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Assembly talks about changes to compensation

Posted: April 2, 2014 - 4:36pm

The Kenai Peninsula Borough Assembly discussed changes to its budget and considered changes to members’ compensation at its Tuesday meeting.

While an ordinance sponsored by assembly member Brent Johnson and a substitute sponsored by assembly member Bill Smith were both up for public hearings, an enacting vote was postponed to allow for additional public comment. 

Johnson’s ordinance aimed to cut back assembly compensation to save an estimated $97,100 annually. The ordinance proposed to cut health and life insurance and Internet and vehicle allowances. To compensate for some of those cuts, the ordinance proposed a higher monthly allowance for members.

“I know this is hard to talk about, but so what, a lot of things are hard to talk about,” Johnson said. “I certainly have sympathy for people who need this money. It’s always hard when you’re wanting to cut a budget.”

Since 2000, assembly members have had the option to receive compensation for:

• A monthly allowance of $400 for members and $500 for the president;

• Mileage based on the current Internal Revenue Service rate;

• A vehicle allowance of $150 or $250 for members representing the south and east peninsula and Homer;

• An Internet allowance at $25 per month;

• Portable computer devices and;

• Health and life insurance at the same level as borough department heads. 

Members may choose to not receive any of the allowances and benefits.

“I argue that it seems a bit generous to me getting both paid 56 cents a mile to drive my car and then to get a car allowance as well,” Johnson said. 

He said people own cars and have Internet access before being elected to the assembly, so the public doesn’t need to pay for those items.

Health insurance costs about $18,600 annually per assembly member. Johnson said because assembly members aren’t full-time employees, they shouldn’t receive full-time healthcare. Since not all members receive health insurance through the borough, Johnson said the estimated $97,100 in savings would not be fully realized if the ordinance is enacted.

The ordinance proposed to increase monthly stipends for members to $875 and $1,000 for the president. He said if the members are going to give up health insurance, they should receive a higher monthly allowance.

Assembly members Wayne Ogle and Charlie Pierce agreed with most of Johnson’s points.

“I think it’s time to shift,” Pierce said. “I think the compensation package should be a flat fee, whatever it is.” 

Assembly member Mako Haggerty said he thinks the compensation is fair.  “It’s nice to know that somebody respects my time and is compensating me for it,” he said. 

He said offering compensations opens the assembly for a more diverse body. 

Because member compensation has not accounted for inflation during the past 14 years, Smith proposed a substitute ordinance that would not make any cuts to compensation and would increase monthly allowances by 40 percent — the amount of purchasing power the monthly stipends have lost. The substitute also called for the allowances to be revised annually by the percentage change in the Anchorage Consumer Price Index. It also called for effect to take place on Oct. 15, 2016, so if enacted changes wouldn’t affect seated members. 

Smith agreed with Haggerty’s view that the compensation might entice others to run for their district’s seat.

“Maybe some younger folks from a different slice of the community would feel that they had adequate compensations for the time that they would have to spend here,” Smith said.

Smith moved to amend Johnson’s ordinance with the substitute.

Before the vote on the replacement, assembly member Dale Bagley moved to amend Smith’s substitute ordinance to remove the yearly change to the monthly stipend, according to the index.

The assembly unanimously passed the amendment to the substitute.

The assembly then voted to amend the Johnson ordinance with the Smith amended substitute. Johnson, Ogle and Pierce cast votes against the change.

Smith moved to postpone the enacting vote on the ordinance as amended with the amended substitute until the next council meeting at 6 p.m. on April 15 at Seward City Hall in Seward. 

Kaylee Osowski is a reporter for the Peninsula Clarion.

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