According to its financial auditor, the city of Kenai is in good shape when it comes to the bottom line.
Bill Coghill, an accountant with the firm Mikunda Cottrell and Company, delivered his financial report for fiscal year 2004 last week to the Kenai City Council. Coghill said the city's finances look good, with no debt on the books and a healthy bank account.
In fact, the city increased its general fund balance by $1.1 million over the previous year.
"Revenues came in higher than we expected, particularly sales tax," Coghill said.
Two years ago, the city slashed its budget in an effort to deal with the expected sales tax loss created when Big Kmart closed. The city also raised its property tax rate from 3.5 mills to 5 mills. One mill is equal to $100 in taxes for each $100,000 in assessed value.
When Home Depot moved into the Kmart building, Coghill said the sales tax hit was negated. Combined with the budget cuts and increase in property tax, he said that meant Kenai put itself in a position to come out ahead.
"These statements show a pretty stable position for the city of Kenai," he told the council.
Overall, Coghill said the city is worth $140 million, down 1 million from last year's total.
However, he pointed out that much of the city's net worth is tied up in fixed assets such as roads and equipment and those assets depreciate in value each year. Of that $140 million figure, Coghill said approximately $20 million is available in unrestricted fund balance that can be used by the city.
Because the city spent just $1.4 million on capital projects last year as opposed to the $2.4 million in estimated depreciation the result was a net loss for the city.
"We had a million more in depreciation of fixed assets," he said.
The report on the city's finances includes a section that breaks down just how much money the city collected from taxes, fines and various fees.
Council member Linda Swarner said she was particularly pleased with the section on sales tax, which rose by $730,000 over the previous year.
"I like those plus numbers," she said.
In other action last Wednesday, the council:
Approved the transfer of $3,500 in the general fund to obtain cost estimates for phase one of the city's planned soccer park development. The city's tentative plan is to develop a large parcel of city land that partially sits atop the former borough landfill site as a recreation complex, including soccer fields, baseball diamonds and bicycle and skateboard facilities.
Directed city administrative staff to go forward with the appraisal of eight parcels of city land along the Kenai River. The city currently is negotiating a land trade deal with the Conservation Fund that will enable the city to improve its public boat launch facility by adding a new access road.
Kenai Public Works Director Keith Kornelis explained to the council that the Conservation Fund is willing to accept a trade for $80,000 worth of dry land near the boat launch in exchange for city wetlands valued at the same price.
He said the appraisal of the eight plots is needed to determine exactly how much the city's land is worth in order to go forward with a trade.
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