Kenai Peninsula Borough Mayor Mike Navarre released the borough's $73.1 million draft fiscal year 2013 budget at the assembly's Tuesday meeting.
Navarre said the budget mitigates a rise in health care, personnel, salary and other costs and leaves the borough's fund balance at a healthy level despite increases in both expenditures and revenues.
"For this year we really went with a status quo budget," Navarre said after the assembly's meeting. "Over the course of the next year between now and when we start the budget cycle again, I will get a much better feel and opportunity to do more in-depth evaluations of the departments."
The budget calls for $73.1 million in total expenditures, which is up slightly from last year's forecasted year-end total of $72 million and 2012's original budget of $71.4 million.
Revenues totaled $71.3 million in the proposed budget, an increase from fiscal year 2012's forecasted $69.9 million and 2012's original budget of $68.7 million. Revenues are broken down to $31.6 million in property tax, $30 million in sales tax, $5.7 million in state revenue, $2.29 million in federal revenue and $1.5 million from other sources.
Although there was no increase in the general fund mill rate, there was an overall 3.2 percent increase in the borough's assessed values, much of which is attributed to oil and gas properties.
Not considering increases in oil and gas, the increase is 0.3 percent to real and personal property values. Total taxable values increased to $6.67 billion from 2012's $6.46 billion. That increase translates to a total tax revenue increase from last year's $30.7 million to $31.6 million.
The budget as proposed will run a deficit of $1.7 million, but due to a lapse from last year's budget, only $1 million will be pulled from the general fund, which is the borough's savings account.
Navarre's budget would leave the general fund at $20 million. The original 2012 budget proposed by former mayor Dave Carey would have reduced the general fund to $16.4 million, but increases in revenue not budgeted for and lapses from previous fiscal years help that number to be forecasted at $21.1 million by the end of this fiscal year. In 2010, the general fund was at $23 million.
"One of my goals was to reduce the draw down in fund balance because ... it is down in the range that was set some years ago and it has been declining," he said.
However, Navarre said while the next few years would likely see continued reduction in fund balance, he hopes to stabilize that trend and be tucking money back into the account by 2016 in hopes of achieving a balanced budget on an ongoing basis.
Navarre said several of the budget's main increases were from rising health care costs, increases in school funding and salary and benefit increases.
Salary will increase a total of 4.6 percent -- 1 percent from a negotiated union raise and 3.6 percent for cost of living based on the Anchorage consumer price index.
Health care costs have increased from $10,763 per employee per year in 2005, to $19,632 per employee per year in 2013.
The borough is looking to add two additional positions, which would increase the total in general government from 109.85 positions to 111.85 positions. Navarre said one of those positions is for a capital projects manager.
"We have so many projects that are ongoing now that are spread out all over the borough and we've also gotten additional funds in this capital budget from the Legislature that will have to be managed also," he said. "It was definitely a necessary increase."
The other position is for an administrative assistant in the mayor's office. The position would help with liaison work between the service areas and the borough, do research, gather data and do other outreach, which would better allow Navarre to manage the borough, he said.
"I'm someone that likes to deal with a lot of information and research and data in making decisions and traveling around the borough and going to different meetings and attending different functions does not leave me a lot of time to do that," he said.
Navarre said he was comfortable with borough staffing levels considering the total now is less or the as same as previous years.
"We're doing a bigger job with the same numbers of folks," he said.
The budget allocates $47.1 million for the school district, which is an increase of $506,340 from last year. Of that school funding, $43.5 million will go to operations, $2.5 million will go to debt service and $1 million for capital projects.
Proposed non-departmental funding is $1.9 million, including:
* Kenai Peninsula College: $667,189, an increase of $9,398;
* Kenai Peninsula Tourism Marketing Council: $240,000, a decrease of $60,000;
* Senior citizens: $661,950, an increase of $133,069;
* Kenai Peninsula Economic Development District: $90,000, increase of $50,000;
* Central Area Rural Transit System: $25,000, same as last year;
* Lobbyist funding: $25,000, a decrease of $30,000.
Navarre said he took a historical look at non-departmental funding to come up with this year's list.
"EDD was funded a lot more in the past, but KPTMC has sort of grown over the years and a lot of it was originally project funds that then just were added to their base," he said. "I recognize the importance of tourism marketing, but it is something the assembly addressed at their meeting last year."
Navarre said he asked KPTMC for a list of what items would be cut from the group's budget if the borough were to cut $60,000 as the mayor proposed.
"I felt I would leave that up to the assembly if they wanted to specifically target areas that they wanted to add back in as impacts that were too substantial to allow for," he said. "I expect the assembly will give that some consideration."
Other budget highlights include:
* $8 million for solid waste;
* An increase in projected sales tax revenue to $30 million from last year's $29.1 million;
* A decrease of $926,406 from federal PILT (payment in lieu of taxes) and forestry receipts;
* An increase in state funding of $1.1 million;
* State revenue sharing totaling $3 million.
Navarre said he was looking forward to examining the budget more closely in the following year with the help of his department heads. This year's budget process started quickly after he was elected and it "sneaks up on you pretty quickly," he said.
"You are dealing with the day-to-day administration and the Legislature is in session and you've got to monitor things going on there," he said. "So the long and short of it is that some of the evaluation that I had hoped to do, quite frankly, I didn't get to do as much as I would have liked to from time constraints."
The borough assembly will host public hearings on the budget on May 15 and June 5. Assembly meetings start at 7 p.m. at the George A. Navarre Borough Administration Building at 144 *. Binkley Street in Soldotna.
Brian Smith can be reached at firstname.lastname@example.org.