Kenai passes $26 million budget

The Kenai City Council passed its $26.49 million budget for the upcoming fiscal year 2018 — to begin July 1 — at their Wednesday meeting, maintaining status-quo property taxes and raising some city fees.

The budget funds city operations with $15.53 million from the general fund, and spends $8.15 million from funds dedicated to specific purposes, such as the airport, water and sewer, and senior citizen funds. The largest expenditures from these funds were $2.8 million from the airport fund and $2.45 million from the water and sewer fund.

Kenai’s mill rate remains at 4.35 — meaning the city will collect $4.35 in taxes from every $1,000 of assessed property value. The mill rate was last changed in 2014.

Council members also voted to continue insuring their employees with Premera Blue Cross Blue Shield, the city’s provider since 2014, with a 12 percent premium increase from $1.6 million to $1.9 million. Along with a deductible increase, the city’s total healthcare cost will rise from $1.9 million to $2.1 million.

In addition to the spending, the council also voted to dedicate $1 million from the unassigned general fund balance to future renovations and improvements of city facilities.

Sales tax

Kenai’s finance department created the coming year’s budget under the expectation of declining sales tax revenue. In previous interviews Kenai Finance Director Terry Eubank anticipated a $400,000 drop in city revenue due to Alaska’s general economic downturn. With less than a month remaining in the present fiscal year, the present anticipated drop is less severe — about $300,000.

In a May 31 memo to the city council, Eubank wrote that he had initially expected a one percent year-to-year decline in Kenai’s sales tax revenue for the first quarter of 2017. But when the numbers came in, the quarter’s sales tax had a 0.88 percent growth.

“While not an absolute indication the slowdown in the local economy has ended, this is a positive indication,” Eubank wrote.

His current projection for FY2017 sales tax revenue is $10.83 million — still below the $11.13 million of sales tax revenue budgeted for that year. In anticipation of decreased revenue, the council removed $124,303 from its status-quo budget in February.

Fee increases

With the budget, council members voted on raising city fees. Increases to water and sewer rates, airport apron lease rates, and monthly rent at Kenai’s Vintage Pointe senior housing building are all planned annual increases meant to keep the fees equal to the market value of the services they support, as determined by various studies the city has commissioned in the past. Per a 2011 rate study of water and sewer service, this year’s budget contains a 5 percent increase in water rates, which will subsequently increase with the Anchorage Consumer Price Index, a measurement of the cost of living. Sewer rates this year will follow the Anchorage Consumer Price Index by rising 0.9 percent.

In the case of Vintage Pointe, some of its senior residents — many living on fixed incomes — have protested the rent increases in the past. As in the past, each of the building’s 14 different rent classes is increasing, the most — for an 826 square-foot apartment facing Cook Inlet — by $35, the largest annual increase allowable in the city’s plan.

Council member Mike Boyle said he opposed raising rents at Vintage Pointe. After council member Bob Molloy unsuccessfully moved for the council to vote on the Vintage Pointe rent increase separately from the other fee increases — a motion only he and Boyle voted in favor of — the fee increases passed with Boyle voting against them.

Deputy City Clerk now full-time

Molloy and council member Glenese Pettey also introduced a successful ordinance to upgrade Kenai’s deputy clerk position from a 24 hour per week part-time job to a full-time 40 hour per week job.

“The City Clerk’s office is a major point of contact and interaction of the public with their city government,” Molloy and Pettey wrote in a memo supporting the change. “The volume of business handled and services performed in the City Clerk’s office has increased significantly in the past several budget years, but the City Clerk has only 24 hours support by the Deputy Clerk position. A full time Deputy Clerk position will better support the Clerk’s Office in processing its work flow more timely, which is in the best interest of the City and the public served by the Clerk’s Office.”

Providing the full-time deputy clerk with increased salary and benefits will cost an additional $35,067. Council members unanimously approved the change.

The position of Kenai’s city clerk has been vacant since May 17, when the council voted to end the employment agreement of former Kenai City Clerk Sandra Modigh. Council members discussed Modigh’s performance in an executive session on May 3, but did not publicly speak about their reasons for releasing Modigh. Council members Boyle, Molloy, and Petey voted against doing so.

The clerk’s duties have since been in the hands of former deputy clerk Jamie Heinz. On Wednesday the council approved a plan to hire a new clerk by early August.

Future budget action

At its next meeting on June 21, the council is scheduled to vote on an ordinance that would appropriate $488,000 for capital projects included in the fiscal 2018 budget, including $120,000 to replace boilers in the public safety building and $250,000 to expand the Kenai Municipal Cemetery.

Reach Ben Boettger at

More in News

Alaska Native illustrator Michaela Goade became the first Native American or Alaska Native to win the Caldecott Award on Jan. 25 for her work on “We Are Water Protectors,” about the defenders of Standing Rock Reservation. (Courtesy photo / Sydney Akagi)
‘It just feels very surreal’: a Q&A with Southeast’s recent Caldecott Medal winner

The prestigious award for her illustration work tails her Google Doodle being featured in December.

The Kenai Peninsula Borough administration building photographed on Tuesday, March 17, 2020, in Soldotna, Alaska. (Photo by Victoria Petersen/Peninsula Clarion)
Top priorities for CARES funds include businesses, nonprofits, seniors

The borough allocated its nearly $37.5 million in CARES Act dollars toward 24 different projects

Staff, lawmakers and members of the press gather for the first Senate Judiciary Committee meeting of the 32nd Legislature on Wednesday, Jan. 27, 2021. While Senators moved ahead with work, the House of Representatives was once again unable to organize. (Peter Segall /  Juneau Empire)
Deadlock continues as senators forge ahead

Only one member of the House Coalition — a 20-member group of mostly Democrats that also includes independents and a Republican — attended Wednesday’s floor session.

COVID-19. (Image via CDC)
Borough positivity rate drops below 1%

Four new cases were reported on the peninsula, all in Seward

State officials brief members of the media on Tuesday, Jan. 26 in Alaska. (Screenshot)
1st case of UK COVID variant announced

The variant was detected in an Anchorage resident who tested positive last month

President Joe Biden answers questions from reporters in the South Court Auditorium on the White House complex, Monday, Jan. 25, 2021, in Washington. (AP Photo/Evan Vucci)
AP sources: Biden to pause oil, gas sales on public lands

Environmental groups hailed the expected moratorium as the kind of bold, urgent action needed to slow climate change.

Clayton Holland
Holland to be next superintendent

The board unanimously supported Holland, who will take over from O’Brien later this year

This photo shows a sign marking the Division of Motor Vehicles office in the Mendenhall Valley area of Juneau. Department of Administration Commissioner Kelly Tshibaka announced Monday that she was ordering a review of Division of Motor Vehicles’ processes to determine how plates reading “3REICH” were issued. (Ben Hohenstatt / Juneau Empire File)
State to investigate issuance of offensive license plate

Division of Motor Vehicles plans to investigate the issuance of “3REICH” personalized license plates

Most Read