The Kenai Peninsula Borough Assembly will soon get a glimpse of Borough Mayor Mike Navarre’s fiscal year 2014 budget — one that his administration is calling both sustainable, responsible and not much different than this year’s.
“Our goal is to make sure that it is a sustainable budget and we feel like we’ve got it there,” said Paul Ostrander, borough chief of staff. “We want to make sure that the fund balance is within the range where it should be ... so we’ve managed to maintain that fund balance.”
Specific details of the administration’s proposed budget are not released early so that the assembly gets the first glance. In this fiscal year’s budget document, however, the borough forecasts revenues for fiscal year 2014 to increase to $71.7 million and total expenditures to be at $73.3 million.
Borough Finance Director Craig Chapman said the 2014 budget, which if approved will start July 1 of this year, will be presented to the assembly on May 7 with an action date requested for June 4. The assembly will get its first glimpse of the spending plan in a yet-to-be-set committee meeting before the assembly’s regular 6 p.m. meeting.
The borough is only required to host one public hearing on its budget, but Chapman said the body can add additional hearings as needed. In recent years the assembly has had two hearings, sometimes adding a third.
The borough budgeted for $72.9 million in expenditures in this year’s budget. That number was reduced from Navarre’s originally-proposed $73.1 million budget due to a decrease of $500,000 in the amount the borough would have given to the Kenai Peninsula Borough School District.
This year’s budget is up slightly from last year’s forecasted year-end expenditure total of $72.2 million and 2012’s original budget of $71.4 million. Revenues were expected to reach $71.4 million in this year’s budget, an increase from fiscal year 2012’s forecasted $69.9 million.
Chapman said this year’s budget-to-actual figures are in line for the majority of the borough’s funds. The borough will, however, have some spill over of capital project funding, Chapman said, but operational carryover will be limited.
The difference between what the borough budgets and actually spends has been decreasing over time as previous mayors have kept the operational side of the budget tight, Chapman said.
“The budget lapse used to be anywhere between 10 and 12 percent,” Chapman said. “And so what the mayors started doing — even when Mr. Navarre first was mayor — they started reducing the budget or held the budget static because there is no reason to budget funds if they aren’t being spent.”
Although Chapman said he couldn’t give specifics, he said the borough is seeing reduced funding at the state and federal levels. However, borough oil and gas taxable assessed values — which are assessed by the state and subject to appeal — are up 40 percent in the last two years.
Also a consideration in this year’s budget was the administration’s negotiations with the Kenai Borough Employees’ Association, Ostrander said. Despite being a large part of the budget process that began in early January, the union’s three-year contract didn’t throw a wrench in the administration’s calculation of the budget, he said.
“You always have to consider what your personnel costs are going to be — it is a significant part of our budget,” he said. “... Once negotiations were completed at least preliminarily — we’re still waiting on the union vote — once those are completed we plug those into the budget and modify things accordingly.”
Ostrander said he and the rest of Navarre’s administration started to meet with the various borough departments in late February. He said they asked the department heads to think out of the box and find ways to work more efficiently.
“We saw a number of departments come back to us with innovative ideas on ways that they could change the way they conduct their day-to-day business,” he said. “That was to gain efficiencies and to do things less expensively than what we have in the past.
“The question we really wanted to ask is just because we have been doing it this way forever doesn’t necessarily mean it is the right way, or the way we should continue to do our business.”
Brian Smith can be reached at firstname.lastname@example.org.