The Homer City Council voted down an ordinance Monday that would have required the city manager to take inflationary pressures on the budget and the cost of living for employees into account during the budgeting process.
The ordinance would have required the city manager to present the council with an overview of the Anchorage Consumer Price Index from the previous year, the only city in the state where inflation is tracked. The city manager would also be required to track cost-of-living raises given to city employees in three nearby communities.
Council member Heath Smith opposed the ordinance. He said Homer’s budget and finances differ widely from other communities in the borough.
“We have no idea what's going on throughout their budget,” he said. “So for us to isolate that in a vacuum and then say that that's not going to be used as somehow a leverage point for our decision making. I just don't see that as the case. I think that's exactly what is trying to do. It's trying to leverage us in a position to compare and react to that information.”
He pointed to the city's current policy on employee salaries. The policy states data comparing city employees' salaries to workers in other municipalities can guide changes to the city's salary step increase plan that outlines when employees receive raises.
Smith worried the proposed policy would compromise the council's discretion when it comes to cost-of-living adjustments for city workers. The council did approve a .5-percent adjustment for all city employees in the 2018 budget. The city's Employee Committee initially requested a 1-percent raise on top of any pay increases individuals may have received, and the committee argued that the city was far behind other municipalities in Southcentral Alaska when it comes to keeping up with inflation.
Council member Smith pushed back against last year's cost-of-living adjustment and said Monday that City Manager Katie Koester's budget recommendations are comprehensive.
“She evaluates all the recommendations that come to her from her department heads as far as wage increases through the step increases, and she ultimately looks at the budget in an entire piece of pie and determines if we can sustainably offer that during that year in regard to everything else that's going on.”
But council member Rachel Lord, who sponsored the ordinance, disagreed. Lord says the Employee Committee reached out to her about factoring cost-of-living adjustments into the budgeting process, and that she worked with the committee and Koester on the ordinance.
She says the measure would have provided the council with valuable information during the budget cycle.
“This change I believe is really one that provides the council into the future with a better overall context to be making those decisions,” she said. “This really gives us more information and better context for making good sound budget decisions which ultimately that responsibility starts with administration but it ultimately ends up in our laps.”
The ordinance failed in a three to two vote, with council members Donna Aderhold and Lord voting in favor of passing the ordinance.
