The City of Kenai on Wednesday kicked off its budget process for the upcoming fiscal year with a work session attended by council members and city staff to discuss goals.
In all, Kenai Finance Director David Swarner and City Manager Terry Eubank presented council members with a list of eight budget goals. Council members will ultimately consider a resolution formally adopting the list of goals during a future meeting.
The top goal on the list proposed Wednesday is to create a budget that maintains the City of Kenai’s current mill and sales tax rates, while still complying with the city’s fund balance policy.
The city levies a 3% sales tax and a mill rate of 4.35 mills. Mill rates are used to figure out how much someone will pay in property taxes during a certain fiscal year. To calculate how much property tax they expect to pay, an individual must divide the mill rate by 1,000 and then multiply that by their property’s taxable value.
“It’s really about living within our means and staying within our guidelines of not spending more than what we have coming in the door,” Swarner said of the first goal.
Eubank, who also served as Kenai’s finance director for 14 years, said the city is starting to see a “slowdown” in sales tax revenue coming into the city, which he attributed to inflation. Even if the level of inflation becomes less severe, he said, any level of positive inflation will cause prices to increase.
“I think what we’re experiencing is, at the tail end of these inflationary pressures, people are starting to have to make decisions on what to buy,” he said.
Council member James Baisden floated the idea of decreasing the city’s mill rate as a way to provide relief to city residents. By not decreasing the rate, Kenai residents are paying more money in taxes year over year if the value of their property goes up. He pointed to the Kenai Peninsula Borough, which has decreased its mill rate each year for the last two years.
The second and third goals on the list presented to council members Wednesday have to do with ensuring that city employees are appropriately compensated and are offered insurance benefits that are both sustainable and quality.
Other goals include seeking opportunities for more department efficiencies, keeping up with city maintenance such that assets do not depreciate and adjusting city rates and fees such that they become commensurate with inflation.
Work on the City of Kenai’s budget will continue over the next several months.
More information about the City of Kenai’s budget process can be found on the city’s website at kenai.city.
Reach reporter Ashlyn O’Hara at ashlyn.ohara@peninsulaclarion.com.
