Spending tops talk at debate

Posted: Thursday, September 16, 2004

Candidates vying for two of the three open assembly seats pitched their positions on the issues to a modest Soldotna Chamber of Commerce luncheon crowd Tuesday.

While they often agreed that Kenai Peninsula Borough spending must be controlled, they varied over the degree of the problem and what must be done to accomplish that goal.

Assembly President Pete Sprague of Soldotna is facing challenges from two opponents in the race for District 4: Fred Sturman of Soldotna, a frequent critic of assembly spending, and Michael Swan of Soldotna, a newcomer to the political arena.

Meanwhile, assembly member Paul Fischer of Kasilof is being challenged by Kenai attorney Mark Osterman in the race for District 7.

Osterman told the audience he was not a fiscal conservative, but a constitutional conservative. He said the assembly needed to "stop the outpouring of money from coffers of the borough." He said the borough must provide the essential services, but not much more. The borough must avoid what he called the tax and spend practices common in the Lower 48.

"Five years ago I was practicing law in Michigan where I was spending 49 percent of my income in taxes. We're headed there," he warned.

Fischer countered, arguing that in his opinion the borough "is in fine shape." He told the audience that "now is not the time for a change."

He noted his long experience in public life, including assembly stints beginning in the 1970s, followed by 10 year's service in the Alaska Senate, and, since 1998, on the assembly again.

Sprague said the borough faces some serious challenges, including declining oil and gas production, the need to fund education adequately, skyrocketing insurance and retirement costs, and planning for responsible resource and land development.

He said his record was clear, that he has demonstrated fiscal constraint and that he has voted to fully fund education.

Swan acknowledged he is new to local politics but said he has been involved "behind the scenes." As a surveyor, he said he has dealt at length with the borough planning department and assessors.

"I know everyone in the upper level of that (borough) building and can bring a lot of experience in land-management decisions to this seat," he said, adding he was a problem solver and would bring that skill to the table. The borough should work more cooperatively with the state and federal governments, he said.

Sturman, who often can be found at assembly meetings voicing his opinions on one proposal or another, said his biggest concern at this time is spending.

"Five years ago, we had $26 million in the bank, now we've got $13 million," he said, adding the bonded debt the borough once had has largely been paid off, but the borough continues to spend more than it takes in.

"I don't think there are too many people or too many businesses that can last much longer at this rate of spending," he said.

The borough's savings account, often called its fund balance, was larger a couple of years ago. However, on the advice of auditors, the borough has been working to reduce the size of that "rainy-day" account, in part by keeping property taxes lower than a break-even point while the fund balance is shaved. According to the current budget, the fund balance is around $15 million, and in the estimate of some members, about where it should be.

The candidates were asked to relate their understanding of the relationship between the borough and its cities.

Sturman said he thought city taxes also were too high and that there was little difference between the two.

Sprague said the cities benefit from services also enjoyed by those outside their boundaries, including the hospitals, solid waste disposal and emergency services. Residents of the cities and unincorporated areas share in those costs, he said.

Saying he was the only candidate for District 4 who didn't live inside Soldotna, Swan said borough actions affect him directly. He said people outside the cities needed to work closely with the cities where they share common services.

Fischer noted city dwellers get the same services as the borough residents because they, too, pay borough taxes. City residents pay city taxes, as well.

"I think the borough has a good relationship with the cities," he said. The assembly, he said, looks at all its citizens as residents of the borough regardless of whether they live inside or outside cities.

Osterman agreed there is a good relationship. He did say he thought transportation could be enhanced and that there should be a system connecting the cities, but that spending along those lines must not be a detriment to other services provided by the borough.

Asked about the borough's fund balance, the candidates differed on how big that savings account should be.

Sturman said he thought the borough could get by with as little as $1 million to $2 million and should meet crisis needs by borrowing from banks.

Swan said the borough needed to work within its means and noted it seems easy for public officials to pass large budgets because the money isn't coming directly from their pockets.

Pointing to the budget, Sprague said the fund balance currently is about $15 million, a "fairly healthy" amount. He did say he was concerned about the fund's downward trend, which means the borough still needs to rein in spending.

Fischer said he wasn't sure exactly where the level of the fund balance should be, but candidates suggesting the borough is going to "do all these things" need to understand that those things also would eat away at the fund balance.

Osterman said he runs his business on the balance on his books, not on what he has saved. He said it wasn't the function of government to set itself up as a business or a bank account.

The candidates were asked how they intended to vote on the various ballot propositions.

Proposition 1 asks voters to approve increasing the property tax exemption from $10,000 to $20,000 on one's primary home. All but Sturman supported passage of the proposition. Sturman said he opposes it because it would reduce revenues, which could lead the assembly to try to make that up by taxing elsewhere.

Sprague pointed out that some of what the borough might lose could be made up in what it gets to keep from oil industry property taxes.

On Propositions 5 and 6, which would increase the region covered by Central Emergency Services into Funny River and the Kasilof, Cohoe and Clam Gulch areas, requires those already in the service area as well as those in the proposed expansion area to vote.

Swan said he supported passage, as did Sprague. Fischer said he could "flip a coin," while Osterman said he was opposed to expansion of the service area. Sturman said he didn't have a say in the issue, although a check with the borough clerk's office indicates he would be eligible to vote on the issue because the proposition will appear on the Soldotna ballot.

Asked for specifics on where they would cut the borough budget, Osterman said he would not spend money on special programs such as the Arctic Winter Games. Fischer said he could cut funding to the Economic Development District and perhaps save money by having some school maintenance workers retire early. Sprague said he is on record as supporting various cuts already but said the assembly might look at consolidating the EDD and the Community and Economic Development Division.

Swan said he would look at all areas but said what is needed is to stimulate economic growth. Sturman said he would have the borough do only those things mandated for a second-class borough, roads, schools, waste management and planning.

"Everything else should be eliminated," he said.

Asked if the Kenai Peninsula Borough School District should consolidate more schools, all the candidates said no.

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