Kenai got a head start on its upcoming budget by rearranging its funds via an ordinance that moves $124,303 budgeted this year for planned projects back into the city’s general fund, which could be spent in the coming fiscal year.
“The canceling of projects and returning unexpended funds will provide a clearer picture of funding available for city operations and future capital needs,” Kenai Finance Director Terry Eubank wrote in a memo to the city council. In previous interviews, Eubank said he expects city revenue to be $400,000 less than the amount anticipated in the existing fiscal year 2017 budget.
The Kenai City Council unanimously passed the administration-sponsored ordinance at its meeting Wednesday.
Planned projects defunded in the ordinance include $35,000 for the design of a city event park and $20,000 for mechanical improvements at the Kenai Recreation Center.
The decision to fund the event park design wasn’t unanimous when it was given in June 2016. The $35,000 was budgeted at the suggestion of the Kenai Outdoor Opportunity Location subcommittee — chaired by then-council member Brian Gabriel, who is now mayor — which recommended pursuing Kenai’s long-deferred plans to build an outdoor stage at the vacant bluff-top lot near the Kenai Senior Center known as Millenium Square. In the 2016 budget session, then-council member Terry Bookey unsuccessfully moved to delete the $35,000 item, citing budget concerns.
The $20,000 for the Recreation Center supplements a state grant given for the project, of which Eubank’s memo states that $82,481 remains. Eubank cited Kenai Public Works Director Sean Wedemeyer in writing that the total isn’t enough to complete planned heating and hot water upgrades at the facility. The state money remaining for the project will be put toward design and cost estimation work — expected to cost $45,000, according to the memo — while city’s share is withdrawn.
“Once design is at 65 percent and cost estimation completed, the project will be re-evealuated for inclusion and prioritization in the City’s capital improvement plan,” Eubank wrote.
The remaining $117,653 of the money re-budgeted in the ordinance came from projects that were delayed or finished with money left over.
Excess funds from completed projects included $31,626 from the Kenai Municipal Park playground upgrade, $15,000 from a feasibility study for a convention center, $39,332 for the construction of walking trails, $5,889 from construction of two picnic shelters, $201 from Beaver Creek park playground upgrades, $17,334 from the installation of a columbarium in the city cemetery, and $6,869.71 remaining from Kenai’s 2016 update of its comprehensive plan.
The only delayed project that was defunded was the $8,000 design of an upgrade to the fountain in Leif Hansen Memorial Park.
In recent months Kenai officials have begun to anticipate budget difficulty. At a Dec. 13 worksession, then-Kenai City Manager Rick Koch presented the city council with a possible worst-case scenario in which Kenai began its fiscal 2018 budget — to take effect July 1, 2017 — with a $375,000 revenue shortfall created mainly by a drop in sales tax revenue, which fell 6 percent from last year, and ended it with a total $974,540 deficit due to reduced state funding. Cutting the $35,000 event park design was among the 15 cuts Koch recommended to shave $231,268 off the city budget.
Current city manager Paul Ostrander has also spoken about budget concerns. Describing his intentions for the Wednesday money-shuffling ordinance in a talk at the Kenai Chamber of Commerce and Visitors Center, he said he and Eubank would “propose to the council that we take those monies and sweep them back into the general fund, then look at them organizationally — what should we do from a capital project perspective? Should we continue to fund these projects that were priorities five years ago, or should we look at something different?”
Reach Ben Boettger at firstname.lastname@example.org.