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Like the Homer City Council, the Kenai Peninsula Borough Assembly -- and any municipal government getting state funding -- shares some nervousness over lower oil prices and subsequent declining state revenues.

"I think the biggest issue is these oil prices have dropped," said Kenai Peninsula Borough Assembly President Milli Martin, Diamond Ridge. "They did put money into savings, but is it going to be enough?"

At the assembly meeting Tuesday night, the state budget was a major topic in discussions with Rep. Mike Chenault, R-Nikiski, Rep. Paul Seaton, R-Homer, and Sen. Gary Stevens, R-Kodiak.

Martin said the assembly anticipates discussions -- and hopefully close attention -- from Gov. Sarah Palin regarding her proposed capital budget. The governor's budget may not fund borough capital projects the assembly has submitted in its priority list. That includes projects for unincorporated areas outside of Homer.

"I personally would like to address the governor on this issue," Martin said.

Martin said she was dismayed by Palin's veto last year of a $10,000 grant to survey the Caribou Lake trail so it could be moved out of wetlands onto drier ground.

"I really felt it was something the state owed these people," she said of Caribou Lake area landowners, many of whom testified in favor of the survey at a public hearing. "I think it was really unpleasant. To then veto that was very unfortunate."

Also on the assembly's to-do list is how and where to spend about $16 million in state grants for borough road improvement.

"They're looking at roads that tend to fall apart in the spring," Martin said.

A list of projects doesn't include all the projects Martin and fellow assembly member Bill Smith have asked for on the lower peninsula. The funding will pay for about 2.5 miles of improvements on East End Road from the school bus turn-around toward Voznesenka.

Financial impacts from the sales tax exemption for non-prepared foods won't be known for several months.

"How is that going to affect our collection of sales taxes?" Martin said. "That will clearly affect us. We have a new budget process. We have a new mayor."

Like the state, the borough is on a fiscal-year calendar cycle, and prepares its 2009-10 budget in early June, with the fiscal year starting July 1.

Martin would like the assembly to show the same forward-thinking of Homer when it adopted its Climate Action Plan. The borough has looked at improving energy efficiency in its buildings.

"We've pretty much done that, and now want to take it to the next step," Martin said.

That could include more changes, like moving to more energy-efficient vehicles in the borough's fleet.

Other new technology the borough could consider is improvements in communication technology. Martin will attend National Association of Counties meetings in March. She and borough clerk Johni Blankenship want to attend a technology summit to see how communication can be improved to outlying areas like Homer, Seward, Seldovia and Tyonek.

"We want to see what is available throughout the nation and see how other counties are dealing with this," Martin said.

Michael Armstrong can be reached at michaelarmstrong.@homernews.com.