By Rodney Dial
September 26, 2006
On 9/25/06 I presented the case against consolidation to the Ketchikan Chamber of Commerce. My Power Point presentation focused on the three main areas that will result in massive spending increases for the community should we vote to consolidate.
Those areas are:
1. PERS cost increases due
The following is a brief overview of that presentation. It is edited for Power Point, so it may be difficult to read. If you need additional information on any specific area please email me at thedials(at)kpunet.net
Research into this topic included:
"As of December
31, 2003, the City
had 21 funds (including KPU) totaling $29,632,000; two
The current number of City
and KGB employers (FY06-07) is slightly higher.
122 Ketchikan Gateway Borough
Difference of 14.55%
"The City of Ketchikan
recognized up to a maximum of 25 years of past service for covered
employees at the time they began participating in the PERS. In
addition, the City allows up to a maximum of 5 years past service
for certain employees who were covered with IBEW but transfer
to a PERS covered position. The costs associated with past service
drive the contribution rates up considerably as contributions
were not being made to the system during the time this service
was being earned. The Ketchikan Gateway Borough did not recognize
past service for covered employees."
From the consolidation petition.
"Duplicate City and Borough positions have been programmed for the higher of the City or Borough salary and the three-year budget assumes full staffing for all positions."
"The Municipality of
Ketchikan will enter into a new Public Employees Retirement
Per the State of Alaska, if you move employees into the higher of the two plans, you will at a minimum pay the current, highest PERS contribution rate.
So what does this mean?.....
The PERS costs for 114 employees will increase by at least 14.55% after consolidation. This means that for every $100 of payroll paid to the employee, the increased cost to the taxpayer is $14.55.
But it doesn't end there
The KGB pointed out that there may be a dichotomy between wages of IBEW represented employees from the City and the Borough and these differences would need to be addressed. (Source consolidation document)
The only way this dichotomy will be addressed is by contract negotiation should consolidation pass.
Information obtainable from the KGB and City indicates that the borough labor force is, on average, paid between 15% to 30% lower than the cities labor. KGB officials will tell you that although wages are lower, some benefits such as health care are better. For example some Borough IBEW employees do not have to pay anything in the way of payroll contribution for insurance. This has allowed the KGB to keep salaries lower by providing better benefits.
You are going to face a situation where borough employees will want the pay of their city counterparts, and some city employees want the benefits of their borough counterparts. They will use the aforementioned statement in the consolidation document as the legal basis to obtain those pay increase and benefits.
Also, per the State of Alaska,
Department of Administration, the new municipality will have
to pay the cost associated with the work the State will conduct
regarding entering into a new PERS agreement with the State.
This cost has not been factored into the proposed 3-year budget of the consolidated municipality.
The transfer of services from the State to the local level
This is taken directly from the Consolidation document that we will vote on
Part 7. Whether the Proposed
Consolidated Borough Serves the Best Interests of the State
3 AAC 110.065. Best interests of state. In determining
whether incorporation of a borough is in the best interest of
the state under AS 29.05.100(a), the commission may consider
relevant factors, including whether incorporation
If we consolidate the State
will transfer services to the local level. Some of those
services include public safety and road maintenance. It has happened
in other consolidated communities such as Anchorage, Juneau and
Sitka, and will happen here.
This is one of the reasons that the per-capita tax in Juneau is significantly higher than in Ketchikan. Consolidation has cost them millions due to service shifting alone. Sitka is no different.
Here is what Anchorage went through..
Insert (4) Anchorage Daily News articles.
BOTTOM LINE EXTRA COSTS ---MILLIONS---
Complicated but the concern is basically this..
"The recently passed
Cruise Ship Tax potentially creates a huge impediment to the
consolidation effort. To wit: the unconsolidated borough may
have the opportunity to receive over $2 million in revenue from
Why is it reasonable to expect that consolidation will do something positive for Ketchikan that it has not accomplished for Juneau and Sitka?
Insert slides showing per capita income, housing affordability, avg. rent, construction costs, local taxes.
Please vote no... we simply can not afford it.
Education is when you read the fine print. Experience is what you get if you don't - Pete Seeger "singer and composer"
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