Homer, Alaska - Oped - Council should cut discretionary spending first 11/05/08

Story last updated at 4:50 PM on Wednesday, November 5, 2008

Council should cut discretionary spending first

Mike Heimbuch

When it comes to health and public welfare, nothing is more important to a city than water and sewer. Our water and sewer system is listed in the Homer city budget as an enterprise fund meaning it is to be self-supporting.

But we are finding out that some of our assumptions about efficiency through growth and our ability to control costs for this system are in error. We are finding that our accounting of sales tax receipts dedicated to the Homer Accelerated Sewer and Water Program is flawed. It is difficult to build a defensible rate structure under these circumstances.

For next year's budget the city manager suggested a water-sewer rate increase on the heels of a terribly controversial rate change one year ago. He is suggesting the public pay for increased costs of a system over which they have had little control only the city council does.

If this goes down in unpopular political flames, the manager's next move will be an accounting finesse. He will ask that sales tax money from the HAWSP program be used to help fund depreciation and operation when it was set up expressly to provide only for new construction leading to system density that would make the water-sewer program self supporting.

That move by the manager would be a repudiation of all the municipal accounting standards developed to make cities sustainable without begging from the state and feds. It will eventually destroy our construction savings account and ruin our ability to achieve sustainability.

This approach is happening now for one political reason: The manager doesn't want to cut discretionary spending for non-core activities of the city. He is proposing a highly subjective solution in the guise of objective professionalism accorded to a city manager.

The minor cuts suggested for the museum and non-profits through the Homer Foundation are a fraction of how much we pay for non-city functions.

When non-city resident support of Homer dropped so dramatically with the elimination of food sales tax, the city must respond accordingly. We support non-city residents with our subsidy of Community Schools, the West Campus, Boys and Girls Club, the Homer Foundation, the airport facility, the Homer Chamber of Commerce and the Pratt Museum. Like them as we may it is not an essential or critical function of a city government to pay for them. They must begin paying their own way.

In 2009, the city will have about $1.7 million less in the treasury than 2008. This is from increased fuel and electrical costs, sales tax elimination on food items and a downturn in economic growth. This may not seem like a lot within a $20-some-million budget, but it has a huge impact on the amount of discretionary money we have.

How we address this problem is critical. It means seriously prioritizing city services.

Before the citizens of Homer allow the manager and council to mess so drastically with something so important as water and sewer, tell them to cut discretionary spending and use that money to help pay for the water-sewer system. All citizens benefit from the municipal water system even if they aren't hooked up to it directly.

Just say "no" to the rate increases and accounting changes. Keep growing the water-sewer fund to provide for increased density construction, so we can be self supporting.

It's time to tell the city to give up what we want before we give up what we need.

Mike Heimbuch is a longtime Homer resident and a former member of the Homer City Council.

Homer Alaska - Oped -