Over the course of two work sessions, the administration and council of the city of Kenai have hammered out a draft budget for fiscal year 2002, which begins July 1.
The operating, or general fund, budget comes in at $8,594,299, an increase of $238,685 over the current year, a 2.78 percent increase.
The total budget for the new fiscal year, which includes the general fund as well as the airport, senior, water and sewer and boating facility funds, will be $13,105,547, up from $12,412,600 this current fiscal year, a 5.29 percent increase.
Since the budget sports an increase of $692,947 in spending, but does not include a mill rate increase, the city may have to dip into its general fund account balance in the amount of $501,904. But that is only the case if each department spends every penny they are allotted, City Manager Rick Ross said.
"We are counting on a 6 percent lapse, in which case we will have a $13,754 surplus," he said. "But if we did spend every penny budgeted, and that's never happened, we would have to pull from the fund balance.
"It's basically a hold the line budget with a few things added back in."
The budget includes one new police officer, which is largely funded through a federal grant, the addition of a 25-hour per week assistant to the Planning and Zoning Department, an upgrade of a part time library assistant to full time, the addition of a 20-hour per week assistant to the city clerk's office and an additional 200-hours each to the Parks and Recreation Commission and the Beautification Committee for part-time help in the summer.
The planning assistant and police officer are positions cut five years ago that are being added back in.
"Police Department patrol time has been way, way down over what it had been, and we want to try to get that back up," Ross said.
Other big expenditures include $60,000 for the purchase of additional road sand, since last winter drew down the city's supplies, and $30,000 in the recreation budget for electricity to operate the proposed refrigeration system at the ice rink.
Though it is not budgeted, the council is considering an additional expenditure from the general fund balance of $1.6 million to install refrigeration equipment at the ice rink and to buy out Phase 1 LLC, a group of private investors which took out a loan to help build the rink a year and a half ago.
If the council makes a final commitment to the buyout and refrigeration, it will make an appropriation to the general fund account this fiscal year, or include it in next year's budget, Ross said.
After such a mild winter, in which Phase 1 lost money due to few ice days, the council wants to buy out the loan early and install refrigeration, which would create stable ice from September through April or May.
But by dipping into the general fund by $1.6 million, the city will lose $90,000 a year in interest earnings.
Other items from the draft FY 2002 budget discussions include:
n The council wants to set aside $10,000 for film maker Randy Chalawsky, a former resident of Kenai, who is planning a documentary video about the Kenai Peninsula. The grant will be reexamined later, prior to committing the funds.
n The council turned down a grant request by the Central Area Rural Transit System for $25,000, something it turned down last year, as well, Finance Director Larry Semmens said.
n It approved an increase of $5,000 to the Kenai Convention and Visitors Bureau for operation of the Kenai Visitors and Cultural Center.
The city's finance department is compiling a final budget, and the administration will present it to the council for final approval at its regular meeting June 6.
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