At this week’s joint luncheon for the Kenai and Soldotna chambers of commerce, two of the mayoral candidates for the Kenai Peninsula Borough — current Mayor Charlie Pierce and Linda Farnsworth-Hutchings — answered a series of questions related to the upcoming election and made their pitch to Kenai Peninsula business leaders as to why they should be elected. Troy Nightingale, who has also filed as a borough mayoral candidate, did not participate.
The mayoral forum was hosted at the Kenai Visitor and Cultural Center and moderated by Merrill Sikorski. Sikorski asked both candidates a series of questions that were submitted ahead of time by chamber members. Candidates also had the opportunity for opening and closing statements.
What ideas do you have to lead the borough’s economy forward out of the COVID-19 pandemic?
Pierce: Well, that’s certainly a big challenge. I was the individual that took the lead in March. The very next day after the governor reduced some of his mandates, I was out on the streets saying that I believe we’re all essential. And I don’t believe one business is more important than the other.
You know, I want to say that this chamber opened up today and hosted a meeting and perhaps you can host the next assembly meeting here. I believe we’re open for business, and I believe that’s the best way to save our businesses is to continue to keep government off the backs of individuals in the way of taxation and the growth of government. Real jobs are created in the private sector, and I support that.
One of the ideas that we came up with during my term is the tax relief for Agrium. We worked with Agrium and the energy group out there to try to bring the fertilizer plant back. They would get a 50% tax reduction for five years. That’s an example of some of the things I’ll work on.
Farnsworth-Hutchings: You know, I have been visiting up and down the peninsula as far north as Hope and as far south as Kachemak City and Homer. And there are a number of opportunities in all of these communities, and they are not opportunities that cannot be handled during COVID. So, this is something that each community is very invested in: getting back to work. And they are getting back to work by social distancing and being respectful of others. And I think that there are so many opportunities that can be enhanced that have been left by the wayside, and I would hope to be able to handle that.
What specific areas of the economy have suffered the greatest impact, and what can the borough do to help recovery?
Farnsworth-Hutchings: Well, I’ll tell you. It’s the restaurants. It’s the small mom and pop stores that have nobody coming in to buy their (products), you know, whether a pottery business or clothing, all of them have had to shut down because we just haven’t had the responsible distancing and respect that needs to happen in this particular situation. And it’s very, very hard on these small businesses. So I was excited to see the cities really picking up the small business grants, the nonprofit grants because these are all people that need it. They are hurting and if we expect to be able to come out of this, we’re going to have to buckle down and help.
Pierce: Well, you know, you had 90 cruise ships that didn’t show up in the ports of Homer and Seward, and you didn’t have all the buses that bring the tourists down. The trains didn’t run. Significant impacts on our borough. We had projected somewhere between a 5 and 15% decrease in sales tax (revenue), and today it looks like it’s going to be somewhere between 3 and 8%.
I believe that was related to the message that we were sending here through the tourist season, that we were open for business. Trying to invite folks down so that they could partake and go into the small stores and shops and have that exchange of business with those folks.
I’ll continue to promote that and work to make sure that we are open. Cruise lines are important, and I will be reaching out to them and seeing what their plans are to recreate that opportunity into our ports. Ports and harbors are a big opportunity for us. The fishing industry is a big opportunity, and you know, we just didn’t have the tourists this year.
Do you anticipate increases in the Kenai Peninsula Borough School District funding due to the extra resources needed for distance learning? And what’s your position on education funding overall?
Farnsworth-Hutchings: Well, I’m very strong on funding for education, and I was looking at the 2021 fiscal year budget, and we are flat funding again. In fiscal year 2018, we gave $38 million to the school district basically as a check. This was not the funds for maintenance, which, the borough owns the school buildings so of course we maintain them. But this year it’s set to be $38 million again, so we’ve been flat funding for a number of years and we need to look at that, because we are having a lot of additional costs now that we are dealing with COVID.
Pierce: I would say that my administration has supported education funding. The cap is at $52.7 (million). Last fiscal year we gave the $50 million and it was an agreement where we sat down with the school board, the school administration, leadership on the assembly as well as administration leadership, and we all worked together to come up with that $50 million funding level. And that was primarily due to COVID.
