Kenai City Hall on Feb. 20, 2020, in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Kenai City Hall on Feb. 20, 2020, in Kenai, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)

Kenai looking to boost revenue, spur investment

The conversation started with a discussion on the city’s budget.

The city of Kenai it keeping itself busy. Kenai Mayor Brian Gabriel and City Manager Paul Ostrander presented a State of the City address at Wednesday’s Kenai Chamber Luncheon, and walked the audience through everything the city is focused on — from looking at cutting costs within city hall to new incentives for local business owners.

Gabriel started the conversation with a discussion on the city’s budget. On the revenue side, about 54% of money coming into the city is from sales tax revenue from the 3% sales tax inside the city. Gabriel said there has been a “steady upward trend” in sales tax revenue.

“We’re seeing growth in that regard,” Gabriel said.

He said the city saw $244,238,321 in total taxable sales for the city of Kenai last year.

“That kind of number, that’s significant spending within the city,” Gabriel said.

The city is also working with the borough, and other municipalities across the state, to collect sales tax revenues from online vendors. Some of those vendors, like Amazon and Netflix, already collect sales tax and send it to the city. The effort to collect from all online vendors will formally launch in April.

When it comes to the expenditures side of the budget, Ostrander said the city is constantly looking at ways to be more efficient. Last year the city started an efficiencies initiative, which asked employees to evaluate their every day tasks. In the first year of the initiative, Ostrander said, the city produced a one-time savings of $29,000, annual savings of $63,000 and more than 1,000 employee hours.

“All city employees are essentially asked to look at how they do things, why they do them that way and if there’s some way they can do them better,” Ostrander said.

Ostrander said the city’s clerk found a more effective solution for delivering webcasts and video archives to the public, resulting in an annual $17,000 savings for the city.

Deferred maintenance continues to build up on city properties. The city has been able to fund about $400,000 annually in capital projects on their own, but with shrinking state assistance, the city will need to find more revenue to address maintenance needs.

“We’re going to continue to strive for efficiencies and we’re going to make cuts where we can, but additional revenues are going to have to be part of the solution,” Ostrander said.

When it comes to public safety, Gabriel said the city is addressing issues with recruitment and retention at the Kenai Police Department. He said the city council worked to offer more incentives to incoming officers. Two new officers were sworn in last week, Gabriel said, and one vacancy remains.

“This will be the first time in quite awhile that we will be fully staffed,” Gabriel said.

The city’s airport remodel is winding down. The work was projected to end in January, but weather and other factors have slowed the progress. Gabriel said the airport’s siding is going up soon.

Ostrander highlighted some new incentives for entrepreneurs looking at developing their business in Kenai, including no lease payments for up to five years and potential lease-to-own contracts. The city has more than 300 parcels of raw land available. Ostrander said the city is developing a business guide that locals can pick up to learn more about the specifics of setting up shop in the city. Most of the parcels are located in the “core business area of Kenai,” around the airport.

“One of the city’s biggest assets is our land inventory and we’re committed to utilizing those lands to spur responsible economic growth,” Ostrander said.

The audience also got an update on the city’s No. 1 capital priority for the last 30 years: the bluff erosion project. The city is waiting for approval from the federal government. Ostrander said the city is hopeful they will see that approval in the “very near future.” The project is contingent on federal funding as well as a $5 million match from the city. The project, which will harden the rocks on a 1-mile stretch of city-owned bluff to prevent further erosion of Old Town Kenai, could begin as early as next year. However, Ostrander said it could be a couple of more years before the city sees the project started.

“It is likely this project will slip into 2022,” Ostrander said. “But we are making consistent, albeit much slower, progress than we have hoped. We are closer than we’ve ever been.”

The city officials invited the audience and public to attend their Invest in the Kenai event. The event will feature a presentation about the city and its budget and take feedback from community members. Invest in the Kenai is 6 p.m., Tuesday, March 10 at the Kenai Senior Center.

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