice things and haven't paid for any of it as a city. We've got all this neat stuff, and its time to pay for it."
Another audience member, John Steinbeck of Kenai, who was the city's mayor from 1971-73, spoke against a mill rate increase.
"If you raise taxes on business people now they can't stand it" he said. "A mill on a piece of business property is a lot of dollars."
Bannock's amendment does not call for a mill rate increase, but the council can still vote to change the rate. The mill rate issue will have to be settled at the next council meeting on May 29. If the council does not advise the borough of a change in the rate, it will stay at 3.5 mills.
The May 29 council meeting will also include a public comment session on the proposed budget. Williams encouraged council members to talk to their constituents before the next meeting to get their views on the issue. Members of the public are encouraged to attend the meeting to make their views known to the council.
In other council news:
n A delegation from the area Habitat for Humanity organization presented plaques to the council and the city's Public Works Department for their support of the program over its 10 years of operation.
n The council unanimously approved an ordinance amending the employee classification list to include the chief animal control officer and assistant animal control officer under the Public Safety Department, and the building maintenance lead technician and water and sewer lead operator under the Public Works Department.
n The council voted 6 to 1 to approve an ordinance increasing estimated revenues and appropriations by $16,000 in the general fund to implement a plan to better control the impact of the dipnet fishery on the south side of the Kenai River. The plan will include a portable toilet service, an iron ranger fee collection box, fee envelopes, signs and fencing provided by the city and an all-terrain vehicle provided by the borough. The city will receive grants to mitigate the start-up costs of the program and will implement a parking fee to pay for the remaining cost of the program. Council member Jim Bookey voted not to approve the measure.
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