Six seeking borough’s top spot

Posted: Friday, September 30, 2005

Editor’s note: Candidate columns and answers to a Clarion questionnaire can be found on pages A-4, 6 and 7 in today’s paper.

Voters will choose a new mayor Oct. 4 and put the first new face into the Kenai Peninsula Borough’s top administrative position in six years.

After serving two full terms, Mayor Dale Bagley will step down the day the winner is sworn in. Borough law prevents mayors from running for a third consecutive term.

With six candidates in the race, the chances of a clear winner being declared by Oct. 11, the date the election results would be certified, are unlikely. To win the Oct. 4 election, a candidate would have to garner the majority of all votes cast, that is, 50 percent plus one vote.

If a winner emerges, he would be sworn in Oct. 17. If not, a runoff election would be held Oct. 25, with certification Nov. 1 and the new mayor taking the oath of office Nov. 7.

Running are Soldotna resident Ed Oberts, who has spent six years as Bagley’s assistant; Fred Sturman, of Soldotna, an active member of the Alliance of Concerned Taxpayers (ACT) and frequent critic of government spending; current Assembly President Gary Superman of Nikiski; former two-term state senator John Torgerson of Kasilof; Raymond P. VinZant, a retired businessman from Soldotna; and the former long-time mayor of the city of Kenai, John Williams of Kenai.

Government spending, tax policy and the fiscal health of borough coffers appear central issues in the campaign. Other issues include how to respond to the decline in oil and gas resources and the possible loss of the industries they support, the need for a new and steady source of natural gas, and how and whether the borough should support the tourism, fishing, logging, retail and service industries.

A frequent voice at assembly public hearings, Sturman often has argued against spending plans and tax proposals. Assembly approval of a yet-to-be-built emergency operations center in Soldotna and a scheduled 1 percent increase in the borough sales tax led Sturman, along with other ACT members, to mount successful initiative petition drives that led to two propositions on the fall ballot.

Proposition 4 would restrict the ability of the assembly to OK capital spending above $1 million without a public vote. Proposition 5 would roll back a scheduled increase in the sales tax and cap it at 2 percent. Moves to exceed either limitation would require approval of 60 percent of voters.

Those propositions have helped focus the campaign polemic on government spending and tax policy.

To varying degrees, the other candidates, too, have promised fiscally conservative administrations, but all said they would oppose the two propositions, warning their passage would seriously restrict the borough’s ability to function, could stall important infrastructure enhancement and maintenance projects, and could endanger funding to education (where sales tax revenues go).

Some candidates have questioned the wisdom of spending down the borough’s fund balance, the savings account of ready cash the borough maintains to meet unexpected or short-term expenses.

Borough financial advisors recommended a fund balance between $12 million and $22 million. The government’s policy was an attempt to lower the fund balance to the recommended range.

Over the past several years, however, a combination of factors largely out of the borough’s control put additional downward pressure on the savings account.

For one thing, the state Legislature ended municipal revenue sharing programs.

For another, the borough is currently facing the fallout of a questionable state policy adopted in the late 1990s. Using what turned out to be faulty assumptions, the Legislature justified halving the amount the state and its borough’s and cities were required to contribute to public employee retirement programs.

Those programs are now seriously underfunded to the tune of around $5 billion, and the Kenai Peninsula Borough, along with other municipalities, have been told they must meet unexpectedly large and growing local obligations to those programs over the next several years.

The most recent analysis of finances done by the borough Finance Department shows that higher-than-budgeted revenues and lower-than-budgeted expenditures led to an end-of-the-year (June 30) fund balance of just over $17 million, according to Finance Director Scott Holt.

Nevertheless, the borough not only stares at increasing retirement obligations, but also the possible near-future declines in tax revenues as the oil and gas resources in the Cook Inlet region dry up. Atop all that, the cost of virtually everything else is going up, including the cost of educating the borough’s school children.

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