The annual dispersion of funds from the state to small communities statewide may grind to a halt in coming years.

The state’s Community Revenue Sharing Program draws money from a central fund and disperses it to unincorporated communities throughout the state.

The state legislature sets aside funds each year to give to communities to help with public projects and support services.

The Kenai Peninsula Borough received $521,000 to distribute to 27 unincorporated communities this year — $18,922 each. Those communities then use the money at their discretion for public projects and services, from senior citizen centers to emergency services to paying for the heat and lights in public buildings.

However, the fund is slowly shrinking. Last year, the borough received $534,708 total, 2.5 percent more than this year.

The Alaska State Legislature administers the fund and appropriates money for it each year, but did not appropriate any additional funding for it for FY16, due to lower oil prices, according to the Alaska Department of Commerce, Community and Economic Development. The state cannot distribute any money when the fund falls below a balance of $60 million, which may begin to affect communities in FY16.

$57 million was distributed from the fund across the state this year. Next year, if the amount of money in the fund does not increase, that payout will decrease to $38.2 million.

“They have created a program that means a lot to a lot of communities, both in the borough and throughout the state,” said Kenai Peninsula Borough Mike Navarre. “I expect that they’re going to continue to reduce it, given the state’s fiscal situation, but I don’t think they’ll eliminate it all at once.”

Brenda Ahlberg, Kenai Peninsula Borough Community & Fiscal Projects Manager, said the drop in funding will not affect the communities this year and cannot predict what may happen in the future.

Most of the communities use the annual funds for nonessential projects, so they could survive without them, but others may run into trouble.

The communities on the Kenai Peninsula that receive funding include Anchor Point, Clam Gulch, Cohoe, Hope, Ninilchik, Sterling and 21 other communities.

While some use the funds for nonessential projects, such as Kasilof’s renovations to its Regional Historical Associations, communities such as Sterling and Ninilchik use the annual cash injection to fund their senior centers. Ahlberg said using the funds for projects rather than maintenance, such as utilities, is wiser, especially with the state’s uncertain financial standing.

Small Alaskan communities are impacted heavily by high energy prices and fuel costs. The Alaska State Legislature has historically appropriated additional funds to compensate for this —in FY12, the fund received an additional $20 million, and another $25 million in FY13 to offset higher energy prices. However, without any additional funding, the Department of Commerce, Community and Economic Development currently predicts that the final payout from the program will be in FY18.

“I’ve always encouraged (the communities) to think that these funds may not always be in place,” Ahlberg said. “On the flip side, we do have some communities that use it for utilities in their public buildings, so I would say those are the communities that would be the most impacted.”

Reach Elizabeth Earl at elizabeth.earl@peninsulaclarion.com