Kenai Peninsula Borough mayor David Carey said he had one goal in mind when he began to address the borough's 2012 fiscal budget five months ago.
"I was committed to getting the budget as balanced as possible," he said.
That budget, which was presented to the assembly in early May, calls for $71 million in expenditures -- a $2 million drop from the 2011 budget. However, the mayor's budget calls for pulling more than $1 million from the fund balance.
"We started off that no department could add more than what they spent last year," Carey said. "Last year, there were a number of extraordinary expenditures, some of which were for solid waste, some of which were health care. Every budget had to start without any of those extraordinary expenses."
The budget, which will be up for debate and is set for approval during the assembly's June 7 meeting, also calls for a reduction of three full-time positions from general government services and one from the service areas.
"We basically held the line on everything in general government," Carey said. "We didn't anticipate any special expenditures and we reduced the number of employees, which lowered our overall budget."
Carey originally estimated the borough would need to pull out about $1.7 million from the fund balance for the budget. However, a state allocation of revenue sharing for the borough totaling $715,660 dropped that amount to about $1 million.
Carey also said the Legislature has approved a little less than $9 million for the Homer Solid Waste Transfer Site, but the fate of that funding will ultimately be decided by Gov. Sean Parnell. The remainder of the project's funding, which is slated to cost about $12 million, will come from the land trust fund.
"For many new to the assembly, they had never seen money taken from the land trust fund," Carey said. "The land trust fund is particularly unique in that it comes from everywhere in the borough and it should be spent for a borough-wide service. At least from what I have heard from the assembly is that this is a very appropriate use for the land trust fund monies."
Carey provided the assembly with a list of actions they could take to balance the budget, and even turn about $200,000 in surplus, he said. However, Carey was quick to mention the budget he proposed is "conservative" in several aspects.
"Wherever we budgeted, we took the lower number," he said. "Often you don't know expense, but we took a lower number in terms of expenditure so we have conservative budget and so we should, because bids have been coming in very well on projects, we should actually have more revenue than what the budget would say."
Not included in the budget is funding for several non-departmental agencies, including the Kenai Peninsula Tourism Marketing Council, Kenai Peninsula Economic Development District and the Central Area Rural Transit System.
Assembly member Linda Murphy said she would propose putting funding for those agencies back into the budget because of a "very healthy" fund balance.
"I think that not funding those is not the smart way to handle the budget," she said. "And in the scope of things, we are not talking about a great deal of money."
Murphy said she was encouraged by news of increases in state revenue sharing and possible funding of the Homer transfer station, adding she didn't think the borough is "in as bad of a shape as people like to say that we are."
"I guess I am the eternal optimist -- I just think things are going to work out," she said. "Yes, I would be comfortable taking up to $1 million out of the fund balance. I don't like taking it out to meet operational needs, but if we are looking at things like trying to find some other funding mechanisms for tourism marketing and economic development programs, then I can handle that for this year.
"But, I don't want to see that every year because you can't continue to live off your savings account."
Assembly member Brent Johnson said he was still undecided on his opinion of funding for non-departmental agencies.
"I'm still going to be listening to public comment and hear what the other assembly members have to say before I make up my mind on what I'm going to do," he said.
However, Johnson's view of the budget as a whole is clearer.
"Well, I think the mayor has done a pretty good job of holding the budget down," he said. "Whether I am comfortable with it or not, well we are spending more than we are bringing in even though it is pretty close. I can't say I am real comfortable in a country that's trillions of dollars in debt and I'm just trying to make sure we don't follow suit."
The borough will be forced to either cut more departmental, general government or raise taxes.
"But one of the two has to give because you can't deficit spend," he said.
Brian Smith can be reached at firstname.lastname@example.org.