A divided Kenai City Council voted down the use of $250,000 for one-time payments to eligible city employees during the body’s Wednesday night meeting.

Up for consideration was Ordinance 3270-2022, sponsored by Kenai Vice Mayor Jim Glendening as well as Council Members Teea Winger and Deborah Sounart. The ordinance would have given some city employees a one-time premium payment of $2,000.

The total cost was estimated to be around $255,000 from the city’s general fund. Temporary employees would not have been eligible to receive the payment, nor would the city manager, the city clerk or the city attorney.

In proposing the bonus payment, the sponsors cited rising inflation and a lack of cost of living adjustment for employees within the current fiscal year budget.

“Although some inflation over the course of this fiscal year was anticipated, the levels that we have seen have far exceeded our projections,” a Jan. 26 memo from the sponsors to the council says. “If we had known during the preparation of this fiscal year’s budget that we would see inflation exceeding 6%, it is probable that we would have supported a (cost of living) adjustment effective July 1, 2021.”

Kenai City Manager Paul Ostrander wrote in a Feb. 8 memo to council members that rising inflation will “likely warrant” compensation increases for city employees in the next fiscal year, and it is not yet known whether the city will be able to do so by adjusting employees’ base pay.

“The financial capacity of the City to increase compensation through an adjustment of the base pay for employees for FY23 is unknown at this time, and Administration felt it was appropriate to consider an adjustment to compensation in the current fiscal year through a one-time adjustment to all eligible City employees,” Ostrander wrote.

Multiple members of the public voiced their opposition to the ordinance through comments submitted to the council via email and during Wednesday night’s city council meeting.

Kenai resident Christine Hutchison told council members that city employees are well compensated and enjoy leave and benefits, and that most private sector employees do not receive cost of living adjustment wage increases every year. Hutchison proposed using the money for something that would benefit the whole community, such as capital projects.

“I appreciate all the things that the city employees do … but I don’t think they’re any more exceptional than the people who have done all the rest of the stuff in the community to get the food on our tables, and get us taken care of in every little way that they do,” Hutchison said. “I just don’t understand singling them out for specific recognition just because we have some money.”

Former Kenai city council member Victoria Askin also submitted comments opposing the ordinance, which she said is a large expenditure that would impact a small portion of the city. Askin went on to say that council approval of a premium payment for some city employees would result in a loss of trust between Kenai residents and the city.

“Virtually every citizen of Kenai is experiencing the same increase in cost of living and most are not enjoying the generous benefits provided to our City employees,” Askin wrote. “All City employees have received full paychecks throughout the pandemic, plus enjoyed paid time at home if they tested positive for (COVID-19).”

Kenai City Council members were split on the issue.

Council member Teea Winger, one of the sponsors of the ordinance, said the payments would send an important message to city employees and help with recruitment, while also likening the payments to those distributed by the Kenai Peninsula Borough School District to staff. KPBSD used approximately $2 million in federal COVID relief funds to give members of the Kenai Peninsula Education Association and the Kenai Peninsula Education Support Association one-time payments of $1,500.

“We’ve asked a lot of our people, I think we’ve been mindful (in) navigating through this this entire time,” Winger said. “However, in the end, we need to be saying thank you. Thank you for sticking with us, thank you for believing in us, thank you for working for us.”

Council member James Baisden, who voted against the additional payments, said that the $250,000 is a significant amount of money that might be better addressed during the city’s upcoming budget work. Baisden went on to say that the council has previously worked to show support for employees during the pandemic, such as by approving additional COVID leave for city employees who test positive for COVID.

Council member Glenese Pettey, who also voted against the ordinance, shared some of the concerns raised by residents.

“I can’t just justify why city employees are more deserving of these funds — $2,000 each — than our city taxpayers working to make their ends meet in the same environment,” Pettey said. “I do not believe that the transfer of these unbudgeted taxpayer funds are warranted.”

The ordinance ultimately failed after a tie vote of 3-3, with council members Winger, Sounart and Glendening voting in favor and council members Baisden, Pettey and Mayor Brian Gabriel voting in opposition. Council member Henry Knackstedt had an excused absence for Wednesday’s meeting and was not in attendance. Wednesday’s full city council meeting can be viewed on the City of Kenai’s YouTube channel.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.