$1 million PERS refund is in the bank

Posted: Friday, May 30, 2008

Soldotna city administrators on Wednesday were pleased to announce receipt of a $1 million refund from the state for an advance payment made to the Public Employee Retirement System.

City Finance Officer Joan Miller told the Soldotna City Council the state deposited $1,276,229 into the city's bank account, refunding money the city paid to offset unfunded liabilities in its PERS account. A number of other Alaska cities made voluntary advance payments as well, and when the state announced plans to help pay down the liabilities without regard to advance payments, Soldotna began lobbying for a refund.

In 2005, when Alaska municipalities learned that through an accounting error, the state provided them with erroneous amounts they needed to contribute to PERS, Soldotna took $1 million out of savings and paid it into its PERS account.

That year and the following year, when the state paid Soldotna 5 percent of its payroll to cover the mandated increase in its PERS rate, Soldotna chose to pay that amount into the unfunded liability.

Before the Legislature adjourned for the summer last year, it appropriated $185 million essentially to limit the amount cities need to pay into PERS to 22 percent of payroll.

City Manager Tom Boedeker said at the time, the appropriation does not recognize Soldotna's extra contributions.

"The legislative action on PERS penalizes the city of Soldotna for the extra payments made to reduce the unfunded liability," he said in a memo to the city council.

Working with state legislators representing the Kenai Peninsula, the city's extra contributions finally received recognition and the city received its refund.

News of the bank deposit came on a night when council members were conducting their second public hearing on the city's proposed $15.6 million budget for the coming fiscal year, which begins July 1. No Soldotna residents attended the hearing.

Council members are scheduled to conduct work sessions on the budget Monday and Tuesday, and on a motion by Councilman Jim Stogsdill, they postponed enactment of the budget until June 11.

Jocelyn O'Connor, representing the Kenai Watershed Forum, gave council members an update on planning for the Kenai River Festival slated for June 7 and 8 in Soldotna Creek Park.

She said the festival will run from 11 a.m. to 5 p.m. on both days, and said routes for the 5-kilometer and 10-mile foot races will be the same as last year: along the Sterling Highway from the park, onto East Redoubt Ave., then down to Keystone Drive and back. The shorter race will do its return loop through Swiftwater Park campground.

O'Connor said organizers are still in need of volunteers to cook grilled salmon and to help with parking. Volunteers can contact her at 252-9346 or can contact the watershed forum at 260-5449.

The council unanimously approved an ordinance defining a two-family dwelling, or duplex, as it applies to the municipal code.

Language in the ordinance states, to be considered a two-family dwelling, the dwelling units must be connected by or share a common floor-to-ceiling wall, or if the units are arranged vertically, they must share a common floor-ceiling, not simply be connected by an unenclosed passageway, such as a breezeway.

Earlier, Boedeker said, "The ordinance is driven by strange requests we've had for (things to be declared) duplexes."

The council also unanimously approved amending city code to mandate installing utilities underground within the city rights-of-way.

The ordinance does allow exceptions.

Speaking for Homer Electric Association, Rick Eckert, manager of business development and regulatory affairs, said, "HEA is not an advocate for or against the ordinance."

However, Eckert pointed out that "sometimes, underground construction (of electric lines) is substantially more expensive than overhead."

Boedeker said the city had non-binding agreements with utility providers to install facilities underground, but did not have a formal ordinance mandating it.

Wording in the ordinance states overhead lines undermine "the goal of maintaining a more beautiful community, and (create) safety issues due to overhead line damage from weather and other factors."

Eckert said, when federal guidelines are followed, both underground and overhead construction are safe.

The city council also approved a $232,000 contract to Peninsula Construction Inc., to drill directionally for a 16-inch water line under Slikok Creek to deliver city water to Kenai Peninsula College.

During his manager's report, Boedeker said an initiative petition has been filed with the Kenai Peninsula Borough seeking to exempt groceries from sales tax on the Kenai Peninsula.

He said the borough estimates the impact on Soldotna city revenues to be $700,000.

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.

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