In the budget I had prepared, I had $52.7 (million) in February. February came and went, March showed up, and COVID showed up. And it quickly changed our ability to pay. I’ve always been an individual that puts budgets together with revenues and expenditures needing to balance as close as possible. All of us need to do our part to rein in spending, and we’ve done that on the administrative side of the borough.
The borough has worked very hard to cut costs and save where we could. Again, the range has been $49.7 to $50 million. I fully funded them in 2019, and the cap is $52 million. So I would try to get as close to the cap as I can, but we’ll have to take a look at the numbers.
What would you like to see as the borough policy for COVID-19 vaccinations?
Pierce: Well, our OEM department is working on the plan right now. We’re planning for the arrival of a vaccine, and what we will do and how we will communicate that to the public. They’re drafting those policies and that information at this time.
What would I like to see? You know, I’m tired of COVID, frankly. I know you are too. I think that all of us have heard the safeguards to it. You can see the numbers, you can see the modeling, and really that’s where I’ve been with COVID from day one. It’s looking at the modeling, looking at the health care providers that provide the modeling, and then making decisions based on those numbers.
You know, I looked at the numbers this morning. We had one case yesterday. This last two weeks we’ve had, you know, four was the most we’ve had (in one day) over the last two weeks. So I would say that we’re managing things, we’re watching things, and we’re responding responsibly to the numbers and the mandates.
Farnsworth-Hutchings: When and if we get this vaccine, I would like to see that people would have the choice. If they decide they want to take and use the vaccine that would be fine, but I don’t think it’s something that the borough can mandate because we have no health care powers. So there’s not something other than suggestions that we can do.
Are there any issues that you feel need to be addressed in our hospital service areas?
Farnsworth-Hutchings: We just had a change in boundaries for South Peninsula (Hospital), and I think they have felt like they accomplished what they needed. They pulled in some outside areas that were using the hospital but had not been paying for the service area before. As far as the central peninsula, I think we are doing fine. We have, I think, less than .02 mills and the only thing we support (financially) is having to do the audit. The hospital is self-sustaining, so I don’t see any real change there.
Pierce: I think our hospitals have handled the expansion and the development of technology responsibly. Some good news is that we’ve purchased through the CARES Act money a device similar to what they use for testing COVID in Fairbanks and Anchorage. We purchased the same machine. It’s a half a million dollar machine and can do up to 400 tests a day, and as I understand it we’ll be receiving that device here real soon and installing that as well.
But I think our hospitals, both of them — we’re putting a CT scanner down in South Pen right now and we’re making some renovations there as well — provide very favorable treatment. You can stay here, you can stay at home, and we have some of the best doctors in the world living right here among us, and I think we should all be very, very proud of our hospitals.
Do you predict that there will be any tax increases in the next three years to deal with the impacts of the pandemic? Which ones would you support, and which would you oppose?
Pierce: What I would say is that we had fund balance to carry us through this event. In February, as I mentioned, we had a different plan on the wall. We were actually doing some expansions, and had plans to hire some folks in emergency services, a much-needed labor force that needed to be hired, and those plans were put on hold.
When March showed up, you know, we struggled. We are required — we’re taking our fund balance down and it’ll probably get somewhere around $10 million at the end of 2021. Fund balance requirements say that within three years you have to bring it back. What’s required to bring it back is about a 1.1 mill rate. We’ve asked to use some of the federal funds that we had with the CARES Act money, about $5 million, to offset some of those sales tax revenue shortages to carry us through the next three years. We’ve yet to receive that approval, but we’re holding it for that purpose. If we don’t get those funds, we’ve got a three-year plan that brings us back up to about $17 million in three years at 1.1 mills.
Farnsworth-Hutchings: I really don’t like to see an increase of 1.1 mill. Right now we are sitting at 4.7, and that is .2 mills higher than what we started at in 2018. So this would be bringing us up to 5.8, that is pretty heavy to be putting on the property owners. And the thing is they’re all suffering. Whether it’s a small mom and pop store, whether it’s a hunting lodge, whether it’s a fishing guide, these people do not have the money to pay that much. I would just be looking very strongly at this budget and I will tell you honestly, as I have done before, I would always rather see an increase of maybe half a point on sales tax because it doesn’t just hit the property owners that hard. It hits every tourist that comes into our area, and by tourist I mean Anchorage people and Alaska people that come here, and it’s a great way to do it.
