Editor’s note: This story has been changed to clarify the increase in Kenai’s health care costs and to correct the day of the budget work session.
The mill rate would stay the same and the city’s budget would increase by about $50,000 in the latest draft of Kenai’s fiscal year 2016 budget proposal.
In anticipation of the July 1 start date of the new fiscal year, Kenai City Manager Rick Koch and Finance Director Terry Eubank presented their recommended budget to four members of the Kenai City Council and the heads of the city departments during a Friday work-session.
Kenai’s administration drafted a budget of $25.7 million, an increase of $48,386 from the previous fiscal year. One new expense is a 1.40 percent cost-of-living increase to the payment of city employees, requiring the city to spend $176,403 on raised salaries and benefits. No change was proposed to the city’s current 4.35 mill rate — the amount of property tax taken from each dollar of a property’s assessed value, given in thousandths of a dollar.
Other increases were also related to staffing.
The administration included $12,846 in the budget to reclassify the city’s approximately 112 employee positions as recommended in a recent study by consulting group Ralph Anderson and Associates. The city’s classification scheme currently includes 58 classes that determine the skill requirements and pay rate of its employees.
The recommendations in the report result in $8,339 in employee pay increases and a $4,507 increase in benefits.
The draft budget also includes a $291,629 increase in employee health insurance, a growing expense that in last year’s budget sessions prompted a city mill rate increase from 3.85 to 4.35. This year, Kenai’s insurance provider Premera Blue Cross quoted a premium increase of $584,895 to renew its current plan.
The draft proposes switching to a different Premera plan, lowering the increase in expense to $318,876, of which employees will contribute 8.5 percent of the cost, resulting in the city spending an additional $291,629 on employee premiums. Other elements of the city’s health care plan, including a health reimbursement arrangement and a wellness program, create a total health care cost of $1.9 million, an increase of $323,213 from last year’s budget.
The draft budget also calls for three specific changes to city staffing: the creation of a new seasonal administrative assistant position to be filled during the summer in order to manage the personal use fishery; the elimination of a seasonal assistant animal control officer and the consequent increase in working hours of the remaining permanent Animal Control Officer; and allowance for two months in which the city accountant position will be filled by two people, in order to allow the current City Accountant to train a replacement before a planned retirement in October.
The draft budget gives $233,000 to capital projects including design of a fountain in Leif Hanson Memorial Park, cemetery improvements, repairs to First Avenue, and designs for improvements to Beaver Creek Playground.
According to a memo from Koch, the draft budget requires no decrease in the city’s general fund balance. It projects $25.9 million in revenue from taxes, fees, investment interest, state and federal revenue, and other sources, as well as incorporating $1.1 million in unspent money from last year’s budget. The draft budget would also gather more revenue from the personal use fishery by increasing parking fees at the city’s boat launch from $15 to $20, and launch fees from $25 to $40.
Kenai administration will put the proposed budget before the city council in an ordinance to be introduced at the next council meeting on May 20. The council will hear public discussion, propose amendments, and vote on adopting the budget at their meeting on June 1.
Reach Ben Boettger at firstname.lastname@example.org