The Homer City Council made some adjustments to the 2018 draft budget Monday.
The council approved .5-percent cost of living adjustment for city employees. The Employee Committee initially asked the council for a 1-percent raise, but council member Heath Smith expressed concern over the $90,000 move.
He said it would eliminate a portion of future savings the city gained after voters approved using a road-and-trail-construction fund to pay for road maintenance this fall, which will go into effect in 2019.
“Our budget is going up about $250,000 this year. If we add another $90,000 to that, where’s that? That’s $340,000. That eats up over half of that $660,000 in one act,” Smith said.
The city plans to use those savings on road maintenance to help fill a $1.2 million budget gap it will face in about a year.
The Employee Committee told the council in a report that Homer was roughly 5 percent behind other municipalities in Southcentral Alaska when it came to keeping up with inflation, and that it would also be hard to keep up with a roughly 8-percent hike in employee contributions for health care next year.
Smith said that the city’s pay scale should keep city workers’ pay in line with the cost of living in Homer while accounting for the increase in insurance premiums.
“They get raises, and there a number of employees that got anywhere from a 2 to an 8-percent raise this year, and I think that’s more than adequate to keep pace with any inflation, plus give them more,” Smith said.
Council member Tom Stroozas walked back the pay bump to .5 percent as a compromise, and the council unanimously approved the raise.
Mayor Brian Zak put forth the amendment and noted that he thought the 1-percent ask was reasonable.
”I agree with everybody can win, but I think everybody can win effectively at 1 percent, and I also feel like we’re being prudent with the city’s money at 1 percent and we’re being fair and reasonable to the employees,” Zak argued.
Most of the council spoke in favor of the increase and said it would help retain staff and attract experienced employees.
The council also directed about $670,000 from the city’s Health Insurance Fund towards a reserve for building a new police station. The Homer Public Library also saw $10,000 restored to its budget for purchasing new books, but those funds will be taken out of savings destined for the library’s reserve account.
The council is scheduled to finalize the budget during its regular meeting on Dec. 11.
In other business, the council also approved purchasing a piece of land on the Homer Spit from the Alaska Mental Health Trust Authority. The city has been in a dispute with Mental Health since 2013 over the boundaries of the lot next to the fish dock. Mental Health argues the plot stretches into the mouth of the harbor and has issued the city a trespass notice over the matter.
The city will purchase the land for about $550,000 to settle the dispute.