Borough mayor has plans for new year

Posted: Wednesday, December 10, 2008

With the end of 2008 just three weeks away, it's time to start thinking about New Year's resolutions. Many will attempt to stop smoking, others will try a new diet, but the Kenai Peninsula Borough has a different resolution to uphold: finding a way to continue funding education at the current level once Proposition 1 takes effect.

Come Jan. 1, the 3-percent school-designated borough sales tax will be lifted on all non-prepared food items from Sept. 1 through May 31. Despite the loss of revenue, the school district can expect the borough to continue to fund its schools at the current level, said Borough Mayor Dave Carey at Tuesday's Soldotna Chamber of Commerce meeting.

Carey said he's not sure what effects the initiative will bring. Once the borough knows what those effects are, then evaluations and/or adjustments can be made, he said.

"It is not easy and it is not quick to implement such a law," Carey said.

Carey said the borough has a healthy fund balance that could be used to help the loss of revenue due to suspending borough sales tax. Though a reduction in the fund balance could affect property taxes, Carey said he's not close to making that determination. He also said borough revenue has exceeded what was anticipated.

Carey said one option of dealing with the loss of revenue due to Prop 1 is giving the assembly multiple budgets. Although cuts in services might be inevitable, Carey said borough residents need to be informed.

"Don't cut the budget unless you absolutely inform the people that a reduction in the budget means a reduction in services," he said.

He estimated $150,000 will be spent on mailing information to commercial entities on how to apply the initiative and another $60,000 spent on legal and financial staff.

Road maintenance was another major goal Carey said he hopes to accomplish.

"We are committed to getting our roads in better shape. Roads are the infrastructure that allow us to interact," he said.

The borough has about $2 million extra that was not budgeted. Carey said road maintenance is a priority for that money.

The extra funds came from the federal government. About $1.1 million of it comes from the $8.5 million the state of Alaska received in lieu of taxes. Because the federal government owns large portions of the state that's aren't taxable, it compensates by sending the state money, Carey said.

The other half of the extra $2 million came from a federal program called the "Safe schools and community self-determination project."

"It's a way of making sure that there is development on federal lands," he said.

The money is to be spent on industrial, commercial and recreational development on federal lands within the borough. This year the borough received $980,000 for the program.

Over four years the borough will receive more than $3 million for this project -- $900,000 next year, $800,000 the following year and $650,000 the year after that. Carey said the program requires that an advisory group be formed to determine how the money will be spent.

On the issue of beluga whales being added to the endangered species list, Carey said, "We are being asked to come up with a solution for a problem they cannot explain the cause of. As long as we don't know the cause, any solution can be imposed on us."

Carey said he does not plan on suing the federal government for listing the belugas but instead will spend resources on acquiring information on the cause of the decrease in their population and finding a solution to that cause.

He said he's not sure what the correct count of whales in Cook Inlet should be nor how the decrease in the population occurred. "I don't believe we can find the accurate number."

Mike Nesper can be reached at

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