Insurance increase costs Kenai

Posted: Monday, July 08, 2002

Although Wednesday was just the first Kenai City Council meeting of the 2003 fiscal year, it didn't take long for the city's budget deficit to increase.

The council passed a measure that authorized spending an additional $82,736 to cover the rapidly increasing cost of insurance.

The city will pay roughly $405,000 for insurance this year, a 60 percent increase over last year.

Doug Brown of Brown Agency Insurance told the council the rate increase was in line with industry trends. He said the reason for the increase was the fact that deductible payments had gone up substantially since last year and were still rising.

"Do you anticipate further increases next year?" Kenai Mayor John Williams asked.

"Yes I do," Brown said.

However, he did say insurance costs had been relatively low, and that 2001 was a unique year.

"It's hard to imagine it being any worse than this year," Brown said. "We really aren't doing that bad, it's just a shocker to take a 60 percent hit in one year."

Although the council had little choice in authorizing the additional spending, Williams said the city should have been better prepared for the increase when preparing its 2003 budget.

"Our budget was approximately $175,000 short. We are now at $286,000, and it's only the first meeting of the year," Williams said, noting the council also had to spend $22,881 to pay for a new copier.

Council member Duane Bannock said the mayor's assessment of the situation was unfair. He said the council wasn't to blame for the increased budget shortfall.

"Regardless of what the budget was, we're still spending this $82,000," Bannock said.

"It just wasn't included in our collective thinking, that's all," Williams replied.

Though visibly troubled by the budget gap situation, the council voted unanimously to allocate the funds.

Only one other issue before the council Wednesday generated much debate.

The council passed a resolution reaffirming the city's support for the Alaska Department of Transportation and Public Facilities to build a bike path along Bridge Access Road, separate from the existing roadway.

However, Bannock said he objected to the resolution because he didn't believe a path separate from the roadway would be properly engineered. He noted the existing path through Kenai is only a few years old, is separate from the road and already is deteriorating.

"If that bike path is properly constructed, it is in an unsafe condition," Bannock said.

He said he thinks a bike path would last longer if it was built on the roadbed.

"By attaching it to the road, you get the same roadbed as the road," he said.

Williams said he believed a path separate from the road would be preferable for safety reasons. He suggested adding to the city's letter to DOT that the city supported construction of a properly engineered path.

The mayor's suggestion did little to satisfy Bannock's concerns, as the council voted 6-1 in favor of the resolution, with Bannock casting the lone dissenting vote.

In other action Wednesday, the council:

Appropriated $22,881 to pay for a new copier, supplies and a five-year maintenance contract with HiSpeed Gear of Kenai.

Officially designated the right of way north of Willow Street leading to the airport as Gee Bee Avenue. The name was suggested by the city's planning and zoning commission. City manager Linda Snow told the council the name was chosen because the road is rather short, and the Gee Bee airplane was a "short and stubby" airplane.

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