Kenai City Manager Paul Ostrander (left) and Kenai Mayor Brian Gabriel present their 2021 “State of the City” address on Wednesday, March 3 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Kenai City Manager Paul Ostrander (left) and Kenai Mayor Brian Gabriel present their 2021 “State of the City” address on Wednesday, March 3 in Kenai, Alaska. (Ashlyn O’Hara/Peninsula Clarion)

Kenai saw increase in sales tax revenue in 2020

The city saw growth all four quarters in 2020

Kenai Mayor Brian Gabriel and Kenai City Manager Paul Ostrander offered a hopeful outlook for the City of Kenai’s future during their 2021 “State of the City” address, which they presented Wednesday at the Kenai Chamber of Commerce and Visitor Center.

In his opening remarks, Gabriel noted that at last year’s State of the City address, he and Ostrander had prepared to answer questions about a novel coronavirus that was starting to alarm people in the United States. Nobody asked them questions about COVID-19 at that event, Gabriel said. National lockdowns began nationwide a few weeks later and the city quickly entered a period of uncertainty.

“I think looking back, honestly, I think the city’s response was actually cautious but measured,” Gabriel said. “We reacted, but we didn’t overreact to what was happening with COVID.”

That same month, the city received financial assistance via the federal CARES Act. In total, the City of Kenai received about $10.4 million, including $7,700,832 from the State of Alaska and $2,675,524 from the Kenai Peninsula Borough.

Most of that money was allocated by the city to different relief programs, including $3.7 million in grants to Kenai businesses and nonprofits, $1.1 million in housing assistance to residents and $48,000 in grants to Kenai commercial fishing permit holders, among others.

In partnership with the Kenai Chamber of Commerce and Visitor Center, the city is currently offering two financial incentive programs for people in Kenai. Their “Shop Here All Year in Kenai” shop local program aims to incentivize shopping at Kenai businesses by awarding people who spend $100 or more on discretionary items with vouchers to spend at participating businesses. The other is a matching program through which the city will match payments of $100 or $200 made on groceries or necessary household goods at grocery and convenience stores in Kenai.

Ostrander said Wednesday that 2020 was a strong year for the city for sales tax revenue. City revenue increased by 5.71% in 2020 from 2019 and saw growth all four quarters. In comparison, the city saw a 4.6% increase in 2019 from 2018. Taxable sales refer specifically to money spent at Kenai businesses.

Ostrander said strong growth in the face of “troubling times” was likely due to several factors and indicates that Kenai is “the best place” for businesses to locate.

“Clearly our local business owners did an amazing job of not only surviving through this, but really driving their sales in some way,” Ostrander said. “I think there’s also another component here that’s really interesting — and I don’t have any data necessarily to back this up — but I think what we saw in 2020, is the real power of shopping locally. You know … I think that we saw folks show up shopping in our local stores.”

Though revenue from taxable sales was up in 2020, Ostrander said that as they begin the budget process they are taking a conservative approach when looking at revenue projections.

“We can certainly look at what happened last year and make the assumption that next year is going to be even better, but I think because there is so much uncertainty now, as we come out of this pandemic, taking a conservative approach as far as revenue projections is the way that we want to do that.”

Looking ahead, Ostrander said the city is working to market itself as a premier destination for travelers. In addition to launching an “I Love Kenai” website and merchandising campaign, the city has also launched a “The Best Place to Alaska” campaign that highlights the city’s economic and recreational assets.

In addition to short video clips, a series of posters show residents living uniquely Alaska lifestyles. One, for example, shows Kenai City Council member Henry Knackstedt standing next to a plane with the words, “My other car is a plane,” overlayed on top.

The goal of the campaign, Ostrander said, is to show people outside the city and outside Alaska what opportunities they could be taking advantage of if they were in Alaska.

The full address can be viewed on the Kenai Chamber’s Facebook page.

Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.

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