The Kenai City Council adopted the annual budget, salary schedule and employee classification plan for the FY2024 and committed $5,761,661 of general fund for future capital improvements in recognition of deferred and ongoing maintenance needs of City facilities and in support of the City’s Fiscal Year 2024 – 2028 Capital Improvement Plan.
The committed fund balance represents resources whose use is constrained by Council self- imposed limitations at its highest level of decision making, an Ordinance, and that remain binding unless removed in the same manner.
The City Council held the following work sessions relating to the budget:
- November 16, 2022 to discuss the Fiscal year 2024 – 2028 Capital Plan. The Capital Plan was approved by Resolution 2023-05 on February 1, 2023.
- December 21, 2022 to develop the FY 2024 Budget Goals. The Council established the FY 2024 Budget Goals with the approval of Resolution 2023-02 January 4, 2023.
- April 29, 2023 for the Administration to present the draft FY 2024 Annual Budget including the Salary Schedule and Employee Classification Plan. The draft budget document is available for public review on the City’s website on the Finance Department page.
Larry Semmens, the Interim Finance Director wrote in the memorandum;
“Since the last budget work session some changes were made to the budget related to a reduction of $80,000 in General Fund Non-Departmental transfer to capital projects due to deferring the Clerk Department Records Vault project; salary adjustments for the City Clerk and Attorney positions; and a $2,500 increase in the Water Department to correct the amount needed to purchase machinery and equipment. Since the General Fund Budget decreased from the prior presentation, the amount available for future capital improvements increased by $69,210.”
Council member Henry Knacksteadt had a few amendments to the ordinance that were all approved.
City Manager Terry Eubank gave a quick overview of those amendments for the public’s sake;
“Regarding the First Amendment dealing with the reclassification of a position of the airport operations supervisor position at the airport, we’ve experienced some excessive turnover in the airport operations department in the last year. Those positions have proven difficult to fill and maintain fill. As a precautionary measure, I did ask our HR director to take a look at the airport operations supervisor position and compare its duties and responsibilities to other positions in the city. And as a result of that, it was recommended that that position be reclassed from a range 20 to a range 21. And that was the First Amendment, the Second Amendment. As a result of we have actually received our insurance renewal quotations. The amounts included in the draft budget or the proposed budget here were were estimates based upon information we were hearing from our insurance provider as well as our broker. And obviously as you can see, we missed the mark a little bit. Our providers are no longer offering what they used to offer, which was a three-year discount.”
There were a few council members who had concerns for the future. Vice President James Baisden was the first to address these issues;
“Yes, on the budget, just a comment, I think we’re fortunate that of course our city manager being previous financial director knows the numbers as well as anybody and having Larry Semmens here also we’ve got probably two of the most experienced people working on our budget. So that that works to our advantage. At the last meeting I briefly just mentioned and I, I think the city manager may be able to comment on this. I guess what we’re doing here I think is fine I think the budget works, but overtime I think that the compounding effect everything is taking place here it doesn’t add up with the revenues that we’re going to be probably bringing in the near future. So, that worries me and I just think something of this group here that we as we deal with that I think it will get more difficult in the years to come. We did receive federal money through the pandemic and other things that helped us in this situation and I think we’re fortunate just like other municipalities.”
Mayor Brian Gabriel agreed with Baisden’s point of view and echoed the compliments given to the finance department by Baisden.
“I think we’re fortunate to be able to you know utilize some of that money to and part of these budget increases obviously are inflationary costs because of staffing to attract qualified folks to apply at the city. We’ve got inflationary costs that are impacting thr Kenai just like every resident within the city and statewide and nationally for that matter. And but we’re still able to shoehorn some money towards some capital, much needed capital projects. So, I agree with you that I think the City administration and finance department did a great job of trying to accommodate all that. They fell within the resolution that they proposed for us that we adopted back I think in January with the goals for this budget. So fortunately, we’ve been able to see a, you know, increased revenue through sales tax, which has helped out also.”
Council member Alex Douthit added on to the voices of concern and brought the issue of inflation and called attention to changes that may need to be made.
“And I just wanna kind of read a little bit of the concerns that I’m staying with inflation and cost of staff increases for being able to attract new staff that we definitely are going to start looking at. If we don’t see some staggering number increases here soon on revenues, we might have to start looking to if these numbers keep going on compounding like they are. In the next couple of years, I can definitely see us trying to have to look for other revenue sources, especially with the compounding effect, not only if the inflation, but with these larger bids that are coming in for capital projects or above and beyond what we thought we could see the writing on the wall that we need to start looking into possible revenue increases if we don’t start seeing something change more drastically what we’re seeing now.”
The ordinance was enacted as amended, and concerns for the future will be addressed if issues arise.
