Kenai Peninsula Borough Mayor Charlie Pierce gives a borough update at a joint Soldotna and Kenai Chamber of Commerce luncheon event on Dec. 5 at the Kenai Chamber of Commerce and Visitor Center. (Photo by Victoria Petersen/Peninsula Clarion)

Kenai Peninsula Borough Mayor Charlie Pierce gives a borough update at a joint Soldotna and Kenai Chamber of Commerce luncheon event on Dec. 5 at the Kenai Chamber of Commerce and Visitor Center. (Photo by Victoria Petersen/Peninsula Clarion)

Borough reduced deficit by nearly $4 million

The borough had nearly $4 million less in deficit spending than projected, according to Borough Mayor Charlie Pierce, who was speaking at a Dec. 5 Joint Chamber Luncheon at the Kenai Chamber of Commerce and Visitor Center.

At the beginning of fiscal year 2018, which goes from June of 2017 to June 30, 2018, the borough estimated they would spend $4,152,291 more than they earned. Pierce said updated reports from fiscal year 2018 show the borough only spent $434,028 during that year.

The borough managed to spend less from a combination of federal money, state money and budget tightening on the local level.

“There were a lot of unanticipated gifts,” Pierce said at the chamber luncheon. “We can’t take credit for all of it.”

The largest reduction of the deficit came in the form of $3.1 million in federal PILT money, or payments in lieu of taxes.

PILT money is what the federal government pays as their contribution to area federal lands.

“It’s essentially a property tax,” Pierce said Tuesday.

An additional $1.2 million was saved through expenditure tightening and project fund rollovers. Pierce said the borough put a hold on everything and looked at every expense to help cut back costs. He said some of those savings came after borough employees retired, and their positions did not get replaced.

“Each one of the borough employees needs to be given credit for the savings,” Pierce said during his report at the Dec. 4 borough assembly meeting.

National Forestry receipts, revenue sharing with the state and an increase in sales tax revenues also helped offset deficit costs, Pierce said.

Despite all the savings, the borough appropriated an additional $600,000 in supplemental expenditures, which went toward the East Peninsula Highway Emergency Service Area program, the borough’s comprehensive plan, supporting the LNG project and hiring a compliance officer.

“We felt like we needed a seat at the table,” Pierce said about the LNG project at the chamber luncheon update. “We want to represent our borough residents to make certain that if decisions are being made as to whether it happens here or not, we wanted to participate. We had to pay some money and hire some lawyers and of course a compliance officer.”

Pierce told the chamber he was looking forward to hearing ideas from assembly members on how they can balance the budget at the fiscal year 2020 budget plan kick off on Jan. 9.

“We continue to spend more than we make in the way of revenues,” Pierce said.

In 2020, Pierce said the borough forecasts around $2.1 million in deficit spending.

“2019 will be very frugal as well,” Pierce said at the assembly meeting. “We’ll look for savings along the way.”

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