The Kenai Peninsula Borough Assembly is set to vote Tuesday on a proposed $60.2 million fiscal year 2006 budget, as well as on a resolution setting borough and service area mill rate levies on real and personal property.
Budget Ordinance 2005-19 includes almost $13.8 million for general government operations and $35 million for schools, plus assorted debt service, transfers to special revenue funds and capital projects.
Resolution 2005-043 anticipates increasing the borough mill rate levy a tenth of a mill to 6.6 mills. One mill costs the owner of a $100,000 home $100 a year.
The Nikiski Fire Service Area mill rate would jump from 2.3 mills to 3 mills. The fire service area board has reduced personnel costs and written a service area budget based on a 2.3-mill levy. The anticipated closure of the Agrium plant may affect the overall tax base, but the effect should not be felt immediately, and the board suggested it might be better to let events play out before changing the mill levy.
Also set for an increase is the Nikiski Senior Service Area, which would see a rise from .15 mills to .2 mills.
The Roads Service Area tax levy would fall, however, from 1.4 mills to 1.3 mills. All other levies would remain the same.
In a May 17 memo to the assembly, Mayor Dale Bagley offered his perspective on the proposed budget and the current state of borough coffers, noting that several years ago in response to public pressure, the borough began reducing its fund balance the money it had in the bank available for operating expenses and unexpected needs. But now some of those same people are asking where the money has gone.
"The sky has not fallen," Bagley told the assembly. "We're not in an economic crisis."
What has happened since the fund balance floated around $25 million (it's now closer to $14.5 million), is a serious cut in state revenue sharing, a mismanaged state retirement fund and increases in the cost of insurance and health care. Meanwhile, the reduce fund balance has reached a point where it can no longer be tapped easily to subsidize annual spending.
"This isn't a borough government growing out of control," Bagley said, "this is a government that has had increased expenses imposed upon it and has lost state revenue and general fund revenue."
The proposed budget includes a reduction of about $425,000, representing a 10 percent cut from nonpersonnel costs. The mayor also proposes reducing staff by about seven full time equivalent positions.
Tuesday, the assembly also will address Ordinance 2005-09, a revenue enhancement measure that proposes increasing the borough sales tax rate from 2 to 3 percent, calculating recreational package sales on a per-person, per-day basis and capping the amount of funds held in the land trust fund.
Public hearings will be held on Ordinance 2004-19-52, a measure accepting and appropriating a $26,637 grant from the Alaska Division of Homeland Security and Emergency Management for the Kenai Peninsula Citizens Corps Programs and Ordinance 2004-19-53, accepting and appropriating a grant from the same agency in the amount of $238,568 for emergency preparedness measures.
Ordinance 2005-05, which was adopted May 17, is up for reconsideration. That measure proposes a ballot measure to implement a bed tax on lodging accommodations of up to 4 percent. Assembly member Paul Fischer called for reconsideration.
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