Kenai passes budget

Kenai will enter fiscal year 2017 — starting July 1, 2016 — with a $15,419,980 budget.

The Kenai city council unanimously passed the budget at its Wednesday meeting after council members successfully amended it to remove a $10,000 donation to a historic restoration project and a $5,000 donation to the nonprofit Central Area Rural Transit System (CARTS). Failed budget amendments would have removed a $35,000 allocation to design a bluff-top event park and dedicated $58,526 to give the city a full-time human resource manager.

Other financial measures taken up at the meeting included the approval of a $10 drop-off fee for the personal-use dipnet fishery and the establishment of a dedicated fund to cover the rising cost of city employee healthcare.


Council member Terry Bookey, participating in the meeting via telephone, introduced the proposals to eliminate the previously budgeted donations to CARTS and to former Kenai mayor John Williams’ project to restore a city fire engine from the 1940’s, as well as design money for a proposed outdoor stage in the lot known as Millennium Square near the Vintage Pointe Senior Center.

CARTS, a grant-funded transportation service, has also lost funding this year from the Kenai Peninsula Borough. In their May 17 meeting, the borough assembly eliminated a $50,000 donation to CARTS by a 6–3 vote. Assembly member Dale Bagely noted his dissatisfaction with CARTS’ leadership, and other community members have complained of CARTS mishandling a state funding application it manages on behalf of other non-profits. On Wednesday the Kenai council followed the borough assembly, removing the CARTS donation from the city budget with an objecting vote from council member Bob Molloy. Council members Tim Navarre and Mike Boyle were absent.

Bookey’s removal of the fire truck donation passed with opposing votes from Kenai Mayor Pat Porter and council member Henry Knackstedt.

“It’s not that I’m opposed to this project,” Bookey saidof the fire truck restoration. “In fact I applaud former mayor Williams for taking this on. I do, though, believe this is a project that should be funded through private funds and not through government funds… In uncertain times I don’t this should be a priority for our city included in the budget.”

Early this year a subcommittee of the Parks and Recreation commission planned to build an outdoor stage in Millennium Square, and the Kenai Council voted to dedicate $35,000 to develop detailed designs based on their work. Bookey said he didn’t “think the timing is right for this” given the state’s economic condition, and said the city should consider it in the future.

Gabriel, who had created and chaired the subcommittee that he said had spent about five months making plans for the stage, said the project would be valuable.

“I can see how Mr. Bookey might see this as something extra,” Gabriel said. “But I can see how this would provide an economic benefit over time for the city. That’s why it’s important — we need to look at diversifying and bringing people to the city of Kenai and having things for them to do, to have this as a destination, and this is a way to do that.”

Porter disagreed with Bookey’s opinion that the project’s timing was inopportune.

“I think it’s very important for us to move our city forward in the quality of life we offer our citizens,” Porter said. “I have not received one complaint about this $35,000… We will never have a perfect year with which to add everything to our budget. I’ve been on council a long time, and every single year, this is not the year. This is the year.”

The motion to remove the funding failed with council members Brian Gabriel, Knackstedt, and Porter voting against it.


Council member Bob Molloy proposed creating the new city job of full-time human resource (HR) manager while making the assistant to the city manager’s job a part-time position.

As it is now, human resource management is a part-time duty of the City Manager Rick Koch’s assistant, currently Christine Cunningham. Hiring a full time HR manager while making the assistant job part-time would cost $58,526, according to a memo by Koch.

Kenai has the equivalent of 116.30 full-time employees.

“I think we’re at the volume of work now where we should have a full-time HR specialist and administrative assistant,” Molloy said. “… I wanted to put that on the table as a discussion item and see what people think about that.”

Asked by council member Henry Knackstedt how much work there would be for a full-time HR manager, Koch said the job would be “an expanding gas kind of position” and he didn’t recommend having a part-time city manager.

“The reduction in the administrative support to the city manager position would have a significant effect in my estimation,” Koch said. “…The position we have now where we have the assistant to the city manager who is also involved in some land issues and HR issues certainly has a full workload. In the future, I think it is appropriate to look at how we manage it. If the council is to discuss this, I strongly recommend against a less than full-time assistant to the city manager.”

