Members of the Kenai City Council got their first look at the city’s proposed budget for the upcoming year during a work session that lasted several hours on Saturday.
The meeting brought together the city’s various department heads for an in-depth look at the city’s spending plan for the fiscal year that starts on July 1.
The draft budget document presented to council members proposes no changes to the city’s property or sales taxes, which are 4.35 mills and 6%, respectively.
The budget document also incorporates recommendations and findings from a Classification, Compensation and Benefits Study conducted by McGrath Human Resources Group.
That study concluded Kenai should continue to prioritize the recruitment and retention of city employees.
That study found that the average city employee spends about seven years with the city. One in three city employees, the study found, is over the age of 50, meaning they will be eligible for retirement in the next decade.
The draft budget would increase the city’s base salary by 0.9%, slightly higher than the most recent change in Anchorage’s consumer price index.
For the upcoming fiscal year, the city is projected to bring in just over $19.5 million to its general fund, more than half of which will come from sales tax revenue. Another quarter will come from property taxes.
Nearly half of Kenai’s general fund — about 46.4% — is spent on public safety services, including police, fire and animal control. Another fifth of the fund goes to general government services, while the rest will go to public works, parks and recreation, senior citizens programs, capital projects and debt service.
The draft general fund budget also pays for roughly $721,000 worth of capital projects. Those projects include improvements to city streetlights, design work for improvements to the city’s emergency services building and a parks and recreation master plan, among others.
City Manager Terry Eubank wrote in an April 19 letter to council members that the proposed budget leaves an almost $270,000 surplus in the city’s general fund. He pointed to recent years of federal stimulus and a bump in tax revenue as allowing the city to support city projects.
“Over the last several years, a combination of Federal stimulus and tax revenue growth has put the City in a unique position to make overdue strategic investments in our aging infrastructure,” Eubank wrote. “This has provided long-term benefits while also providing financial stability by lessening the tax burden for our residents now and into the future.”
The final budget must be approved by members of the city council at a future meeting.
The City of Kenai’s draft budget document can be found on the city’s website at kenai.city.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
