Kenai Peninsula Borough Mayor Peter Micciche, on May 2nd, presented his proposed budget for Fiscal Year 2024 for the Kenai Peninsula Borough to the Kenai Peninsula Borough Assembly.
Micciche released the budget total for Fiscal Year 2024.
“The mayor proposed total is $175.6 million, which is up 2.55% from last year, but I want to put that in context. The two years previous to that added up to almost 16%, you had an 8% year and you had a 7.5%. year.”
Micciche spotlighted the work of Brandi Harbaugh, Borough Finance Director and the borough department heads on the proposed budget.
“I wanna call out a big thank you to not only Brandy (Harbaugh) and her team, but all the directors. We we had a target for a balanced budget. We were a little short of that target. Brandy sent out an e-mail and the directors responded beyond expectations on getting us to that target in one day. So we are at the target we want to be at be at and remember we’re back on that curve of where we have a balanced budget. We wanna get back to a tie to CPI, the actual cost of doing business in Alaska.”
The proposed budget includes an only a half-position increase in personnel according to Micciche.
“Last year 14.5 FTE 14.5 jobs were added. This year we added one-half job. We’ve reduced one 1/2 time position and we added one full time position which is a mechanic for CES. So no general fund positions were added and there was a lot of demand if Burroughs been adding some positions and there’s need. But what I said is I’m willing to sit down overtime, not in this budget, but we’ll sit down and justify any new positions that you think need to be added. But yes, that 175 million is a 2.55% increase.”
In the budget transmittal letter (page 9-19 of the linked budget document: budget transmittal letter) Mayor Micciche stated, “We’ve attempted to put ourselves into the shoes of the typical
Kenai Peninsula Borough taxpayer while planning for an affordable borough well into the future.”
According to Micciche, the key principles applied to FY2024 budget are:• Returning to a balanced budget philosophy for the first time in 6 years in the boroughwide budget and over 10 years for the general fund.
- Returning to a financially sustainable revenue and spending curve (based on 10-year projections) after 2 years of unsustainable budget increases.
- Delivering a mill rate (property tax) reduction for KPB taxpayers, maintaining a sustainable and strong general fund while providing for a minimum fund balance policy to protect the borough from unexpected expenditures.
- Supporting local education at a level the borough can reasonably afford and sustain and funding capital and operational maintenance to ensure borough assets are well maintained and avoid added cost of deferred maintenance.
From the office of the Mayor…
The Micciche Administration is determined to balance the budget now and into the future so that boroughwide expenditures decrease, or if they do increase, they do so at an amount equal to or less than the Anchorage Consumer Price Index (CPI). Between FY2015 to FY2021 increases to the borough’s budget were well above CPI. In FY2022 and FY2023 the borough expenditures increased by 7.57% and 8% respectively (two-year total of 15.57% total) creating an incline in the forecasted expenditure curve that is not sustainable based on the revenues forecasted for the next ten years. Such unsustainable budgets result in unaffordable and unsustainable tax rates for residents.
The mayor’s proposed budget brings the borough to a sustainable course with only a 2.55% increase which is well below CPI (in spite of a 6% increase in labor cost negotiated in FY23).
The mayor asserted such fiscal discipline must be applied now to maintain a workable and sustainable expenditure trajectory. Mayor Micciche said, “Returning to a sustainable spending curve through this budget reset, while still continuing to deliver quality key services for KPB residents, is not a populist philosophy, but a necessary objective. Unsustainable budgets today, result in unaffordable tax rates in the future for our kids and grandkids. This budget, although leaner than typical, places us back on a healthy, sustainable trend for the future of the Kenai Peninsula Borough. I want to thank our KPB staff, service area boards and personnel and assembly members for their hard work creating an extraordinary budget document and for supporting passage through the process.”