A motion by Bookey have both the HR manager and city manager’s assistant positions filled as full-time jobs — estimated in Koch’s memo to cost $84,901 — failed with Porter, Knackstedt, and Gabriel voting against. The motion for a full-time HR manager and part-time assistant initially passed with Knackstedt and Gabriel voting against it, but later failed when Porter called for a reconsideration and changed her vote to a “no.”

“I’m asking for reconsideration of this amendment because although I really feel it’s needed, I think this year it might be a little premature to make this happen,” Porter said.


Council member Brian Gabriel made a budget amendment to deal with a perennial expense increase: employee health insurance. He moved successfully to create a dedicated $100,000 fund for healthcare. The city currently pays for employee health insurance from the general fund, an expense that usually consumes around eight percent of the general fund budget, according to Gabriel’s amendment.

“The reason I proposed this amendment to the budget is that every year our healthcare premium costs come in late in the process of when administration is putting our budget together,” Gabriel said. “A lot of the time they’re sort of guessing at what that payment will be… This year when we have money that was allocated for the healthcare costs, and those healthcare costs don’t come quite as high, we should probably take some of that money and put it aside as a restricted fund to even out those years when we do have high costs.”

Later, Gabriel said, he intended to propose a council worksession to discuss the fund’s scope and how the city should contribute to it. A memo from city manager Koch recommends a 10 percent annual contribution rate until the fund has a $400,000 balance.

In the previous year’s budget, the cost of renewing the city’s healthcare with insurance provider Premera had increased 20 percent, although city administrators changed plans to avoid an initially quoted increase of 39.7 percent.

Since 2007, the city has seen annual changes in its insurance cost ranging from this increase to decreases of five percent, according to Koch’s budget memo. Kenai spent $1.6 million on healthcare premiums in the previous fiscal year.

Kenai Finance Director Terry Eubank said that creating the fund would not affect this year’s budget and wasn’t included in this year’s expenditures.

“A commitment of fund balance is not an authorization to spend funds,” Eubank said. “So we will not be increasing the budget… It’s simply council at its highest level — an ordinance — committing this fund balance for a future purpose. Prior to those funds being used, the council will have to take action again at the same level — an ordinance — to authorize your reduction of those reserves.”

Bookey said he supported the idea, but preferred to examine it in the future separately from the budget, since it would have no budgetary effect this year. He cast the only vote against the amendment.


A $10 fee for vehicles dropping dipnetters on Kenai’s beaches during the dipnet fishery was created via an ordinance suggested by city administration.

The ordinace text stated that 18.71 percent of the transactions in the 2015 dipnet fishery were made by vehicles that released passengers on to the beach without parking and paying the associated fees. A memo from finance director Eubank stated that charging these vehicles a $10 daily fee would produce an estimated $28,950 in new revenue, 25 percent of which is estimated to be paid by users with a Kenai zipcode.

Gabriel, speaking in favor of the fee, said “we’ve had issues in the past that seem to be increasing, where people are figuring out a way around not paying their fees to access the fishery while utilizing all the services provided.”

Bookey said the fee wouldn’t “eliminate that problem by any stretch, or even slow it down.”

“I think the people that are looking for a way around the system will continue to find a way around the system, and we’re going to shift the burden to other access points to the beach that don’t involve going through the fee stations,” Bookey said. “By that, I mean going through the neighborhoods. We’ll see Old Town Kenai and Meeks Trail with a higher utilization. You’ll see people parking at the end of South Forest Drive, dropping people off… All we’re going to do is push the drop-off to the top of the beach and impacting the neighborhoods adjacent to the fishery to a much larger degree than we already are.”

Knackstedt supported the fee.

“Mr. Bookey may be correct on what he’s stating there, but I don’t have a crystal ball,” Knackstedt said. “And I hope that if this passes that is something administration will be watching for, and we’ll take some action.”

The ordinance passed with opposing votes from Bookey and Molloy.


Reach Ben Boettger at

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