Kenai Peninsula Borough Mayor Dave Carey is hoping for a big return on his trip to Juneau this week to lobby the state legislature for money for borough projects -- more than $12 million to be exact.
While the borough is in decent shape financially, according to Carey, the one-time cost of building a new Homer solid waste transfer site is looming over the borough's upcoming fiscal year 2012 budget cycle.
"The need for the additional $9-$12 million dollars in one fiscal year's budget has placed an almost impossible burden on preparing the proposed 2012 Borough Budget," Carey wrote in a statement released Friday. "We are looking for assistance from the State and Federal government and from other possible sources, including the rescinding of the Non-Prepared Food Sales Tax Holiday."
Carey said the borough has applied for state grants on solid waste to help foot some of the bill but it doesn't qualify for them because all of the solid waste sites are currently in compliance.
"If we were in violation of the law we would score much higher for state solid waste grants to help us," he said. "There's just an irony because we've appropriately done what we're supposed to."
The borough's comprehensive plan in 1989 scheduled for smaller solid waste sites in the borough to close out and begin transferring all waste to one site on the central Peninsula.
"The last site to be closed is the Homer one," Carey said. "This is the year to close out and to make a transfer site in Homer."
But there are two parts to the closure of the Homer landfill, he said.
To close it out the borough has to cover it and monitor gases and water surrounding it for the next 20 years. That's going to cost $3.8 million.
"We have the money for that," he said, adding that the borough set aside $600,000 a year for three years in anticipation for the Homer closure.
But what the borough doesn't have is the $9 to $12 million to build the new transfer site.
"You don't charge people last year for services they're getting next year and next year," Carey said.
For 2012, Carey is proposing a "status quo" budget to last year's $73 million.
"All inflation increases for utilities, fuel, contracted services, supplies, equipment and other services must be absorbed into the 2012 Budget," Carey wrote in a statement released Friday. "For most Borough Departments this represents a 7 percent to 12 percent decrease in actual dollars available as compared to 2011."
Carey said he wants to keep the mill rate at 4.5 -- meaning $4.50 of tax on every $1,000 of assessed property value -- for 2012.
The mill rate was set at 5.5 in 2008 but was lowered to 4.5 in 2009 and has remained there.
"There is no desire on my part to increase the mill rate," he said.
For the past few years the borough's total tax revenues from property and sales tax has remained the same, hovering around some $58 million, and that's something Carey is relying on for the 2012 budget.
"Relatively speaking sales and property tax will be approximately what we have now," he said.
By law, all sales tax revenue goes to fund the Kenai Peninsula Borough School District, Carey said.
In order to free up some money in the general fund, Carey said he is asking the assembly to consider repealing the non-prepared food tax's nine-month exemption.
This way that extra nine months of sales tax, which equals roughly $2.8 million to $3 million, can go to fund the school district.
Last budget cycle the Kenai Peninsula Borough Assembly used half of all property tax revenue to fund the schools, as well as dipping into the fund balance.
"By having an additional $2.8 million from sales tax it will free up $2.8 million in property tax," Carey said, explaining his reasoning behind repealing the non-prepared food tax exemption. That's "$2.8 million in property tax which then I can use on the Homer Transfer Site."
The amount the borough spends on education will be the same but it won't have to use the fund balance to finance the district at the $42 million level, he said.
"If I cannot get the assembly to rescind the non-prepared food tax I am going to reduce what I propose for schools by $2.8 million that the non-prepared food tax (exemption) is costing us," Carey said.
On top of that, he's also proposing some other cuts for the 2012 budget.
Carey asked every borough department to present to him two budgets -- one being a "status quo" document, flush to last year and absorbing inflation, and the other representing a 3-percent cut.
This inevitably means some borough positions will be eliminated.
"Government has a spending problem and obviously government has to match it," Carey said. "We are going to have a smaller government and we absolutely need to meet this one time need."
He's also proposing reduced hours of service at the Gilman River Center on Funny River Road, restricting hours at the borough building and annexes and restricting hours of operation at the landfill.
Carey also would like to suspend funding for non-departmentals including CARTS, Kenai Peninsula Tourism and Marketing Council and Kenai Peninsula College, which represent some $1.2 million in borough funds.
"I am going to propose to the assembly that we not fund those non-departmentals for one year," he said.
He's also asking that the borough remove authorized exemptions.
There are 10 optional exemption categories including disabled veterans, river restoration, habitat protection and economic development. There are also personal property tax exemptions and some for small businesses.
"I want every single one to be on the table because I think that's what's fair," he said.
Carey even is considering charging fees for 911 dispatch and for the use of the Central Peninsula landfill to try and cut back borough spending.
Increasing the mill rate is Carey's last resort.
"If everything fails, if the assembly says no, we won't take the non-prepared food tax off, if everything we're discussing they say no to, then and only then my only option would be to raise the mill rate," he said.
The question still remains if the borough will put before voters this October a bond issue to help pay for the Homer transfer site.
Budget work sessions should start in about a month.
Brielle Schaeffer can be reached at firstname.lastname@example.org.
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