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A half-million-dollar increase in sales tax revenue due to high fuel prices contributed to keeping Soldotna's bottom line in the black during 2008.

"We collected about $7.5 million in sales tax in 2008, so $522,000 is about a 7.5 percent increase from fiscal year 2007," said City Manager Larry Semmens.

Although the increase was mostly due to fuel prices, anything with a transportation cost figured into its price contributed, he said.

Looking down the road for this year, however, Semmens said he would not be surprised if sales tax revenue in 2009 is flat.

As other municipal administrators, Semmens is keeping his eye trained on the Anchorage Consumer Price Index, which he said was up 4 1/2 percent over the previous year.

"It's the highest CPI for many years," he said.

In the past 10 reporting years, the 4.6 percent increase was the first rise above the 1, 2 or 3 percent levels.

"We have not seen any fours," Semmens said, adding that was likely due to high fuel prices, as well.

Growth in the city of Soldotna is evidenced by a number of new businesses popping up around town as well as by the number of building permits issued by the city.

With the opening of new health care facilities such as Arctic Chiropractic and Phormation Chiropractic and the anticipated completion of the Glacial Sky dental office and the Fresenius Medical Care dialysis center, Soldotna's focus on the health care field is obvious.

Other new enterprises dotting the city's business district include a second Kaladi Brothers coffee shop, AK Rays tanning salon, a new C&C Glass shop inside the city limits and Reindeer Pause classic toys on the Kenai Spur Highway.

A commercial building permit also was issued last year to Tim Cashman for a $2.25 million, 26-unit apartment building on West Redoubt Avenue.

Commercial remodel permits were issued last year to the Dairy Queen and Alaska Digitel for a retail store on the Sterling Highway, and the Soldotna "Y" Chevron gas station.

Six public remodel permits were issued to Central Peninsula Hospital in 2008, including an $800,000 redo of the Imaging Department, $625,000 for a new roof over the remodeled Emergency Department and $214,000 for office remodeling.

Twenty building permits were issued for new homes in the Westgate Subdivision, though only four houses were actually built during 2008.

In all, the city issued permits for $13 million in either new buildings or building remodels.

When asked if the positive financial report means raises for city workers, Semmens smiled and said the city employees are in the middle of a three-year negotiated contract. Effective July 1, all will receive a 3 1/2 percent increase in pay.

Semmens also said the city itself has some large-scale projects ongoing.

"We're finishing the $3 million expansion at the airport and a $5 to $6 million project will be starting at Funny River Road," he said.

With the acquisition of private property last year, the city now plans to re-route Funny River Road at the northwest corner of Soldotna Municipal Airport and install city water and sewer lines almost to the east end of the airport lease lots.

He also said the bid is out for redesign of Soldotna Creek Park, and said, "The community playground is an exciting project."

In addition to a new super playground to be built by community volunteers at Soldotna Creek, the city plans to spend $95,000 to upgrade playground equipment in Farnsworth Park.

Phil Hermanek can be reached at phillip.hermanek@peninsulaclarion.com.